Four Approved LNG Projects to Bring Billions to South Texas
Friday, November 22, 2019
Federal officials approved permits Thursday for four South Texas liquefied natural gas export terminals, clearing the way for projects that would pour tens of billions of dollars into the state economy, create thousands of jobs and solidify the Gulf Coast as a global hub of the LNG industry.
Along with expansion of an LNG export complex in Corpus Christi, three of the terminals would be located at the Port of Brownsville, providing an economic boost to one of the poorest regions in the nation.
The projects also would help open more lucrative markets in Europe and Asia for the vast amounts of natural gas produced in the Permian Basin in West Texas and other Texas oil and gas fields.
Natural gas output in the Permian is so great and domestic prices so low that companies merely are burning off the gas, in an industry practice known as flaring, rather than paying the costs of transporting it.
“Natural gas demand is growing rapidly around the world, and these export facilities will help ensure more of that energy comes from Texas and not our competitors overseas,” said Steve Everley, a spokesman for the industry-funded group Texans For Natural Gas. “More natural gas infrastructure means less flaring and lower emissions, which means this is a clear win for the Texas economy and our environment.”
The Federal Energy Regulatory Commission voted 2-1 to approve the projects, all of which are being developed by Houston companies. NextDecade, Texas LNG and Annnova LNG, a subsidiary of the Chicago utility company Exelon, are developing the Brownsville projects.
Cheniere Energy, the nation’s leading LNG exporter, is expanding its complex at the Port of Corpus Christi. The four projects would bring a combined $45 billion in investment.
The companies haven’t yet made final decisions to move ahead with construction as they line up customers and financing. The projects also face opposition from environmentalists and local residents worried about traffic, pollution and the impact on wildlife — including the endangered ocelot.
“Our communities are united in opposition to these dirty, dangerous projects,” said Rebekah Hinojosa, a local organizer for the the Sierra Club, an environmental advocacy group. “We will continue to pursue all avenues — from the courts to pressuring financial institutions — to ensure they are never built.”
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With four LNG export terminals already in operation along the Gulf Coast and two more along the East Coast, the United States is poised to be become the third largest exporter of LNG just behind Qatar and Australia over the next few months, a recent report from the global energy research firm Wood Mackenzie shows.
The four projects approved by FERC give the United States an extra 48 million tons of LNG production capacity, doubling the current production capacity of 46 million tons per year.
Global demand for natural gas is expected to grow significantly in coming decades as countries, particularly in Asia, abandon coal in favor of the cleaner-burning fuel. In Europe, the Trump administration is promoting American LNG to reduce the reliance on natural gas from Russia and the potential leverage it gives to the U.S. adversary.
“The commission has now completed its work on applications for 11 LNG export projects in the past nine months, helping the United States expand the availability of natural gas for our global allies who need access to an efficient, affordable and environmentally friendly fuel for power generation,” FERC Chairman Neil Chatterjee said.
In Brownsville, workforce development officials already are preparing job training programs for the plants. One of the poorest cities in the United States, the median income in Brownsville is roughly $35,000, which is much lower than the median income of $53,000 in Corpus Christi and $49,000 in Houston.
The projects are expected to create 7,000 construction jobs and more than 500 permanent jobs in Brownsville.
John Reed, chairman of the Brownsville Navigation District, which oversees the port and ship channel, said the region has waited several years for projects to win approval, a sign of a rigorous review process. But, he added, the benefits to local economy could be worth the wait.
“These new energy projects reflect our long-term strategy and vision for the port to be a catalyst for economic growth in the Rio Grande Valley by encouraging domestic and international business investments and driving developments that create new good paying job opportunities for the region,” Reed said.