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2005 Policy Positions
of the Southern Legislative Conference

8. POLICY POSITION IN SUPPORT OF LIQUEFIED NATURAL GAS (LNG) RECEIVING TERMINALS


BACKGROUND

Many states in the southeastern United States include some of the largest consumers of natural gas in the nation and the largest exporters of natural gas to other states in the nation.  Almost 60 percent of the homes in the United States use natural gas for home heating, water heating, and cooking purposes.  A considerable amount of power generation in the South has been fueled historically by natural gas, and when natural gas prices increase, so too do electricity prices in the region. More than 85 percent of all new power generation facilities developed within the past five years are fueled by natural gas.  The Gulf of Mexico and its surrounding southeastern states have historically provided abundant and cheap supplies of natural gas, the most environmentally friendly fuel, to the rest of the nation.

Our country’s lack of access to adequate supplies of natural gas is a threat to our economy, and has been underscored repeatedly by Federal Reserve Chairman Alan Greenspan in speeches and testimony before the Congress of the United States. Current natural gas prices and insufficient supply have been extremely detrimental to industries based in the South, particularly in the chemical sector. These severely impacted industries provide high paying jobs to many citizens in the South and high natural gas prices are threatening the exportation of those jobs to other countries around the world.  Analysts expect continued high natural gas prices, and liquefied natural gas (LNG) imports have the potential to reduce and stabilize natural gas prices. Lower natural gas prices will create and retain important manufacturing jobs throughout the South.

Two of the original LNG receiving terminals were developed and have been successfully operated without safety or environmental incidents in the South (Elba Island, Georgia and Lake Charles, Louisiana) for several decades. It is necessary to develop LNG receiving terminals in the South in order to maintain our existing natural gas infrastructure and maintain a healthy business and industrial environment that depends on abundant natural gas supplies.  It is necessary to develop LNG receiving terminals to ensure that households have access to low-cost natural gas resources for home heating and cooking purposes, and to ensure that their electricity generated by natural gas is provided at an affordable cost.  The development of LNG receiving terminals in the South will benefit its citizens as well as the citizens of the entire United States.

RECOMMENDATION

The Southern Legislative Conference of The Council of State Governments (SLC) urges all state and federal regulators to expeditiously consider, approve, and permit applications for LNG receiving terminals throughout the country, taking into consideration the potential environmental impacts associated with certain types of open loop re-vaporization systems and balancing the potential impacts of these systems against the need for new supplies of natural gas in a manner that is efficient and environmentally responsible.  The SLC shall forward copies of this policy position to all appropriate  federal regulators, including the Federal Energy Regulatory Commission, and to all members of the SLC’s congressional delegation.

 

Adopted by the Southern Legislative Conference, August 2, 2005, Mobile, Alabama.

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