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Texas Strikes Oil Truth: LNG Exports Don’t Spike Prices!

In the aftermath of the Biden administration’s decision to hit the brakes on pending applications for liquefied natural gas (LNG) exports, reports from the lone star state are clapping back at the administration’s rationale. The administration threw out a temporary pause on pending decisions for exporting LNG to non-Free Trade Agreement countries until the Department of Energy updates “underlying analyses for authorizations,” citing outdated authorizations that don’t account for things like potential energy cost increases and greenhouse gas emissions.

But hold the phone! A fresh report from the Texas Oil & Gas Association is setting the record straight, bravely calling out these claims as hogwash. They bring the heat by pointing to federally-produced energy data that contradicts the Biden administration’s narrative. And they ain’t stoppin’ there – other industry reports are kickin’ up a fuss too, and The Center Square has been serving up the hot goss in a multi-part series on LNG exports.

According to the Texas Oil & Gas Association’s chief economist, Dr. Dean Foreman, LNG exports are not the price-driving boogeyman the administration makes them out to be. In fact, he argues that they’ve actually led to increased production, productivity gains, and lower prices. And he’s not just flappin’ his gums – he’s got the receipts to back it up! He points to federal data showing that as U.S. LNG exports soared, natural gas prices at Henry Hub, Louisiana plummeted to their lowest level in decades.

And get this – the U.S. became a net exporter of LNG for the first time in 2016, and by January 2024, net exports were a whopping 40 times higher than the average in 2016. As exports climbed, domestic natural gas prices remained at rock-bottom levels. So, as far as Dr. Foreman’s concerned, any talk about LNG exports jacking up domestic natural gas prices is about as accurate as a bull in a china shop.

The Texas Oil & Gas Association’s report also hollers about how LNG exports have been the gasoline in the tank for U.S. natural gas production growth and productivity, which has been music to the ears of American consumers. Not only that, increased exports have pushed the industry to up its game in technology and resource recoveries, all while beefing up estimated domestic recoverable gas resources.

Now, let’s talk turkey about the Lone Star State’s domination in the oil and natural gas game. In 2023, Texas was strutting its stuff, breaking records left, right, and center, including hitting record highs for natural gas production. Last October, Texas made history by racking up over a trillion cubic feet in a single month and accounting for nearly 30% of the national production total.

Recognizing the importance of the industry, the Texas legislature wasn’t dragging its feet when it passed bills to shield it from federal overreach and local bans on gas-powered engines or stoves. And the cherry on top? Texas voters gave a big ol’ thumbs up to a constitutional amendment to create a $5 billion Texas Energy Fund.

But wait, there’s more! The oil and natural gas industry also pumped a record-breaking $26.3 billion in state and local taxes and state royalties in fiscal 2023. And in case you were wondering, the governor and the state comptroller ain’t taking no guff from the Biden administration’s ESG policies, which they reckon are just out to rain on the industry’s parade. In fact, the comptroller’s office is adding financial companies to its state divestment list faster than you can say “Texas-sized steak.”

So there you have it, folks. The Lone Star State ain’t just blowing hot air – they’re proving that LNG exports are the cat’s pajamas, and anyone who says otherwise is barking up the wrong tree!

Written by Staff Reports

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