Once upon a time, all of five years or so ago, there was hand-wringing about the proposed — and vast — expansion of American exports of liquefied natural gas. Will this country’s supplies of natural gas run out? Will prices rise exponentially?
This argument had multiple important implications for Louisiana.
The big natural gas export facilities promised thousands of new construction jobs for southwestern Louisiana, at the Sabine and Calcasieu rivers. Their exports would be valuable new wealth for this country as the shale oil boom gave us the natural gas and oil to export.
Cleaner-burning gas is better for the environment than coal, and LNG exports would be contributing to that global concern and at the same time providing energy for friendly countries around the world.
At the same time, Louisiana’s petrochemical plants were flourishing on low-price natural gas, generating thousands of new jobs — including construction and operation — that were Godsends to the Mississippi River industrial complex as well as upstream on the Calcasieu, in the Lake Charles area.
We believe energy forecasters and regulators were right to boost LNG exports: Today, the low-price environment of natural gas is much the same, and some oil and gas exporters are investing further in Louisiana’s Haynesville Shale formations, as well as other places, to provide a continuing supply of product.
Louisiana is thus benefiting doubly from energy production and consumption of natural gas as a feedstock in our industries.
All that said, it’s still a business. That means that market conditions, not scarcity of natural gas, drive the trains — a small pun, as “trains” are the units at LNG export facilities.
The news that Cameron LNG has asked federal regulators for a six-year extension to complete construction of an expansion at its Hackberry export terminal in southwest Louisiana is a sign of the market’s maturing — if that can be used for such a relatively new industry here.
If the extension is granted and construction proceeds, that expansion would add 515 billion cubic feet per year of LNG exports for the company. Cameron LNG said a partner in the joint venture declined to invest in the expansion and had to be bought out, meaning delays for the project.
The progress made to date, and the potential for more LNG exports, are nevertheless encouraging for Louisiana. Having five units could boost exports to 24.92 million tons of LNG per year and make Cameron LNG the second-largest LNG operation in the U.S. behind Cheniere Energy's Sabine Pass site, also in southwest Louisiana. That facility has five LNG units and a sixth that's under construction. Six units at Cheniere Energy could export up to 27 million tons of LNG each year at full capacity.
The shale-drilling boom thus continues to benefit the American economy and provide cleaner energy to the world. We hope it continues for a good long time to come.