Page 6 - NorthAmOil Week 44 2021

NorthAmOil COMMENTARY NorthAmOil

US Senators eye Latin American

and Caribbean LNG markets

Five members of the upper house have re-introduced a measure designed to

expedite the permit process for small-scale LNG exports

AMERICAS EARLIER this week, five US Senators came out When the bill was first proposed more than
in support of draft legislation that would give US four years ago, members of the Senate’s Energy
WHAT: natural gas producers incentives for targeting and Natural Resources Committee voted 13-10
Rubio, Cassidy and three markets in Latin America and the Caribbean to let it proceed to the floor for further debate.
other Republicans have region. It did not pass in the Senate, however, despite
submitted the Small- In theory, the proposal, known as the Small- the fact that it had drawn support from both
Scale LNG Access Act for Scale LNG Access Act, could benefit coun- Republican and Democratic members of the
consideration. tries in these regions, as well as US exporters, committee.
by opening up new avenues for the delivery of The initial failure of the bill had limited conse-
WHY: cleaner-burning fuel. In practice, though, it is quences, since the DoE adopted equivalent rules
The legislation has the likely to fail, largely for political reasons. governing requests for small-scale LNG permits
potential to facilitate US under the administration of former US Presi-
LNG deliveries to Latin The measure dent Donald Trump. Nevertheless, Rubio and
American and Caribbean The Small-Scale LNG Access Act was re-intro- Cassidy have re-introduced the measure in the
markets. duced in the US Senate on November 3 by five Senate multiple times since the adoption of the
Republican Senators – Bill Cassidy (Louisiana), rule; and each time they have failed.
WHAT NEXT: James Inhofe (Oklahoma), John Kennedy (Lou-
The bill is unlikely to isiana), Marco Rubio (Florida) and Rick Scott The potential impact
pass, though a nearly (Florida). Both Cassidy and Rubio have pointed out that
identical rule adopted by The bill is designed to expedite the approval of the Small-Scale LNG Access Act is likely to have
the Department of Energy requests for permission to export US-produced the biggest impact on energy markets in Central
will remain in place. natural gas in relatively small amounts – that is, America, South America and the Caribbean. In
in volumes of no more than 51.1bn cubic feet their November 3 statement, the two senators
(1.447bn cubic metres) per year. It calls for the described these regions as a logical destination
US Department of Energy (DoE) to expedite the for small-scale exports of US-produced gas.
approval of such requests “without modification Cassidy’s statement in particular noted that
or delay” on the grounds that such initiatives are while demand for cleaner fuels is rising in these The bill is
“consistent with the public interest”, according regions, US gas producers have yet to make
to statements released by Cassidy and Rubio. substantial inroads there. “The Caribbean designed to
“The current permitting process for LNG small-scale LNG export market represents a rel- expedite the
export facilities is expensive, and small-scale atively untapped outlet; the United States only
projects often are not cost-effective under cur- exported approximately 138 bcf [3.908 bcm] of approval of
rent conditions,” the statements said. “Reduc- natural gas to the region from February 2016
ing the time and investment required for [to] July 2021,” it commented. requests for
small-scale exports will benefit US production, Rubio and Scott, meanwhile, noted that the
manufacturing and construction jobs, while measure could also have positive practical con- permission
also reducing trade deficits with the importing sequences within the US, since their home state to export US-
country. Increasing LNG exports, even on a already has a stake in a number of LNG projects.
small scale, will positively impact the economies “Expediting approval of small-scale natural gas produced natural
of the United States, as well as the economies of exports would strengthen an emerging sector of
those receiving US natural gas.” Florida’s economy and bolster our existing ties gas in relatively
Both Cassidy and Rubio pointed out that with Caribbean and Latin American nations,”
the bill was designed to codify an existing rule Rubio said. small amounts.
adopted by the DOE in July 2018. That rule con- Scott made similar remarks. “Reducing the
tains language that is “virtually identical” to the burden of federal regulations will mean more
Small-Scale LNG Access Act, which the two good-paying jobs for Florida families in the
senators first introduced in July 2017, according emerging industry of small-scale natural gas
to information posted on Rubio’s website. exports,” he said. “Anything we can do to make

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