LNG

Dominion Energy, the US company that started the Cove Point LNG export plant in Maryland and now focused on renewables, has closed the sale for around US$6.6 billion of the Ohio natural gas utility, East Ohio Gas Co, to Canadian pipelines and energy company Enbridge Inc.

The American Gas Association (AGA), the industry group representing over 200 utility companies delivering natural gas throughout the US, said the Administration of President Joe Biden has moved to block pending approvals of liquid natural gas export permits to please climate activists in an election year.

“While hailed as a victory by climate advocacy groups, the decision could ultimately increase total global emissions, with US LNG having 50 percent lower supply chain emissions than Russian natural gas,” said the AGA.

“Natural gas has been the single biggest factor in reducing US greenhouse-gas emissions and could have the same effect around the world,” explained the AGA.

AGA President and Chief Executive Karen Harbert said the future shortages of American natural gas on global markets would result in higher energy costs for US allies, cause energy shortages in the developing world and would please other gas producers like Russia and Iran.

Economic growth

“The United States should not undercut our allies or fund our enemies with a policy that will increase global emissions and hamstring an engine of economic growth,” stated Harbert.

“Freezing approvals for LNG export terminals should be reconsidered immediately,” she said.

The AGA lobbies on behalf of the local energy utilities that deliver natural gas throughout the US to more than 77 million residential, commercial and industrial natural gas customers of which 73M customers receive their gas from AGA members.

“While some advocates against increasing LNG exports have suggested that sending more natural gas overseas could increase domestic prices for US consumers, the government’s own data disproves that theory,” said the AGA.

Analysis from the US Energy Information Administration have suggested that boosting LNG exports would have a minimal impact on US prices thanks to the significant quantities of natural gas available in the US.

Projects likely affected

Four key LNG export plants are expecting to be affected by the US Administration’s blocking policy.

The projects at risk of delay include at least one in Texas and three in Louisiana. They are Sempra Infrastructure’s Port Arthur venture as well as Commonwealth LNG, the Energy Transfer project at Lake Charles and Venture Global’s proposed Calcasieu Pass II (CP2) project.

The last review of US LNG export projects was in 2018, though Biden is seen having moved to act in an election year to boost his environmentalist credentials.

Biden warned that climate change was “the existential threat of our time” in his revised policy on LNG.

“During this period, we will take a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment,” the President declared.

LNG stabiliser

The AGA concluded that freezing American LNG export permits would have a slowing effect on US economic growth, taking away significant potential job growth while handing an economic victory to America’s adversaries overseas.

“Exports of LNG act as a stabilizing pull factor, with demand that encourages producers to avoid sharply reducing production when faced with low domestic prices,” the AGA noted.

The AGA was founded in 1918 and more than 100 years later in the 2020s natural gas met more than 30 percent of energy needs in the US.

The American Gas Association has elected Kimberly S. Greene of Atlanta, Georgia-based Southern Company Gas to Chair the AGA Board for 2022 at a challenging time for the US natural gas industry and a landmark time for the growing LNG export sector.