The following op-ed was written by Todd Staples, president of the Texas Oil & Gas Association:
The Biden Administration’s recent decision to pause the permitting approval process for U.S. liquefied natural gas (LNG) exports is a major mistake based on inaccurate information that puts American jobs and allies at risk and undermines the global progress made possible through increased use of American natural gas.
In their decision in January to pause all pending approvals of new LNG export facilities, the Biden Administration pointed to U.S. LNG exports’ potential to raise domestic energy costs.
This is baseless.
The truth is, according to an analysis prepared by Texas Oil & Gas Association (TXOGA) chief economist Dr. Dean Foreman, the real price of natural gas in America hit its lowest point in 30 years in mid-February while our LNG exports have tripled in volume since 2019.
Texas’ LNG exports to Europe – 6.8 billion cubic feet per day in FY23 – reached a record high of 8.1 bcf/d in October 2023. At the same time, natural gas prices at Henry Hub, Louisiana, fell as low as $1.52 per million btu (mmbtu) in mid-February 2024, marking the lowest real prices for the month on record since 1994.
What’s more, our research confirms that expanded LNG exports actually spur production and productivity gains, which help to drive prices down.
In Texas, we know LNG exports have a substantial positive effect on our state’s economy.
By TXOGA’s estimates, nearly 30% of Texas’ total dry natural gas production ultimately is exported as LNG. Approximating the LNG industry’s impact across the value chain, conservative estimates suggest that LNG exports directly support 18,000 jobs through the value chain and another nearly 54,000 jobs in total, through direct, indirect and induced activities.
Furthermore, our research finds halting LNG export permits approvals risks nearly $200 billion of investments over the next five years and an annual average of 9,000 direct jobs that we estimate would be put to work in the American economy. Even just the pause in the permitting process is causing major disruptions and costing our nation billions of dollars in economic activity.
U.S. LNG exports have not only spurred new U.S. production and helped keep domestic natural gas prices low, LNG exports from the U.S. bring cleaner, more secure energy to our trade partners around the world.
This incoherent and inconsistent policy of open-ended delays of LNG export projects’ approvals throws a new, unnecessary roadblock in the way of world-leading environmental efforts and unmatched responsibility in oil and natural gas development. It will slow and discourage robust investments in energy and the environment and stifle our ability to deliver energy freedom and security around the world.
And the timing couldn’t be worse.
With so much uncertainty in the world, this is a devastating blow to a proven technology that benefits our state, nation and global allies. The need for reliable, responsibly produced energy from a stable trading partner has never been more crucial.
Texas is that trade partner. Indeed, American energy leadership starts in Texas. Our producers, pipelines, refineries, service companies, LNG facilities and exporters are answering the call to alleviate a global energy crisis, made worse by war.
Reckless decisions like this squander our nation’s global energy leadership and force our allies to look to other nations, some of which are hostile to America, to meet their energy needs. It directly emboldens and strengthens America’s adversaries while hurting America. Other countries are already positioning to take advantage of this self-inflicted wound.
We urge the Administration to swiftly reverse this decision so that America can continue to provide the affordable, reliable energy that fuels modern life, advances environmental progress, and ensures energy security for our nation and its allies.