Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
The continued war in Ukraine and moves by our European allies to find alternatives to Russian gas for their domestic energy security have had a significant impact on U.S. LNG exports. U.S. LNG exports grew by nearly 20% during the first four months of the year, according to a report released by the Energy Information Administration this week. About 11.5 billion cubic feet a day of LNG was exported from U.S. ports between January and April, compared to an average of 9.75 billion cubic feet a day for the full-year of 2021, the EIA said.
The United States is now the largest supplier of natural gas to Europe and is quickly on its way to becoming the world’s largest supplier of LNG. The increase was driven by additional export capacity at Cheniere Energy’s Sabine Pass terminal and Venture Global’s Calcasieu Pass terminals. The report details how in the first four months of 2022, LNG imports from the United States to the EU and the United Kingdom have more than tripled, compared with 2021. With the EU pledging to further ween itself off of Russian gas, these exports should continue to grow.
This increase is dramatic and represents a fundamental game change in the world energy markets. With no end in sight for Russian aggression in Ukraine, and the stability and reliance on Russian gas in the west likely deemed forever unsustainable, it is very possible that the United States could solidify this market for some time, providing long-term demand increases to our sector.
However, additional investments in energy infrastructure in the United States and increases in production will be necessary to sustain this growth. So far, the current Administration has been hesitant to signal support for such investments. Increasingly, the hope is that it will be difficult to argue with these numbers. The reality on the ground is the demand for U.S. LNG is out there, and unlikely to go away anytime soon. Hopefully, we will see policies match up to this reality before long.
Biden Administration Takes Significant Executive Action on Renewable Energy Supply Chain
President Biden, on Monday of this week, issued a directive to use his emergency powers under the Tariff Act of 1930 to facilitate a 24-month “bridge” for certain solar imports. These imports were put on hold due to an investigation into potential dumping practices from China and Chinese firms operating in other countries.
In related actions, the President signed a handful of executive orders that could allow for major government action to direct domestic manufacturing of clean energy technologies. The orders use the Defense Production Act trigger to state that domestic manufacturing of five types of clean energy products are critical to national security. The five products identified in this order were:
- Solar panel parts, like photovoltaic modules and module components
- Building insulation
- Heat pumps, which heat and cool buildings super efficiently
- Equipment for making and using clean electricity-generated fuels, including electrolyzers, fuel cells, and related platinum group metals
- Critical power grid infrastructure like transformers
This statement could allow the administration to mandate direct government purchases or production orders for the technologies if President Biden decides to take this step in the future. This action comes at the request of many environmental action groups who have become frustrated with the continued lack of domestic manufacturing of critical components of renewable energy and the supply chain to support its growth here in the United States.
We will have to wait to see how impactful this order is, as details are still forthcoming. However, this issue is important to monitor as the expanded use of the Defense Production Act for energy could have widespread implications for our sector. It is also possible that the list of products could be expanded at some point.
DOE Releases Notice of Intent on Hydrogen Hubs
As was required in the bipartisan infrastructure bill that passed earlier this year, the Department of Energy releasing a notice of intent this week on the creation of hydrogen hubs in the United States. The bipartisan package includes $8 billion toward the hydrogen hub program, dubbed H2Hubs, to create four sites spread out across the country. According to the documents, DOE plans to prioritize project proposals with workforce development opportunities and access to hydrogen feedstocks in determining the sites. Energy Workforce will continue to follow these developments and highlight any opportunities for our membership.
If you would like to get involved with the Council’s advocacy efforts or the Government Affairs Committee, contact SVP Government Affairs Tim Tarpley.
Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Energy Workforce newsletter, which highlights sector-specific issues, best practices, activities and more.