By admin 
The U.S. LNG export industry has recently encountered several stumbling blocks. And who will be American president for the next four years may not even be the greatest.
Court lawsuits by environmental groups, a contractor’s bankruptcy and President Joe Biden’s permit pause have added to uncertainty for U.S. LNG project developers and exporters this decade.
Top LNG exporter
The expansion of LNG export infrastructure over the past five years and the flexibility in freight destinations of American LNG have made America the world’s largest exporter of liquefied natural gas. Rising sales in Europe, which has been scrambling to replace Russia’s pipeline gas, and more LNG projects coming online this decade have boosted U.S. exports 12% in 2023 from a year earlier. With LNG exports of 11.9 billion cubic feet per day (Bcf/d), the United States easily beat its biggest rivals – Qatar and Australia – to become the largest LNG exporter last year, EIA data showed.
US LNG export capacity utilization averaged 104% of nominal capacity and 86% of peak capacity at the seven US LNG terminals operating in 2023, as relatively strong LNG demand in Europe amid high international natural gas prices supported increased U.S. LNG exports last year.
This year, U.S. LNG exports are expected to average 12.1 billion Bcf/d, up slightly from 2023, and 13.8 Bcf/d in 2025, according to the latest EIA. Short-term energy prospects for October.
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Two new projects, Corpus Christi LNG Stage 3 and Plaquemines LNG, are in the commissioning phase to begin LNG export operations, and each of these facilities will begin exporting LNG by the end of 2024, the EIA said.
Uncertainties lie ahead
Looking ahead, delays have recently emerged on a number of fully approved projects, and these have nothing to do with US government policy.
ExxonMobil and QatarEnergy have seen their $10 billion Golden Pass LNG export plant in Texas slide in the timeline to the end of next year after the project was delayed due to the bankruptcy of Zachry Holdings, the main construction contractor. The US Federal Energy Regulatory Commission (FERC) just granted ExxonMobil and QatarEnergy a three-year extension to build their export plant.
Earlier in August, Exxon said it was delaying the start of Golden Pass LNG until late 2025 from the first half of next year, after work at the facility came to a standstill following the bankruptcy of the prime contractor.
Then there is NextDecade’s Rio Grande LNG project, which is also facing delays due to a court ruling on the FERC permit.
In early August, a U.S. appeals court revoked the remand authorization of NextDecade’s Rio Grande LNG export project issued by the Federal Energy Regulatory Commission on the grounds that the FERC had failed to provide a supplemental environmental impact statement during the remand process have to hand over.
This case and other lawsuits create even more uncertainty for U.S. LNG developers.
The biggest one now, of course, is President Biden’s pause on permitting starting in January until the Department of Energy can update the underlying analytics for authorizations. Under pressure from environmentalists, the administration said early this year that DOE will conduct a new, updated assessment of the impact of such projects on health and communities during the temporary pause.
The consensus at Wood Mackenzie’s annual conference on ‘Gas, LNG and the Future of Energy’ last week was that the pause in LNG export licenses would ultimately be seen as something between “a blip” and “a speed bump” for the U.S. LNG sector, wrote Ed Crooks, Senior Vice President, Americas, at WoodMac.
The 47e President and American LNG
Some of the uncertainties for US LNG could be resolved as early as January, when the 47th US president takes office. Donald Trump has pledged to immediately restart LNG licensing, while the Harris campaign has not indicated whether President Harris would continue Biden’s licensing pause.
However, analysts have spoken out to assure that the US LNG export boom could be undermined if a Trump administration implements a promised 60% tariff on Chinese imports, which could lead to a Chinese retaliation against China, avoiding new LNG purchases from the US or US loads are resold.
After the US elections, “it seems very likely that the pause will be lifted. But new requirements could be placed on projects that would make obtaining an authorization a slower and more complex process,” says WoodMac’s Crooks.
The sector is calling for the pause to be lifted.
“You have to prevent this crazy LNG pause from happening,” said Ryan Lance, CEO of ConocoPhillips. said at the Gastech conference in Houston last month.
“We absolutely need reform, and we need more infrastructure,” Lance added.
A Trump administration is widely expected to ease permitting and ease regulatory burdens on the U.S. oil and gas industry.
“But the most important determinants of US hydrocarbon production are the revenue and capital allocation strategies of the Majors and E&P companies, which are unlikely to be much affected by what happens in Washington,” said WoodMac’s Crooks.
Even with President Trump, or probably because of a Republican in the White House, the environmental campaign against LNG will gain momentum in US courts, and US LNG developers may face new delays due to legal challenges.
By Tsvetana Paraskova for Oilprice.com
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