TXOGA, API Comment on LNG Court Ruling

In a statement sent to Rigzone by the Texas Oil & Gas Association (TXOGA) this week, TXOGA President Todd Staples said a court ruling “to end the LNG export permit approval halt achieves the right result”.

“U.S. natural gas has ushered in a new era of energy security by providing for needs here at home and to allies around the globe,” he added.

“The use and production of natural gas has resulted in billions of dollars being available to fund schools, road and other basic needs, is the dominant reason for declining CO2 emissions in the power sector and is one of the most affordable energy sources available,” he continued.

“Every family has benefited from a robust natural gas sector and LNG exports play an ever-growing role in a stronger Texas and America,” Staples went on to state.

TXOGA noted in the statement that, since the Biden administration announced the LNG export permit pause in January, TXOGA has raised concerns about the action.

It pointed out in the statement that it “joined other trade associations in sending a letter to the U.S. Department of Energy (DOE), published a statement and an op-ed, testified at before the Texas House Select Committee on Protecting Texas LNG Exports, and released an analysis … showing that U.S. LNG exports have not had any sustained and significant direct impact on U.S. natural gas prices and have, in fact, spurred production and productivity gains”.

When Rigzone asked the American Petroleum Institute (API) for comment on the court ruling to end the LNG export permit approval halt, an organization spokesperson replied with a quote from Rob Jennings, the API’s VP of Natural Gas Markets.

“We welcome this week’s court decision as a positive signal for U.S. energy workers and our allies abroad,” Jennings said in the quote.

“The benefits of U.S. LNG exports are well-established – they help stabilize global energy markets, support thousands of American jobs and drive emissions reductions around the world by displacing dirtier fuels,” he added.

“The administration should swiftly begin issuing long-overdue non-FTA permits to resume American energy leadership,” he continued.

The API spokesperson also directed Rigzone to an API column penned by API writer Mark Green. In that column, Green said, “it’s unlikely DOE will immediately start issuing LNG permits again, given that in the 11 months before the LNG pause was announced, DOE had not issued a single exports permit to non-Free Trade Agreement countries”.

Green did state, however, that the ruling is “welcome news for America’s friends around the globe and for American workers in natural gas and in the LNG sector – as well as the communities they help support”.

“Perhaps – just perhaps – the ruling marks the beginning of the end of a misguided policy that has damaged American credibility and reliability as an energy supplier while potentially risking domestic economic benefits,” he added.

In a court document issued by the U.S. District Court, Western District of Louisiana, Lake Charles Division, which was seen by Rigzone, U.S District Judge James D. Cain Jr. stated, “the Court finds that the Plaintiff States are entitled to the Injunctive Relief requested as to the LNG Export Ban”.

“Accordingly, the Court will grant Plaintiffs’ Motion for Preliminary Injunction, and order that the LNG Export Ban be stayed in its entirety, effective immediately,” he added.

Rigzone has asked the White House and the DOE for comment on the TXOGA statement, Jennings’ statement, the API column, and the court ruling. At the time of writing, neither department has responded to Rigzone’s request yet.

On January 26, U.S. President Joe Biden revealed in a statement posted on the White House website that his administration was announcing a temporary pause on pending decisions of LNG exports, “with the exception of unanticipated and immediate national security emergencies”.

“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,” Biden said in the statement.

“This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time … my administration will not be complacent. We will not cede to special interests,” he added.

“We will heed the calls of young people and frontline communities who are using their voices to demand action from those with the power to act,” Biden continued.

“And as America has always done, we will turn crisis into opportunity – creating clean energy jobs, improving quality of life, and building a more hopeful future for our children,” Biden went on to state.

Wood Mackenzie’s LNG team previously outlined to Rigzone that the impact of the Biden administration’s temporary pause on pending approvals of liquefied natural gas exports depends on several things.

In a report sent to Rigzone shortly after Biden’s statement, analysts at Standard Chartered said the pause will have no effect on existing terminals or on those already approved but warned that it is likely to mean decisions on pending approval requests are deferred beyond the November election.

Source: www.rigzone.com