Reuters/Darrin Zammit Lupi
The U.S government shutdown on Tuesday will continue to delay approval of LNG export terminals as workers at the Department of Energy are furloughed, which could cost the U.S. economy thousands of jobs and billions of dollars in economic activity, according to a senior vice president of a pro-business lobbying group in Washington Thursday.
The U.S. is in the middle of a natural gas boom and is looking to export its energy resource through liquefied natural gas (LNG) terminals. However, some companies have found they have to wait on the DOE to finish reviewing some proposed projects.
Delays in the approval process stem from the debate within the U.S. administration on how much natural gas should be exported without raising natural gas prices and reducing supplies in the U.S.
Proponents of LNG export facilities contend that investment in the construction sector will have positive impacts on the U.S. economy, because it will inject economic activity into industries tied to the energy sector.
In July, the Washington-based American Council for Capital Formation came out with a report titled, “Liquefied Natural Gas: Why Rapid Approval of the Backlog of Export Applications is Important for U.S. Prosperity,” authored by the vice president, Margo Thorning.
Thorning said that if the U.S. delays the approval of any projects, it could be difficult for the U.S. to sign long-term contracts with countries like Japan or South Korea, or any Asian country that relies heavily on imported LNG.
Currently, Australia and several other countries plan to enter the LNG export market and will compete for the same contracts as the U.S. Therefore, it is imperative that the DOE does not delay the process any further, Thorning said.
In the past two years, four projects have been approved. The most recents decision were made in May and September, when Dominion Resources Inc. (NYSE:D) received approval for the Cove Point terminal on the Maryland shore of Chesapeake Bay. To date, the DOE has authorized 6.37 billion cubic feet of LNG from the plant to be sold overseas.
The government shutdown has so far stopped the review process of LNG projects, thus again delaying the approval process, which, Thorning reiterates, will cost the U.S. thousands of jobs and billions of dollars in economic activity.
“This government shutdown is a bad thing not just for federal workers and those who need government service, but it's bad for the companies trying to get approval from the DOE,” Thorning said.