Pandemic puts natural gas projects on hold
The COVID-19 pandemic has suppressed demand for energy around the world, and the United States is producing a lot of natural gas that doesn’t have anywhere to go.
Last year saw massive investment in liquified natural gas facilities, but that expansion has come to a grinding halt. The price of natural gas is at historic lows, so the plans to expand existing liquified natural gas terminals and build more in the U.S. have been put on hold.
“They may not be put off forever — some just a couple years, some maybe a bit longer,” said Joshua Rhodes, research associate at the University of Texas Energy Institute.
Rhodes said that could hurt workers in places like the Gulf Coast of Texas and Louisiana.
“As that process stops, you’re going to have less need for construction workers; you’re gonna have less need for the engineers and the overseers on those projects,” Rhodes said.
And beyond the stalled projects, Rhodes said reduced LNG exports mean less work for those who already have jobs in natural gas. Because building facilities requires a huge capital investment, they have to remain active for a while, according to Nikos Tsafos, a senior fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies.
“The thing about LNG projects is they have a long time horizon,” he said. “They take about five years to build, and they stay online for 20 plus years.”
Tsafos said that means energy companies have to assume we’ll be consuming natural gas for decades, despite accelerating climate change concerns.
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