Energy Policy

Why LNG Legislation Matters

It was only eight years ago that the United States surpassed Russia as the world’s leading producer of natural gas. Then, earlier this year, the United States achieved another major milestone when the nation’s net natural gas exports exceeded imports for the first time.

Experts believe that this trend is likely to continue into the foreseeable future, as the country’s liquefaction capacity continues to expand. With five new projects currently under construction, the EIA reports that by the end of 2019, U.S. liquefaction capacity will skyrocket from 2016’s 1.4 Bcf/day to 9.5 Bcf/day.

And despite the acceleration of United States liquefied natural gas (LNG) exports, Congressional leaders are now looking to pass legislation that will speed up the export process even more.

An example of such a bill is the Small Scale LNG Access Act. This was introduced this past October by Bill Cassidy (R-La.) and Marco Rubio (R-Fla.). It is designed to fast-track the export of small-scale volumes of liquefied natural gas. Annual volumes could be as high as 51.1 billion cubic feet (Bcf) per year, which equates to 0.14 Bcf/day, most of which will go to the Caribbean and Latin American nations.

At present, all natural gas exports are subject to review by the Energy Department, and must be certified as being in the public interest to move forward with the shipment. Should this legislation gain traction and be passed into law, a streamlined approval process would likely further entrench the U.S. as the preeminent global leader in LNG.

In the official press release, Senator Cassidy expounded on his reasons for supporting the legislation: “This bill promotes the growth of American natural gas, creating well-paying jobs with good benefits for hardworking families in Louisiana. The faster approval of small-scale natural gas shipments will create American jobs, improve Caribbean energy security and lower greenhouse gas emissions.”

Detractors, meanwhile, argue that as more American natural gas begins to go abroad, domestic customers may be left with higher prices. However, the growth of the natural gas market has served to undercut prices on other energy sources for domestic customers, so it is imperative that consumers stay vigilant and keep informed on the latest developments.

At Constellation, we believe firmly in energy choice and strive to provide our customers with the best energy solutions and competitive markets possible. As such, it is critical to keep a finger on the pulse of the latest policies being crafted in Washington—you never know what decisions will impact your bottom line.

To get more information about how to develop a successful energy strategy in a rapidly changing economy, click here.

You may also be interested in these related articles: