An OK for LNG
The Texas Gulf Coast is a hotbed of activity as global demand grows
The Golden Pass terminal is cleared to export liquefied natural gas.
The region’s burgeoning energy export business has passed another milestone.
The Golden Pass LNG terminal on the Texas Gulf Coast was cleared by the Department of Energy last week to begin exporting up to 2.21 billion cubic feet of liquefied natural gas per day.
Located outside Sabine Pass, the Golden Pass terminal was built to import LNG from abroad in 2009. But following the boom in domestic gas production through hydraulic fracturing and horizontal drilling, Golden Pass, a joint venture between Qatar Petroleum, Exxon Mobil Corp. and ConocoPhillips, shifted gears.
The announcement marks the first LNG export terminal approved by the Trump administration, which has promised to expand domestic energy production as a cornerstone of improving the U.S. economy.
“This announcement is another example of President Trump’s leadership in making the United States an energy dominant force,” U.S. Secretary of Energy Rick Perry said in a statement. “This is not only good for our economy and American jobs but also assists other countries with their energy security.”
The rise in U.S. natural gas drilling is showing no signs of slowing. The U.S. Energy Information Administration is predicting domestic production will exceed 73 billion cubic feet per day this year, the secondhighest tally on record.
A 2015 report by the Department of Energy estimated LNG exports would add an average of $20 billion per year to the nation’s economy through 2040.
Golden Pass would add to a growing list of LNG export terminals under development in the U.S. Cheniere Energy began exporting last year from its Sabine Pass terminal in Louisiana; last week, Cheniere added Poland to its growing list of export destinations.
As of January, seven LNG export facilities were under construction, according to the Federal Energy Regulatory Commission. Another four have been approved but not yet begun construction.
Charlie Riedl, executive director of the Center for Liquefied Natural Gas, said in a statement that the Golden Pass approval “is critical for the United States to fully recognize the potential benefits of its vast natural gas resources.”
How many of those U.S. LNG facilities will ultimately get built remains to be seen. A boom in LNG export facilities in Australia and the Middle East has raised the specter of a global glut of LNG.
But demand is on the rise. A report by Shell this year put the number of LNG importing countries at 35, a 20 percent rise since 2015, with Colombia, Egypt, Jamaica, Jordan, Pakistan and Poland building import facilities.
Global efforts to reduce carbon emissions are in some part driving demand, with countries like China looking for alternatives to coal to improve air quality and drive down greenhouse gas emissions.
There has been no announcement on when Golden Pass will begin construction. But the LNG outfit is estimating construction will provide 45,000 direct and indirect jobs over five years, along with another 3,800 direct and indirect jobs over the next 25 years when the facility becomes operational.
“This is not only good for our economy and American jobs but also assists other countries with their energ y security.”
Rick Perry, energy secretary