Golden Pass Approval Advances U.S. LNG Exports

Mark Green
Posted April 26, 2017

Another U.S. facility for exporting liquefied natural gas (LNG) has gained government approval, and that’s good news for U.S. trade and allies overseas.

The Trump Administration issued its first LNG export approval, with the Energy Department authorizing the Golden Pass project in Texas to export up to 2.21 billion cubic feet per day to non-Free Trade Agreement countries. It’s a big step forward for the joint venture between ExxonMobil, ConocoPhillips and Qatar Petroleum, which filed its original application with DOE in August 2012 and expects the project to support 45,000 jobs over five years and 3,800 permanent jobs over the next 25 years of operation.

Marty Durbin, API executive vice president and chief strategy officer:

“The United States leads the world in production and refining of oil and natural gas, and that competitive advantage presents a valuable opportunity to grow our economy through energy exports. Expanding natural gas exports will help create jobs here at home and provide energy security to U.S. allies seeking a reliable alternative to energy supply from nations that use energy resources as a political weapon.”

More good news: Energy Secretary Rick Perry says more approvals will be forthcoming, telling a Bloomberg conference this week:

“We will continue to expand efforts so that there may be additional LNG announcements coming in the future. [LNG] advances our national security interests. It enhances our allies’ access to diverse sources of energy.”

As we’ve discussed before, trading U.S. products to willing buyers around the globe broadly benefits our economy, and this is being illustrated as exports of U.S. LNG rise sharply:

Beyond bringing overseas wealth into the U.S., LNG exports support domestic jobs and production, which can amply supply domestic and global markets. Erica Bowman, API chief economist:

“Today, our nation has the opportunity to supply the world with affordable energy as well as energy-intensive manufactured goods. Our nation has entered a new era where we are no longer bound by constraints on supply, but rather bound by constraints on demand. We need more free trade agreements so that we can compete on a level-playing field in more markets across the globe in order to more fully realize our nation’s energy production potential.”

LNG exports also generate benefits – environmental, with increased use of natural gas helping other nations lower energy-related carbon dioxide emissions as has occurred in the U.S., and security, by offering allies abroad supply options. API President and CEO Jack Gerard, in a March 14 letter to Perry:

“From a national security perspective, accelerating exports of U.S. LNG will help strengthen our strategic alliances abroad. For example, the 2016 NATO Warsaw Summit Declaration specifically states that access to stable and diverse energy suppliers is of critical importance to the alliance. Exporting U.S. LNG will introduce an alternative and reliable source of energy to the global marketplace, providing international consumers with greater choice and helping to curb the use of energy as a political weapon.”

This is a promising start for the new administration on energy exports. Perhaps, as Perry suggests above, the first step toward moving forward on some two dozen applications still pending at DOE. Meanwhile, the administration should move as quickly as possible to fill vacancies at the Federal Energy Regulatory Commission, which has a role to play in the federal approvals process but currently lacks a quorum to take new action.

LNG exports and the benefits they generate illustrate the way America’s energy renaissance is making our country more energy self-sufficient, growing our economy and strengthening our security, here at home and around the world.