A Break in the LNG Exports Logjam
Posted February 22, 2019
A big win this week for U.S. liquid natural gas exports: The Federal Energy Regulatory Commission’s approval of the Calcasieu Pass liquid natural gas (LNG) export facility in Louisiana – marking an end to a two-year logjam on LNG export approvals while boosting American global energy leadership and signaling opportunity to European allies who’ve been beholden to Russia for natural gas.
The $4.5 billion Calcasieu Pass project near Cameron Parish will be able to export 10 million metric tons per annum of LNG per year. Venture Global first applied for FERC approval for the facility in 2015. About a dozen other proposed facilities await FERC approval. Now, perhaps, the end’s in sight. Todd Snitchler, API vice president of market development:
“We’re thrilled that FERC has found a bipartisan path to approval of Venture Global’s Calcasieu Pass LNG export project … which also creates a path forward for all other LNG export facilities that are currently in front of the commission.”
Snitchler said the action will help ensure that the “success of the U.S. energy revolution is shared both here and abroad.” Snitchler:
“This decision will help American energy companies share the benefits of U.S. energy and economic leadership around the world, exporting our clean, abundant, and affordable natural gas to countries from South Korea to Spain, while also creating good-paying jobs, increasing investments, and stimulating local economies in Louisiana, and we’re extremely encouraged by this announcement.”
FERC Chairman Neil Chatterjee said the process breakthrough indicated by the Calcasieu Pass approval bodes well for future decision timelines:
“Since I joined the Commission, it’s been a priority of mine to expedite and improve our LNG terminal application review process. … I really appreciate the efforts of my colleagues to work together to come to an agreement on this facility. This is significant, as I anticipate we’ll be able to use the framework developed in this order to evaluate the other LNG certificates that the Commission is considering. … This is a matter of truly strategic significance, and we as an agency are dedicated to doing our part in this historic American moment …”
U.S. natural gas abundance is integral to the domestic energy revolution that has lifted the economy, created jobs and significantly advanced climate goals.
With FERC’s approval as well as 20-year offtake agreements in place, the path should be clear for Venture Global to move ahead with an investment decision that infuses billions of dollars into the Louisiana and U.S. economies.
At the same time, increased use of clean natural gas is the biggest reason U.S. energy-related carbon dioxide emissions are at their lowest level in a generation. U.S. LNG exports help stimulate domestic production by creating market opportunities for natural gas in addition to meeting needs here at home.
Let’s state the obvious: FERC approval of LNG export facilities is integral to exports. The U.S. has two export facilities in operation at Sabine Pass, Louisiana, and Cove Point, Maryland, with more scheduled to come online this year and into 2021. Others are waiting for FERC consideration. But, as Chatterjee said, the Calcasieu Pass approval means there’s now a reasonable framework for progress on those. Chatterjee to Bloomberg:
“The agreement that we struck today to break the dam open on this tricky issue gives me reason for optimism that we’ll be able to move expeditiously on these other applications.”
As for the global picture, Calcasieu Pass and the other U.S. LNG facilities that one day may export natural gas could be the realization of projections that the United States will become one of the world’s leading exporting nations, if not the leader in the next few years. That’s good news for U.S. allies. Bloomberg reports:
“The impact of tonight’s decision is obviously much larger’’ than just this one approval, [U.S. Deputy Energy Secretary Dan] Brouillette said in a phone interview Thursday. “We feel somewhat strongly that energy security equates to national security,’’ particularly for European countries now reliant on Russia. “Tonight’s decision by the FERC allows us to develop the infrastructure’’ that is necessary “to improve their energy diversity,’’ he said.
As we say, a big win for U.S. LNG exports, the U.S. and America’s friends overseas.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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