Japan’s Push for US LNG

The global market remains the great opportunity for U.S. natural gas producers .  More reason for moving swiftly to allow increased exports of liquid natural gas (LNG) came from Japan’s new Prime Minister.

Very recently Prime Minister Abe of Japan visited Washington and spoke with President Obama.  The Financial Times reported the Japanese Prime Minister’s request that the US permit increased LNG exports to Japan.  Prime Minister Abe also announced US $10.9B in credit guarantees to fund investments by Japanese companies in shale gas projects.

The Prime Minister’s request for the U.S. to permit additional exports of LNG and his commitment to credit guarantees reinforces the potential for the U.S. to benefit from its natural gas supply.   That potential includes the positive environmental impact of natural gas. It is evident that global demand for natural gas is expanding, especially in the face of the advantages of natural gas for power generation.  This relatively cleaner fuel reduces atmospheric carbon, and it addresses the risks that many countries like Japan and Germany feel from nuclear-fueled energy production.

Studies show that LNG exports will also greatly benefit the U.S. economy.  The increased demand for U.S. natural gas will spur very considerable job growth It also does so from the potential improvement in our total exports and our net balance of trade.  But that positive impact of U.S. natural gas depends upon the government’s approval of applications from companies working to export natural gas via specially designed terminals that use LNG.

It is necessary for the Department of Energy (DoE) to approve LNG export permits so that we can take advantage of the demand.  Penley on Education and Energy recently reported on Senate hearings related to LNG and natural gas.  Those hearings raised the spectre of possible limitations to applications for export and seemingly futile attempts to “protect” the U.S. from the impact of the global economy on domestic energy prices.

What is needed now is for the DoE to move swiftly to allow Japan and other countries to buy American natural gas via increased LNG exports.  As this blog has observed in the past, the energy industry is global.  Natural gas is available from other countries and regions of the world other than North America, and if we don’t act now, we will miss  an opportunity to further improve our economy.  We should do so.


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