Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
According to a report released by the U.S. Energy Information Administration on Monday, the United States has officially become the world’s largest LNG exporter. The U.S. is now delivering an average of 11.2 billion cubic feet a day to overseas buyers — a truly stunning development given that the first exports from the United States just began flowing in 2016. Before 2016, the U.S. was actually building LNG import facilities, many of which, due to the shale boom, were ultimately retrofitted to become export facilities. This stunning turnaround has completely changed the worldwide LNG markets.
The U.S. LNG export industry is situated mostly along the Gulf Coast and now has the capacity to ship 11.4 billion cubic feet of gas a day, enough to pass Qatar and Australia as the leading worldwide exporter. The United States claiming the top spot could not have come at a more important time in world politics. The Russian invasion of Ukraine shows no sign of ending anytime soon. Russia continues to show, most recently by their dialing down of gas exports to Europe via the Nordstream 1 pipeline, that it is willing to use gas exports as a weapon of war. Fears persist that this move will be part of a longer and more pronounced effort to put political pressure on European countries to remove sanctions against Russia for the invasion, as gas scarcity becomes more acute in winter.
This weaponization of gas means that our allies in Europe continue to look for reliable and long-term sources of gas to power their economies and keep their populations warm as winter descends on Europe. This situation presents an opportunity for the United States to open up a huge market for LNG that will sustain itself for many years. As long as President Putin remains in power in Russia, it appears unlikely that European leaders will ever look to Russian gas to provide energy security to the continent. Energy Workforce continues to push the Biden Administration and Congress to take the necessary steps to allow the energy infrastructure and production necessary to sustain this growth to occur.
Senate Aims to Ease Semiconductor Shortage with Passage of CHIPS Act
The U.S. Senate is moving the “CHIPS” Act closer to passage this week. On July 26, the bill passed the body and now heads to the House for final passage. The bill includes $52 billion initial funding for semiconductor manufacturing subsidies, tax credits for continued semiconductor production and funding for research at the National Science Foundation and Department of Energy.
The United States and the world have faced a significant semiconductor shortage in recent years, which has slowed down many forms of manufacturing and leading to a shortage of components used all throughout the supply chain, including oil and gas.
The bill was developed as China’s fast-growing share of the semiconductor market (9% of market in 2020) has caused concern among many. Taiwan also controls around 9% of the market, so the prospect of increased tensions in the Taiwan strait raises the possibility of a significant disruption of global semiconductor distribution. If the CHIPS Act ultimately passes the House and is signed by President Biden, the $52 billion in funding will likely spur additional production facilities (like Samsung’s recent announcement) to be built in the United States.
If you would like to get involved with Energy Workforce 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.