The ongoing pause on liquefied natural gas (LNG) export projects continues to raise alarm among Texas’ business community and is a direct and disastrous threat to the Lone Star State’s economy. Texas has long been a global leader in energy production, consistently ranking as the top state for LNG exports in the United States. Our LNG sector is not just a significant revenue generator and job creator; it's a cornerstone of our state's economic success and a key player in maintaining national and statewide energy security.
The current administration’s decision to ‘pause’ on LNG gas exports is severely damaging our economic interests and weakens Texas' prominent role in the energy sector, which has been built on our strategy of utilizing all available energy sources to create a diversified portfolio. This pause creates uncertainty for numerous projects in the pipeline, with potentially enormous trickle-down effects for the entire state.
Furthermore, this pause is undeniably harmful to the environment. The decrease in LNG exports, if sustained, will inevitably lead to increased reliance on coal for energy production. Coal is by far the most polluting fossil fuel, releasing far higher emissions than natural gas, making the Biden administration’s pause on LNG exports environmentally reckless.
It's important to understand that the LNG industry doesn't exist in isolation – it supports a vast network of suppliers, service providers, and ancillary businesses throughout Texas. When LNG exports are restricted, the impact ripples through our entire economy, affecting jobs, tax revenues, and overall economic growth.
The implications of this pause extend far beyond our state borders, touching on issues of national security and international diplomacy. A recent Wall Street Journal article highlighted that no fewer than a dozen House Democrats are urging the Administration to expedite LNG projects, recognizing their importance for both domestic interests and international allies. These representatives emphasized that "Any delays to providing additional supplies of LNG to Ukraine and our Eastern European allies could jeopardize European energy security and market stability in the long-term."
Moreover, the pause on LNG exports puts the United States at risk of losing its competitive edge in the global energy market, while simultaneously benefitting our adversaries. Countries like Iran, Russia and Qatar are seizing the opportunity to expand their LNG export capabilities, potentially capturing market share that could have belonged to Texas and other U.S. producers. For example, Qatar is attempting to position itself to control about a quarter of all liquefied natural gas by the end of the decade, which would introduce another player into an already competitive market.
Despite the current turbulence affecting our state’s energy sector, one thing remains constant— the meaningful impact the Texas oil and natural gas industry has in the success of our state’s education system. The Texas oil and natural gas industry paid $26.3 billion in state and local taxes and state royalties in fiscal year 2023, which surpassed 2022’s fiscal year record by more than $1.5 billion, making it the highest total in our state’s history.
The oil and gas industry also pours billions of dollars towards integral sectors, such as public education for K-12 students and higher education, including the Permanent School Fund and the Permanent University Fund, which support Texas public education, 21 institutions and six agencies in the University of Texas System and the Texas A&M University System.
These industries also contribute substantially to our state’s Economic Stabilization (ESF) or ‘Rainy Day’ Fund, which has become one of the largest state savings funds in the nation due to taxes and state royalties paid by the Texas oil and natural gas industry. Since its inception in 1987, the ESF has received over $31.2 billion from those specific industries’ production taxes.
The Texas Association of Business strongly advocates for the swift resumption of LNG export project approvals. We commend Representative August Pfluger's recent efforts to ensure this happens, and we look forward to hosting him at TAB on Monday. Congressman Pfluger, in collaboration with the House Energy Action Team (HEAT) and the House Energy Export Caucus, has been at the forefront of urging the Biden-Harris administration to resume approving these crucial permits.
This push has gained momentum following a federal judge's ruling in Louisiana against the administration's ban on new permits. The court sided with Texas, Louisiana, and 14 other states challenging the LNG export permitting freeze. While this legal victory marks a significant step forward, it is imperative that the administration formally acknowledges the ruling and definitively ends the pause.
This isn't just about maintaining the status quo – it's about securing our state and nation’s position as frontrunners in the energy sector. The LNG export situation affects Texas' economic future, America’s national security and our role in supporting our global allies. We're not just fighting for the energy sector – we're fighting for policies that will maintain Texas's position as an economic powerhouse and a leader in reliable, robust energy production.
- Glenn Hamer, TAB President & CEO
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