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US Approves New LNG Terminal, Keeps the Shale Boom Going


The Obama administration approved plans yesterday for a third American liquefied natural gas (LNG) export facility on Lake Charles, Louisiana. This welcome step comes after a lot of idling in the government review process for LNG export terminals, expensive investments that will make it easier for American energy companies to sell shale gas abroad.

A study commissioned by the White House found that permitting facilities like the one in Lake Charles and exporting America’s shale gas glut will have a net positive effect on the US economy. Beyond the economic benefits, US gas exports will be a boon to our allies abroad in Asia and Europe by contributing to global stability of natural gas prices. Japan, in particular, will be hungry for American gas as it struggles to match energy supply with demand following the post-Fukushima shutdown of its nuclear reactors.

At full capacity, the three permitted LNG terminals will be capable of handling roughly 8 percent of America’s daily natural gas production. That’s a good start, but there’s both room for improvement and reasons for hope, as Reuters reports:

“I think over the next several months we will see the administration move forward with further approvals, particularly now that there is a new energy secretary in place, and the pace at which this happens could also pick up,” said Jason Bordoff, director of the Center on Global Energy Policy at Columbia University and former adviser to President Barack Obama.

America’s energy-intensive industries won’t be happy to see some of the dirt-cheap shale gas leaving the country, as this will boost energy prices. But a higher price will also give drillers more incentive to open up new plays, further strengthening America’s position as the global leader in shale gas development.

[LNG carrier image courtesy of Lightgraphs]

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