Page 5 - LatAmOil Week 44 2021

LatAmOil COMMENTARY LatAmOil

That rule contains language that is “virtually thermal power plant (TPP) that will use regas-
identical” to the Small-Scale LNG Access Act, ified LNG as a source of fuel in July. The TPP
which the two senators first introduced in July is being built in Crabbs, a town on the Crabbs
2017, according to information posted on Peninsula on Antigua’s northern coast. The area
Rubio’s website. is already home to a 50.9-MW TPP that burns
When the bill was first proposed more than petroleum products, but the new plant will be
four years ago, members of the Senate’s Energy the first gas-fired facility of its kind on the island.
and Natural Resources Committee voted 13-10 Eagle LNG Partners is not the only US firm
to let it proceed to the floor for further debate. exploring opportunities in the region. Okra
It did not pass in the Senate, however, despite Energy, based in Washington State, has been
the fact that it had drawn support from both making small-scale LNG shipments to Peru
Republican and Democratic members of the for several years, and in July 2020 its subsidiary
committee. Okra Energy Alabama (USA) signed a five-year
The initial failure of the bill had limited con- supply agreement with Énestas Energy & Gas, a
sequences, since the DOE adopted equivalent privately-owned Mexican firm.
rules governing requests for small-scale LNG
permits under the administration of President The reasons for failure
Donald Trump. Nevertheless, Rubio and Cas- Notwithstanding these potential benefits, the
sidy have re-introduced the measure in the Sen- Small-Scale LNG Access Act is not likely to
ate multiple times since the adoption of the rule; become part of the US legal regime this time
and each time they have failed. around.
Even if the bill is approved by the Energy and
The potential impact Natural Resources Committee and passes in the
Both Cassidy and Rubio have pointed out that Senate, it will probably fail to clear the House
the Small-Scale LNG Access Act is likely to have of Representatives, where the Democratic fac-
the biggest impact on energy markets in Central tion holds the majority of seats. That faction
America, South America and the Caribbean. In includes a substantial number of environmen-
their November 3 statement, the two senators tally minded legislators who would likely oppose
described these regions as a logical destination initiatives that might benefit the US fossil fuel The bid to secure
for small-scale exports of US-produced gas. industry, and their sentiments would likely carry
Cassidy’s statement in particular noted that the day if the measure were subjected to a vote passage of the
while demand for cleaner fuels is rising in these in the House. Likewise, President Joe Biden,
regions, US gas producers have yet to make sub- who made a point of signing an executive order Small-Scale
stantial inroads there. “The Caribbean small- blocking the construction of the Keystone XL LNG Access
scale LNG export market represents a relatively oil pipeline on his first day in the White House,
untapped outlet; the United States only exported cannot be expected to favour such a bill. Act appears
approximately 138 bcf [3.908 bcm] of natural Another mark against the Small-Scale LNG
gas to the region from February 2016 [to] July Access Act is its obvious tilt against Venezuela, to be more
2021,” it commented. given that the Biden administration appears to
Rubio and Scott, meanwhile, noted that the be less committed than Trump’s team to main- politically than
measure could also have positive practical con- taining tight sanctions on that country and its economically
sequences within the US, since their home state oil industry. Both Scott and Rubio stressed that
already has a stake in a number of LNG projects. point on November 3, with the former saying motivated
“Expediting approval of small-scale natural gas that the US should work to reduce the consump-
exports would strengthen an emerging sector of tion of Venezuelan fuel at TPPs in Latin Amer-
Florida’s economy and bolster our existing ties ican and the Caribbean. Likewise, the latter
with Caribbean and Latin American nations,” commented: “Importantly, the bill would also
Rubio said. ensure that bad actors, including the criminal
Scott made similar remarks. “Reducing the regimes in Venezuela and Cuba, do not bene-
burden of federal regulations will mean more fit from expedited access to American energy
good-paying jobs for Florida families in the exports.”
emerging industry of small-scale natural gas Overall, then, the re-introduction of the
exports,” he said. “Anything we can do to make Small-Scale LNG Access Act appears to be
LNG more accessible and cost-effective to our more politically than economically motivated.
partners throughout Latin America and the This move is likely to be viewed positively by US
Caribbean ... is good for the United States.” voters who already support the bill’s sponsors,
Neither Rubio nor Scott mentioned specific and it may even draw positive attention from
LNG initiatives, but it is worth noting that Tex- undecided voters with a positive view of the gas
as-based Eagle LNG Partners is already export- sector. But it is not likely to pass into law under
ing the fuel to several Caribbean island states current conditions, with the Democrats holding
from its terminal in Jacksonville, Florida. Earlier the presidency and a majority in the House.
this year, for example, the company added Anti- As such, the matter of small-scale LNG
gua and Barbuda to the roster of its Caribbean export permits will remain in the hands of the
customers, teaming up with Antigua Power Co. DOE, which is still operating under the rule
(APC) and the Antigua Public Utilities Author- adopted in 2018.
ity (APUA) for an LNG-to-power project. It remains to be seen whether the Biden
The three companies broke ground on a new administration lets that rule stand. ™

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