December 26, 2022 [Financial Post] – The U.S. Energy Department on Tuesday approved permits for Sempra Energy to send U.S. natural gas to Mexico for re-export from LNG terminals, which a source said led a Republican senator to lift holds on four Biden administration nominees.
The permits allow Sempra to ship natural gas via pipeline to western Mexico in coming years where it will be converted to liquefied natural gas at the company’s terminals and sent to consumers in Asia and other markets.
The LNG will be exported from Sempra terminals Energy Costa Azul – which is being built in two phases, the first of which is expected to be completed in mid-2025 – and Vista Pacifico, which has not yet begun construction.
The department allows Sempra to export an LNG equivalent of 475 billion cubic feet per year of gas from the proposed Costa Azul facility, and 200 bcf a year from Vista Pacifico.
Proponents of natural gas have been pressuring President Joe Biden’s administration to quickly boost export permits for the fuel after the Feb. 24 invasion of Ukraine by Russia, the world’s biggest exporter of fossil fuels.
While the permits will do nothing this year to help Europe while it faces an energy crisis, they will add alternatives to LNG from Russia for consumers, particularly in Asia.
Senator Ted Cruz, a Texas Republican who has been pressuring the Biden administration to approve LNG permits, had been blocking confirmation of four Biden energy department nominees. A congressional source said Cruz immediately lifted his holds on those nominees after the permits were approved.
The nominees included David Crane, a former chief executive of NRG Energy as under secretary for infrastructure, and Jeffrey Marootian for assistant secretary for energy efficiency and renewable energy. Cruz said the approval of export permits was a “long overdue win” for Texas and the United States.
Many environmentalists oppose LNG development saying the world should move faster off fossil fuels and invest more in wind, solar power and geothermal energy.
The Energy Department concluded in the approvals that emissions from marine transport of LNG from Costa Azul would reduce emissions between 4%-8% compared to a similar plant in the U.S. Gulf Coast, “due to the shorter tanker travel route from Mexico to markets in Asia,” a route that avoids the Panama Canal.
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