Exports and Greenhouse Gas Emissions

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A New Challenge for USLNG (WoodMac)
Ed Crooks (Feb. 05): The Trump administration had an unambiguous view of USLNG exports: it aimed to maximize them. How the Biden administration resolves the climate complications of USLNG will have a significant impact on the outlook for USLNG export projects over the next four years, and perhaps beyond. Individual LNG project developers are likely to be asked to provide a detailed [GHG emissions] picture for their specific facilities and sources of gas.

If future filings for FERC approvals are rejected, it would not have much impact on the short-term outlook for US LNG exports. There are 15 projects that have already secured FERC approval but not yet started construction, with a total capacity of nearly 190 mtpa.

Alex Munton, WoodMac’s principal analyst for LNG in the Americas, who has a report coming out on this issue next week, said: “For these projects the issue is not permits; it’s lack of market.” However, there are several projects that received approvals in 2019, valid for between four and seven years. If the projects look like they are not going to be able to enter service within those deadlines, they will need to seek extensions, which may be more difficult to obtain in the new regulatory environment.

Munton expects a continuation of the trend towards greening LNG by cutting its emissions from upstream production, liquefaction, and transport.

“These initiatives are less in response to impending regulatory changes in the U.S., although that may be a consideration, than it is to commercial pressures across the industry at large. To win customers, LNG developers are having to do more to prove their projects’ green credentials.”

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