Energy Secretary Rick Perry on Tuesday approved the first permit under his tenure to ship natural gas to overseas markets, even as large U.S. manufacturers are warning the Trump administration that those exports could lead to skyrocketing energy prices in America.
"This announcement is another example of President Trump's leadership in making the United States an energy dominant force," Perry said in approving the Golden Pass export terminal in Texas for shipping liquefied natural gas abroad. "This is not only good for our economy and American jobs, but also assists other countries with their energy security."
With the Department of Energy's approval, construction of the export terminal will begin, a project that will create an estimated 45,000 direct and indirect jobs over the next five years, according to the agency. The project will provide an estimated 3,800 direct and indirect permanent jobs over the next 25 years of operation. The Energy Department also estimated that the facility will generate $2.4 billion in federal tax revenues and $1.2 billion in state tax revenues.
The oil and natural gas boom over the last seven years driven by fracking has made the U.S. a top global producer of fossil fuels. President Trump wants a policy of "energy dominance," which appears to mean increased exports of domestically produced oil, natural gas and coal.
Nevertheless, manufacturers are pressing Perry to go slow, or risk a natural gas supply shortfall that could raise energy prices in the U.S.
The Industrial Energy Consumers of America, representing large industrial users on natural gas like Dow and Dupont, sent a letter to Perry recently that counters information delivered to the agency from the natural gas industry that called for a robust export agenda.
Paul Cicio, the head of the industrial users group, argued that "total LNG export volumes already approved by the U.S. Department of Energy (DOE) represent a serious threat to U.S. manufacturing competitiveness and jobs long-term. Every additional increment of LNG export volume compound this threat."
Cicio added that approved and conditionally approved natural gas exports total 92.7 percent of 2016 U.S. natural gas demand, which he called "a stunningly significant amount of natural gas exports." The approvals raise "enormous concerns of future price risk upon trillions of dollars of existing and future U.S. manufacturing facilities," he said.
"There is absolutely no need to expedite approval of further applications to export," said Cicio. "In fact, we urge the DOE to halt further approvals until the DOE or Congress defines public interest and with that determination, reconsider the status of applications to export." A public interest determination would consider the economic effects on the U.S. of exporting large amounts of natural gas.
"Exports of this volume are clearly inconsistent with President Trump's agenda to increase U.S. manufacturing jobs," Cicio said.
The head of the Center for Liquefied Natural Gas, Charlie Riedl, called the approval a boon for the economy. Riedl's group represents natural gas companies that want to increase exports of the fossil fuel. His group is also the one that Cicio is looking to counter in his letter.
"As numerous studies have demonstrated, including one by the Department of Energy from 2015, increased LNG exports will result in overall economic benefits to the United States upwards of $20 billion in average annual GDP growth through 2040," Riedl said on Tuesday. "The approval granted today is critical for the United States to fully recognize the potential benefits of its vast natural gas resources."
