LNG Plant Review – Overblown Reaction?
March 20, 2024 Article by Jeffrey PriceYes, it was a real head-scratcher to learn that the Biden Administration chose to apply extra scrutiny to a recent application for an LNG liquefaction plant.
On the other hand, the Biden Administration’s rationale included citations about “carbon emissions”. It isn’t really the fault of an LNG plant that there are carbon emissions from use of its products. In fact, to the extent that LNG hastens the demise of coal, it is most certainly a green energy. (That’s why NG is called a transition fuel.) The issue is: Does the Biden Administration now have hesitations about burning NG? When did that idea take center stage? Did they temporarily lose their sanity and forget that a war is raging in East Europe? US NG is a critical piece in this geopolitical “game”. The logic of liquifying it and sending it to Europe means that this is an increasingly affordable source of energy that undermines the leverage of the evil Putin regime… This pumping-the-brakes on LNG makes no sense when examined in the contact of the Administration’s foreign policies. But there’s more to consider.
When you peer under the hood and learn about what’s actually going on, the story changes a lot. Although its editorial board screams with pain, a reporter for the Wall Street Journal pointed out in this article that there is a surplus of projects that have obtained the appropriate permits that are looking around for the requisite long-term contracts needed before moving forward with the project. In other words, the United States actually has a glut of “paper” LNG plants. So, what’s the big deal if one of these is being held up?
The WSJ article also talked about producers of natural gas throttling back, but that’s hard to do when it is a by-product of oil drilling out in the Permian Basin. That’s among the reasons why First Keystone Pecos provides industrial buildings for lease to midstream companies – in fact, we have several different companies focused on NG that have recently set up shop in our Park. Why? It’s because natural gas is an important industry and it requires servicing. And, yet, it’s only a by-product! It is a profitable business if the appropriate infrastructure is built to move it inexpensively to the coasts where it can be liquified and shipped abroad. What would be the alternative? Flaring? Not drilling the oil well? More bitcoin mines?
One thing, in particular, rankles me about how this regulatory roadblock came down. Apparently, this character, Bill McKibben has turned “LNG exports into a cause celebre”. Apparently, there is some sort of a TikTok climate “influencer” who has also impacted the thinking in the Biden White House. Caving to pressure from this cabal is the kind of wrongheaded behavior by the Democrats that fuels the ire of the Republicans. And, not without justification – it’s plainly irrational.
Moreover, the position that the natural gas, produced within the U.S., contributes to global warming is correct. What’s not valid is the silly notion that choking it off will somehow help. U.S.-generated gas will be replaced by NG from Argentina, Qatar, or Russia. That’s Economics 101.
The United States is a country that has been fixated on counterbalancing the Russian pressure applied to the Europeans, and a moronic TikTok “influencer” has compelled them to take an irrational step?!? Who are the idiots in the Administration who made this choice? Transfer him/her to the Forestry Department (Alaska Division).
So, let’s hope the Biden Administration’s LNG plant review decision was just a moment of ineptitude and that they’ll get their eyes back on the ball! STOP THE RUSKIES!
There’s more to think about when the TikTok’ers whine about NG’s adverse effects on climate – it’s called “What is the alternative?”
The Biden Administration knows that the speed and success of a conversion to an electric-dominated transportation infrastructure will take time – take a look at this article from the Wall Street Journal – the build-out of networks is going to take time and gobs of capital. There is a long way to go.
In the meantime, First Keystone is the little engine that could as we supply Pecos industrial space for rent.
The opinions expressed above reflect only those of the author and do not represent those of the First Keystone Pecos Industrial Park organization. First Keystone welcomes responsible fact-based discourses on these topics.