EnergyFederalTexas Natural Gas Export Permit Approved After Sen. Cruz Holds Federal Nomination Hostage

Approval of a liquefied natural gas export permit was advanced after a stand-off between the Department of Energy and Texas' junior senator.
May 3, 2022
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The approval of two liquefied natural gas (LNG) export permits has been expedited after Sen. Ted Cruz (R-TX) forced the agency’s hand.

In exchange for the permits — one of them for the Port Arthur-based company Golden Pass LNG — Cruz released his hold on a Department of Energy (DOE) assistant secretary nominee.

“As we’ve seen gasoline skyrocket, and as we’re seeing a horrific war in Europe, in Ukraine, the most powerful tool we have to undermine Russia is to take away their clients,” Cruz told Houston radio host Michael Berry on Tuesday. “And to do so that means we need to export more liquid natural gas, there were four permits pending to export liquid natural gas that the administration was sitting on that they were holding.”

“So, I placed a hold on a nominee at the Department of Energy and said that nominee was not going to move forward.”

Cruz said he spoke with DOE Secretary Jennifer Granholm, who was “very dismayed” at the lack of movement on the appointment, and she agreed to approve those permits in exchange for the removal of the hold.

The Texan Tumbler

A hold is “an informal practice by which a senator informs Senate leadership that he or she does not wish a particular measure or nomination to reach the floor for consideration.”

It is often deployed strategically by minority party members to force the issue on certain items that have stalled, just the way Cruz used it in this instance.

The other permit approved is for the Lake Charles, Louisiana exporter Magnolia Liquefied Natural Gas Terminal. That facility is expected to begin operations by 2026 and the Texas facility is set to become operational in 2024.

Cruz said the two facilities will increase U.S. exports of LNG to Europe by 500 million cubic feet per day. In 2021, the U.S. exported almost 4 billion cubic feet per day to Europe. Currently, Texas has only two existing LNG export terminals, one in Corpus Christi and another in Freeport. Combined, the two facilities ship 4.53 billion cubic feet per day.

There are six more Texas facilities approved but not yet constructed, and another facility is proposed but not yet approved.

Natural gas, and especially American LNG exports, have spurred a significant reduction in carbon emissions as the fuel source supplants coal in certain parts of the world.

The market for escalated LNG shipments lies mostly in foreign countries because of the Jones Act — a law that makes it cost-prohibitive to ship commodities, including LNG, domestically because of its requirement that U.S. port-to-port freighters be American built, owned, flagged, and operated.

This makes it difficult for Texas LNG to be shipped to New England, which in turn purchases LNG from European countries including Russia. What that restriction means for Texas exports is that more is aimed Eastward across the Atlantic, and more permitted facilities means larger export capacity.

“We thank Sen. Cruz for his longstanding support of Golden Pass LNG and we are grateful for his role in securing this opportunity to bring clean energy from Texas to power the world,” said Sean Ryan, President and CEO of Golden Pass LNG.

As inflation rises and the nation’s energy industry adjusts to post-pandemic levels of consumption, oil and gasoline prices are rising to heights not seen in years. Accentuating it is the war in Ukraine which has upset the status quo of the European natural gas supply, traditionally controlled by Russia.

Cruz and the U.S. energy industry hope this permit and more like it will help America fill that growing void and profit handsomely while doing it.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.