The Trump administration recently touted its approval of America’s first terminal on the West Coast to export liquefied natural gas. There’s just one problem: It probably won’t be built.
Why it matters: The project in southern Oregon faces political and business hurdles serious enough that those who are following it say it will be shelved. Its problems embody the struggles facing a once-promising sector that's now struggling under the weight of the pandemic and more.
What they’re saying: “It’s not going to be built,” Sen. Jeff Merkley (D-Ore.) told Axios in a recent interview. “I’ve talked to a whole number of folks — several people who have been deeply involved in international finance of energy projects — and they don’t believe that the company can lock down the sales needed to justify the $6 billion investment.”
- He declined to share who he has spoken with, but independent analysts agree with that general assessment.
- “The circumstances around Jordan Cove have materially changed and the advancement of this project seems unlikely,” says Rob Rains, senior energy analyst at Washington Analysis.
For the record: The company behind Jordan Cove, Canada-based Pembina Pipeline Corporation, declined to comment. It will provide an update on the project during its second-quarter earnings call with investors this Friday.
Catch up fast: In early July, Energy Secretary Dan Brouillette announced a key federal approval of the project.
- At that time, Brouillette said it “encapsulates what the Trump administration has been working hard on for the past three years — providing reliable, affordable, and cleaner-burning natural gas to our allies around the world.”
The big picture: With America becoming the world’s biggest producer of oil and natural gas, companies have raced to build massive, multibillion-dollar facilities to liquefy and ship natural gas all over the world.
- Several have begun operating in recent years, leading to a boom in LNG exports. But more than a dozen projects are still either awaiting government approval or not yet complete, according to government data.
- Trump’s ongoing trade war with China (a huge market for the fuel) — together with the pandemic, which is sapping global energy demand — is creating a one-two punch that has deflated a sector that was promising just a couple years ago.
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