The government of Qatar, a small Middle Eastern nation, has taken advantage of the White House's suspension of approvals for domestic LNG exports to announce an expansion of its export capacity. Reuters report Qatar's new plan will produce an additional 16 million tonnes per year, increasing total production capacity to 142mmtpy.
Qatar has long been one of the leading exporters of liquefied natural gas, ranking alongside the United States and Australia as the three countries with the largest production capacity. Additionally, the market is in the midst of an oversupply as demand for natural gas in the Northern Hemisphere decreases due to a warm winter. This oversupply situation led to a collapse in commodity prices.
In response to Qatar's announcement, Goldman Sachs extended its prediction that the LNG market will weaken into the second half of this decade. “We believe that oversupply will lead to increased risks, especially from 2026 onwards, when Qatar's expansion is expected to begin in earnest, with the need to provide cash costs “Global gas prices could fall, potentially leading to gas supply disruptions.” The proportion of her LNG exports in the US is similar to that in 2020. ”
President Biden's moratorium will slow future expansion of U.S. export capacity, but will not affect new projects already authorized. If these projects are completed on schedule, U.S. production capacity will increase by approximately 50% by the end of 2027. It remains to be seen whether increased competition with Qatar will impact the progress of these planned and approved projects.
The White House has come under fire in recent weeks for allowing the delay, with lawmakers from both parties questioning the justifications offered. Of particular note is the criticism from Pennsylvania state senators Bob Casey and John Fetterman, both Democrats.
“Sen. Casey and I are very pro-energy, pro-jobs, pro-union and pro-security advocates,” said Sen. Fetterman. Said politiko. “We support the president, but we happen to disagree on this issue. I'm very clear: We need natural gas now. It's a critical part of our nation's energy stack.”
The West Virginia Democrat said at a hearing of the Senate Energy Committee, which he chairs, in mid-February. Joe Manchin said The White House's suspension should be “immediately rescinded” given the lack of justifiable reason. “Unfortunately, it appears the White House is already siding with climate activists who are determined to block further LNG exports,” Manchin said, adding, “The White House appears to be siding with climate activists who are determined to block further LNG exports.” “I'm very concerned that we're going to put our thumb on the scales at the Department of Energy because of this,” he added. they want. ” (Related: David Blackmon: Where does money and metal come from?)
Of course, the political outcome desired by this White House was clear to everyone. An outcome that pleases the major funders of the Democratic political movement in the climate alarm lobby is always advantageous. Unfortunately, these results tend to place U.S. domestic oil and gas businesses at a disadvantage in international competition.
This trend at 1600 Pennsylvania Avenue is politically troubling in presidential battleground states like Pennsylvania and Michigan, where labor union interests are as powerful within Democratic circles as the climate alarm sector. Sen. Fetterman has paid little lip service to the state's natural gas business during his 2022 Senate campaign, but he is concerned about union interests whose jobs are threatened by the White House's anti-natural gas stance. It seems like he suddenly had a change of heart when he started speaking out. .
Jeff Novers, president of the Western Pennsylvania Builders Association and a Democrat who supported Biden in 2020, told Politico:[Biden] It certainly hasn't done anything to promote or promote the use of natural gas, and natural gas continues to be seen as evil. ”
Words do matter, and the words of the President of the United States and his senior appointees matter more than anyone else's. There is no doubt that negative perceptions of natural gas and policy measures aimed at reining in the domestic industry are having a global impact. It should come as no surprise to anyone that unions, whose jobs are at stake, are beginning to take notice and speak out. If it spurs Democratic politicians to action, the more the better.
David Blackmon is an energy writer and consultant based in Texas. He spent his 40 years in the oil and gas business, specializing in public policy and communications.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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