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Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

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Discussing US LNG Exports with the President of the CLNG

The recent posts here on the burrito about LNG exports seem to have struck a chord with the energy community; features across various sites have yielded positive feedback, while being name-checked and linked to by the Wall Street Journal has done nothing to hinder readership. All this traction has culminated in a most wonderful opportunity to quiz the President of the Center for LNG (CLNG), Bill Cooper, on his views. CLNG is a trade association, and acts as a clearinghouse for educational and technical information on LNG.  Henceforth are Bill’s candid and straight-shooting responses…glorious stuff.

What first piqued your interest about LNG exports enough for you to accept your current role?

When I first came to work for the Center for LNG, the main focus was LNG imports.  Natural gas was in short supply domestically, and it looked like LNG imports would play a significant role in helping supply U.S. consumers.  The natural gas industry answered America’s call for more natural gas.  Some put their efforts into developing LNG regasification terminals.  Others put their efforts into combining technologies to produce shale gas.

The end result was that the industry delivered.  Now, the United States has an abundance of natural gas and is looking for additional markets to create jobs, generate new tax revenues, especially for state and local governments, and to help our geopolitical allies with their energy needs.  I wanted to be involved in shaping policy to meet our shortages then and continue that work as we address our abundance now. 

Bill Cooper

What do you believe will be the biggest benefit of LNG exports?

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LNG exports represent a tremendous opportunity to create thousands of new American jobs by bringing billions of dollars of investments into the U.S. economy. These jobs would not only be created at each LNG facility, but throughout the entire value chain, by employing people such as steel workers, pipeline operators, turbine manufacturers and others. That’s just one of the many benefits LNG exports will bring to the U.S. economy.

What is the most valuable lesson you learned from serving as counsel to the U.S. House Energy and Commerce Committee?

Treat everyone with respect, honor the institution, and truthfully address the issues with intellect and passion.  Never underestimate the power of a well-prepared, motivated individual to accomplish important goals in the face of indifference and opposition.  Remember that work done in the Congress affects all Americans and will for generations to come.  Take the responsibility seriously.

What do you think is the ideal volume of LNG exports to be leaving the U.S., and do you think the Department of Energy will under/overshoot?

I rely upon folks with far greater insight than me to make predictions about the proper level of LNG exports.  The experts generally say LNG exports will not exceed 6 to 8 Bcf per day, with an outside limit of 10 Bcf per day.  Others think the number could be substantially less than that.  Certainly, once projects obtain regulatory approval, the competition globally for LNG supplies and the availability of capital investments for these types of projects will be limiting factors.  Not all projects approved will likely be built.  Not all projects built will likely operate at full load capacity. 

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The Department of Energy (DOE), should not inject its own views of what the level of exports should be. Government does not have a particularly strong record in substituting its judgment for what are inherently market-driven decisions.  Instead, DOE should follow the statute, its rules, policies and precedence to make these decisions.  By upholding the statutory presumption that these applications for export should be approved and without evidence from the opponents of the applications to the contrary, DOE needs to approve the pending applications.  The market is far more efficient and a better arbiter of which projects will succeed or fail than a regulator ever could be.     

Who do you most admire in the world of energy?

Over the years, I have come to appreciate the fact that there are innumerable people who have made profound and lasting impacts on the natural gas industry.  There are those who operate in the shorter term, securing drilling deals and finding production, and then move onto the next venture.  Then, there are those who bring scale and longevity to projects resulting in benefits to generations of consumers.  From the rig floor to the executive suite, people work tirelessly with persistence, perspiration and passion to make the oil and natural gas industry the best, most innovative industry in world.  It would be difficult to single out one individual.    

What is your biggest concern regarding the future of LNG exports?

My biggest concern regarding the future of LNG exports from the United States is whether the Department of Energy will make decisions on the pending applications or whether it will allow those decisions to be made by attrition.  Continuing delays in deciding the applications pending before the DOE creates regulatory uncertainty and undermines billions of dollars of waiting investments.

Potential buyers of U.S. LNG, including America’s closest allies, are in need of energy supplies, and cannot be expected to wait for DOE to make decisions on the pending applications when DOE will not even publicly disclose a timeline for making those decisions.  When pressed against the wall on supplying their own customers, those buyers will seek supplies elsewhere in the world.  A timely response from DOE will ensure the United States will gain the investments and the opportunity to create thousands of jobs.

Do you consider natural gas to be the end solution, or do you consider it a bridge fuel?

I generally do not like to discuss the role of natural gas in terms of catch phrases like those.  To discuss natural gas as a “bridge fuel” suggests that natural gas is an inferior fuel source that needs to be phased out, a notion to which I vehemently disagree.

To say that natural gas is the “end solution” suggests that there is no need to be forward thinking in ways to bring cost-effective innovations to the energy market.  The way I prefer to say it is that natural gas provides a reliable, affordable, safe, and environmentally responsible fuel for millions of Americans with a wide variety of applications and will continue to do so until somebody figures out another fuel source that can improve on natural gas’ track record.  Personally, I think it will take a while.

Do you have a favorite motto or saying?

“Outside his own territory, the hunter becomes the hunted.”

Huge thanks to Bill for his forthright answers. He also just testified before the House Energy Commerce Subcommittee about pending LNG applications. You can see what he said here. As always, thanks all for playing!

By. Matt Smith

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