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Gassing Up
It's Been a "Good Week" for US LNG

That’s how Alaskan Senator Lisa Murkowski summed up the last few days, in which the federal government approved two new liquified natural gas (LNG) export facilities. Yesterday, the Energy Department gave the green light to an LNG export project based in Astoria, Oregon, which hopes to come online sometime in 2017. That facility still needs approval from the Federal Energy Regulatory Commission (FERC) before it can start sending American gas abroad, but a different project on the other side of the country just received that very FERC approval on Wednesday. The proposed project in Freeport, Texas, is only the third such facility to get the final regulatory go-ahead. Reuters reports:

On Wednesday, the FERC approved construction of the Freeport LNG Development LP’s LNG project in Texas, the third project gaining full U.S. approval to ship the fuel to countries with which Washington does not have a free trade agreement.

The first of those, Cheniere’s Sabine Pass plant in Louisiana, is expected to begin shipping LNG next year.

America is enjoying a natural gas glut, courtesy of shale, that the rest of the world is eager both to imitate and get a piece of. Our allies in Asia will be especially heartened by the Oregon approval, as that region of the world pays as much as three times America’s benchmark price for its natural gas. Ten years ago, the U.S. was working on building out LNG import terminals to regassify liquid gas imported from foreign shores. The shale revolution has completely remade the American energy landscape, and these new LNG export facilities reflect that.

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  • FriendlyGoat

    There are some positive aspects to exporting LNG. One of the aspects which may not be positive is the upward pressure it may exert on prices paid by American consumers and businesses for natural gas energy here.

    • Thirdsyphon

      Just so. Once the export infrastructure is in place, America’s price for LNG will sharply rise until it meets the global price for LNG, and our short-lived national holiday from rising energy costs will come to an end. The Administration is well aware of this, which is why it’s been dragging its feet on the approval process for these facilities.

      • FriendlyGoat

        The thing is, consumers love “gluts” of supply. Producers don’t. Why are we so willing to be ruled by the producers? Right-wing politics?

        One would think the community of BUSINESSES would be saying, “hold on, not so fast”—–so that one side of the right wing would be forced to listen to the other side of the right wing.

        • Boritz

          “…so that one side of the right wing would “be forced to listen to the other side of the right wing.”

          Here is how that conversation went.

          Capitalist1: Stop treating your profits like they are more important than my profits.
          Capitalist2: …………[breaking into smile] You had me going there!
          Capitalist1 and Capitalist2: HA Ha HA Ha HA Ha HA Ha HA Ha HA Ha!

          • FriendlyGoat

            Laugh if you want. You cannot revitalize manufacturing in America without relatively inexpensive gas.

        • Thirdsyphon

          I’d be willing to bet that there’s a lot of quiet support among traditionally Republican business groups that are benefiting from cheap energy, like the National Association of Manufacturers. You never read about it because their “support” is taking the form of not lobbying the government to complete LNG export projects. The business lobby in general has been pretty silent on this issue, but few people notice the dogs not barking, which is what they’re counting on to enable them to thread the political needle on this.

  • Duperray

    Finally, a good decision. I think that many in present administration were upset..! Don’t worry F.Goat, shall no LNG export be approved, US producers would reduce production, as they already did in some areas, otherwise their activity is no longer economically viable.

    • FriendlyGoat

      Define “economically viable”. Completely unprofitable? Or just not as much profit as producers would prefer.

      • Duperray

        “Economically viable” means that producer investments, operating costs, salaries and taxes be paid by revenues with 3-5% profit, otherwise it is either a loss or excessive profit: The latter automatically attracts competitors, new investment and price adjustment. True in theory but only 99% true in reality. Notable exception are Intel or Microsoft.

        • FriendlyGoat

          Perhaps we need to tie permission to export LNG to price levels for consumers—–including business consumers—in the USA.

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