President's Blog

May 02, 2018


Local LNG projects may be impacted by President Trump’s tariff battle with China. As companies look at the bid packages coming in to start some of the coastal LNG projects any cost increases for any reason could cause them to take a closer look at the bottom line. Steel is a major cost item in the building of these projects and if the tariff tiff causes a significant price increase it could be a reason for concern. The LNG business along the Texas and Louisiana Gulf Coast will have a tremendous economical impact in Texas and the United States.

In a recent report, conducted by ICF Inc., using the most current U.S. Energy Information Administration (EIA) data based on three cases in their 2018 Annual Energy Outlook (AEO) released in Feb. 2018. The three cases include the Reference Case, the High Oil & Gas Case, and the High Oil Price Case. Key findings from the new ICF study include the direct, indirect, and induced value added from 2013 to 2050 for the three AEO cases:

  • The cumulative economic impact from LNG plants will range from $716 billion to $1.267 trillion.
  • LNG plants would support 2 million to 3.9 million job-years.
  • Considering the whole value chain (LNG and natural gas supply) the cumulative economic benefits from U.S. LNG exports would range from $1.664 trillion to $3.255 trillion.

"U.S. LNG exports are driving the transformation of the international gas trade to an increasingly well-connected global market," said LNG Allies President & CEO Fred H. Hutchison. He added, "This updated report shows LNG exports also provide important economic benefits to the United States, by stimulating job creation, increased economic activity, and tax revenues."

As I stated in last month’s article any change in tax laws, whether its State, Federal, County or City causes a ripple effect through any planned new facilities or expansion of existing facilities. Although most of the companies in the area are well funded we are talking billions of dollars. That is a significant investment for any group. Many area companies have added partners in an effort to secure the cash needed for these expansions or new projects.

I understand the need to insure we are being treated fairly by our trade partners and I’m hoping the President is simply rattling tariff sabers to get a better trade deal for us. I would hate to see some of our locally based LNG companies delay their projects because the cost of construction escalated beyond what they are willing to invest.

To educate state elected officials the Beaumont, Orange and Port Arthur Chambers hosted 40 elected legislative officials and members of their staff for a tour of the Neches. The purpose was to spotlight the economic importance of our ship channel to Texas and the United States. We are hoping the three-day event will cause our state officials to help get the necessary funding to deepen the ship channel. Funds for this event were provided by local industries and interested agencies involved with our shipping industry. The trip included a reception at the Port of Beaumont and the Orange Airport. Those participating were also treated to a boat ride from the Port of Beaumont to the Port of Sabine Pass, a trip to Sea Rim Park and various sessions covering the economy of our area.

To continue our relationships with our elected state officials plans for Golden Triangle Days in Austin are already underway. We have secured a block of rooms, several meeting sites and transportation while in Austin. The dates for the 2019 event are February 11and 12. These two days are a change from previous years. The event will be arriving on Monday, events on Tuesday and return home on Wednesday. We will have more on this event in the coming months.  

If you want to be part of a business organization that is making a difference in our community, call Paige Snyder at 409-963-1107 extension 3.


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