For the first time in two years, federal regulators have green-lighted a big new industrial expansion in Louisiana’s burgeoning market of natural gas exports to foreign countries.
Venture Global gained approval for the new project, on the Calcasieu Ship Channel in southwest Louisiana, from the Federal Energy Regulatory Commission.
It’s been a time coming, as the original project was announced by then-Gov. Bobby Jindal and company officials in 2014. It’s about $5 billion in capital investment and about 2,000 construction jobs.
Those jobs are too easily discounted by some critics of the oil and gas industry as temporary employment. In fact, high-paying jobs in construction — and there are more such liquefied natural gas projects in the pipeline for the future — will be a boost for that region of the state and Louisiana for years to come. Maintenance of such big facilities is also a promising source of full-time and contractor jobs far into the future.
The same company is also working on federal approval for a Plaquemines Parish facility.
Though rig counts have been suffering lately, Louisiana provides a steady flow of natural gas through a strong pipeline network. Foreign demand for natural gas is met through the big LNG terminals. As a consequence, long-term demand for natural gas is likely to continue.
It is, in many cases, being used as a more efficient and cleaner-burning fuel than coal or oil in Asia.
Demand has been growing in China, Japan and South Korea. Assuming that trade disputes over other products and services don’t derail America’s relationship with these important customers, the LNG business is likely to expand. The U.S. is now the fastest-growing LNG exporter.
This kind of economic benefit couldn’t come fast enough for Louisiana’s delegation in Congress. “The permit approval process is just like the rest of bureaucracy: burdensome and slow,” said U.S. Sen. John N. Kennedy, R-Madisonville. The good news, though, is that FERC aims to use the new project as a template for faster evaluation of these big projects. U.S. Sen. Bill Cassidy, a Baton Rouge Republican, sponsored legislation to expedite approval of small-scale shipments of LNG, and its provisions were adopted and implemented last year by the Trump administration.
It's a huge worldwide market. The U.S. Department of Energy estimated that LNG exports will grow from 3.6 billion cubic feet a day to 8.9 billion cubic feet by the end of the year, as facilities now under construction come online.
At one time, industrial users of natural gas in Louisiana feared that LNG exports would raise the price of their feedstocks. However, the avid pace of petrochemical construction along the Mississippi and Calcasieu rivers suggest that the industry sees the future positively.
Let it roll on.