In a tour of Louisiana’s new Sempra facility to export liquefied natural gas, Donald Trump knew he had a winner.
What is better for the country than this industry? The boom in natural gas and oil production is from new exploration techniques and hydraulic fracturing, or fracking.
It’s an American boom in energy production that many had predicted years ago would not happen, assuming the onshore fields were played out. Production is high enough, based on the capacity and technology of the industry, that LNG facilities like the one Trump toured in Hackberry are generating new export earnings for this country from Europe and Asia.
Cleaner-burning natural gas is a benefit to the environment over coal, still burned in vast power plants in China and elsewhere. And to the extent that American gas is helping fuel European economies, as U.S. Rep. Steve Scalise, of Jefferson Parish, told reporters, our allies’ reliance on Russian natural gas is reduced.
That’s all a lot to celebrate, and we applaud the president for recognizing this Louisiana-led revolution in the world’s energy economy.
Clearly, though, this win-win-win deal is not without its future risks. Exports to China, for example, are part of the sunny scenario for long-term profits from LNG facilities, which are multi-billion-dollar investments in coastal Louisiana.
They are businesses that require long-term contracts for delivery of gas. There has been too much short-term thinking in the president’s administration about levying tariffs, essentially new taxes on American buyers of foreign products. Other nations were bound to retaliate.
The failure of trade talks with mainland China has resulted in the imposition of new retaliatory tariffs on American products. Ranchers and soybean farmers are among those already hurt by the president’s tariff wars, and now LNG exports will face a new and higher tariff barrier to Chinese markets.
The good news is that China’s economy — and particularly its damaged air and water quality — can obviously benefit from Louisiana’s LNG exports. It’s a giant market, and the smog over Chinese cities is something that cleaner gas generation of electricity can help improve, thus saving lives.
Even a dictatorial Chinese government must heed the economic and social costs of growth, given the impact of pollution in mainland cities. Our LNG is vital to China’s future, just as selling it abroad is economically beneficial to Louisiana and to America.
But even the best and mutually beneficial relationships can be soured by leaders picking fights. The LNG export trade is one thing that the president ought to keep in mind when there’s tough talk about trade wars.