Protest of Venture Global Plaquemines LNG
By Tyson Slocum
On July 11, 2022, Public Citizen filed a protest of the application by Venture Global Plaquemines to increase its liquified natural gas (LNG) exports by 165.33 Bcf/yr. We protest this application to expand the volume of authorized LNG exports because it is not in the public interest. In just a handful of years, the United States went from zero LNG exports to today serving as the largest natural gas exporter in the world. These record LNG exports are radically upending domestic natural gas markets, resulting in a direct and punishing correlation between exports and increased energy price burdens for American families:
Last month’s explosion at the Freeport LNG export plant in Texas has thrown into stark relief the trade-offs inherent in America’s pursuit of maximizing liquefied natural gas exports. The blast on 8 June 2022 cut US LNG exports by approximately two billion cubic feet per day (Bcf/d), or ~20%. Market reaction was as dramatic as the explosion itself. The month-ahead price of gas on Henry Hub crashed from a peak of $9.57 per million British thermal units (MMBtu) to $8.15/MMBtu within just a few hours. Why? Freeport’s outage made 2 Bcf/d of US shale gas unexpectedly available to the domestic gas market, which was running hot due to record demand for feed gas from the seven LNG plants in operation across Texas, Louisiana and Georgia. A similar reaction occurred in the Texas electricity market. The average price of power across all ERCOT locational nodes briefly fell from more than $60 per megawatt-hour (MWh) to around $26/MWh when the explosion took Freeport offline . . . Freeport LNG said in a statement on 14 June, six days after the explosion, that . . . the facility will be offline for much longer than the original time frame of three weeks, prompting more market turmoil. Henry Hub crashed a further 15% on the news . . . US LNG exports are now running at their lowest rate in four months, granting much-needed reprieve to American consumers. The fall in exports has becalmed Henry Hub, with the August dated contract falling by almost 40% since its pre-explosion peak . . . The Freeport outage illustrates how US LNG exports help to keep a lid on soaring European energy prices, while driving up domestic prices. Put simply, more US gas in Europe means less gas in America — and vice-versa.
Providing Venture Global Plaquemines LNG with a blanket authorization to expand LNG exports by an additional 165.33 Bcf/yr is inconsistent with the public interest, as it unnecessarily threatens American families with higher domestic price risk. Venture Global Plaquemines LNG has provided no evidence that denying the requested expansion of export volume will result in any harm to the company. But granting Venture Global with a blanket authorization to expand its LNG export capacity needlessly exposes American families and the U.S. economy to significant harm in the form of continued energy price risk. Therefore, the Department of Energy must conclude that expanding export volumes is not in the public interest.
Read the full protest filed with the U.S. Department of Energy here: PlaquemineI