The Biden administration’s recently announced decision to pause further action on new LNG export permits for at least several months sent shockwaves through the industry and shook up expectations regarding which projects will be hurt by — or benefit from — the pause. As we’ll discuss in today’s RBN blog, the decision is likely to put a number of Gulf Coast LNG export projects (one of them a real giant) in limbo, set back a Mexican project that would depend on Permian and Eagle Ford gas, and boost a couple of projects up in Canada. Oh, and there’s this: The pause also may help two avowed enemies of the U.S.: Russia and Iran.
We should begin by emphasizing that getting an LNG export project sanctioned, financed and built is no easy feat. These projects are capital-intensive, typically costing many billions of dollars each, and almost always depend on commitments from large, creditworthy offtakers to purchase mammoth volumes of LNG over a period of 15 or, more often, 20 years. Like highly competitive applicants for a top-tier corporate job, developers of LNG export projects need to convince potential offtakers and investors that their planned facilities best meet the criteria that everyone’s looking for, including feedgas availability, pipeline connectivity, counterparty risk and technologies. The competition among projects has been — and remains — fierce.
One essential factor that developers of LNG export projects had long taken for granted was their ability to eventually secure federal permits to export U.S. natural gas. As we said recently in Take Five, every U.S., Mexican or Canadian project that plans to export U.S.-sourced gas as LNG requires export licenses from the Department of Energy (DOE). The licenses come in two flavors, one for sales to Free Trade Agreement (FTA) countries and one for non-Free Trade Agreement (non-FTA) countries, and typically allow for exports to continue through 2050. Projects need both licenses to export competitively — they are usually granted in that order (FTA first, then non-FTA) — and both typically come after a project has already received its Federal Energy Regulatory Commission (FERC) authorization. (Figure 1 shows the FTA and non-FTA countries that imported U.S. LNG in 2023 — light-blue- and gold-shaded countries, respectively.)
Figure 1. FTA and Non-FTA Countries That Bought U.S. LNG in 2023. Source: RBN’s LNG Voyager
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About the song
“How Do You Like Me Now?!” was written by Toby Keith and Chuck Cannon. It appears as the first song on Toby Keith’s fifth studio album of the same name. Released as the second single from the album in November 1999, it went to #1 on the Billboard Hot Country Songs chart and #31 on the Billboard Hot 100 Singles chart. It has been certified 2x Platinum by the Recording Industry Association of America. The song was parodied in 2000 by country music humorist Cledus T. Judge with “How Do You Milk a Cow.” Personnel on the record were: Toby Keith (lead vocals), Larry Byrom (acoustic guitar), Jerry McPherson (electric guitar), Brent Mason (electric guitar solo), Dan Dugmore (pedal steel guitar), Clayton Ivey (organ), Glenn Worf (bass), Owen Hale (drums), and John Wesley Ryles, Curtis Young (background vocals).
The album, How Do You Like Me Now?!, was recorded in Nashville in 1999 for Dreamworks Records and produced by James Stroud and Toby Keith. Released in November 1999, it went to #9 on the Billboard Top Country Albums chart and #56 on the Billboard 200 Albums chart. Four singles were released from the LP.
Toby Keith (Toby Keith Corel) was an American country music singer, songwriter, record producer, and actor. He formed his first country music band, Easy Money, with friends from high school. While working in oil fields in Oklahoma and attempting a career in semi-pro football as a defensive end with the Oklahoma City Drillers, he started focusing more on playing music with Easy Money in honky-tonk bars across Oklahoma and Texas. He signed his first recording contract with Harold Shedd and Mercury Records in Nashville in 1993. He has released 21 studio albums, seven compilation albums, and 69 singles and has won 12 ACM Awards, two CMA Awards, three American Music Awards, and was awarded a National Medal of Honor in 2021. Toby Keith died February 5 after a long battle with stomach cancer at the age of 62. We at RBN offer our condolences to his family, friends, and fans.
