Protecting Texas LNG: Key Legislative Findings and Future Recommendations

The House Select Committee on Protecting Texas LNG Exports has published an interim report to the 89th Texas Legislature, detailing the impact of federal actions on Texas’ LNG industry and recommending strategies to mitigate these effects. The report highlights the following key findings and recommendations:

Committee Formation

On March 25, 2024, Texas House Speaker Dade Phelan (R-Beaumont) created the House Select Committee on Protecting Texas LNG Exports. The committee was formed in large part as a response to U.S. President Joe Biden announcing a temporary pause on new approvals of liquefied natural gas (LNG) exports to countries without a Free Trade Agreement (FTA) with the United States on January 26, 2024. The committee, comprised of five state representatives, includes:

The committee was charged with analyzing the applicable legal authorities under which federal action was taken ___, assess the potential economic, environmental, and social impacts of such federal action on the state, and identify strategies to mitigate all adverse effects on the LNG industry, Texas’s energy sector, and the state’s economy as a whole.

The committee held a public hearing in Port Arthur, Texas on May 2, 2024 comprised of both public and invited testimony from various individuals and organizations.

Legislative Findings

The report (seen below), released May 13, 2024, provides several key legislative findings. The following is a summary of those findings:

  • Legal Authorities:
    • Natural Gas Act of 1938: The Department of Energy (DOE) regulates LNG exports, with the Federal Energy Regulatory Commission (FERC) overseeing the infrastructure.
    • Administrative Procedures Act of 1946: Establishes procedural rules for federal agencies, ensuring transparency and fairness in rulemaking and adjudication processes.
  • Economic, Environmental, and Social Impacts:
    • Economic: Texas’ LNG industry significantly contributes to the state’s economy, with natural gas production supporting thousands of jobs and generating substantial tax revenue. The Biden Administration’s pause on new LNG export approvals threatens future investments and economic growth.
    • Environmental: LNG is a cleaner alternative to coal and oil, contributing to global emissions reduction. However, concerns about the environmental impacts of LNG production and transportation persist.
    • Social:
      • Globally: U.S. LNG exports have bolstered energy security in Europe, reducing reliance on Russian gas.
      • Regionally: LNG facilities support local economies through job creation and investments in community infrastructure and education.

Legislative Recommendations

  • Establish the Gulf Coast LNG Interstate Compact: Develop an interstate compact to share resources and protect the LNG industry along the Gulf Coast.
  • Issue Annual Public Interest Reports: Mandate annual reports detailing the economic, environmental, and social benefits of LNG exportation to address public interest concerns.
  • Allow Temporary Facility Construction Grants: Provide state funding to continue LNG construction projects during federal permitting pauses.
  • Economically Incentivize the LNG Industry: Introduce economic incentives to sustain the LNG industry through federal permitting pauses.
  • Reform State Permitting Regulations: Streamline state permitting processes to increase efficiency and reduce delays in LNG project approvals.
  • Increase Funding for Maritime Infrastructure: Expand funding for maritime infrastructure projects to support the LNG industry.
  • Prioritize Regional Industry Workforce Grants: Enhance workforce development grants to meet the demands of LNG facility construction and operations.

What This Means for the Coming Legislative Session

The 89th Legislative Session, set to begin in January 2025, will likely address many findings in this interim report, potentially including specific appropriations for many of the issues described.

Conclusion

The report emphasizes the critical role of Texas’ LNG industry in the state’s economy and global energy markets. The recommendations aim to mitigate the adverse effects of federal actions and ensure the continued growth and success of the LNG sector in Texas.

Texas Policy Research relies on the support of generous donors across Texas. If you found this information helpful, please consider supporting our efforts! Thank you!