According to Dustin Meyer, Senior VP of policy, economics and regulatory affairs with API, the need for robust permitting reform in the U.S. is a widely acknowledged necessity throughout the industry.
Likewise, he also believes that much of the industry’s gas conversation is focused on European markets — and justifiably so.
One of the indirect consequences of 2022 is that a couple of emerging importers with huge energy poverty and access issues like Bangladesh and Pakistan indicated they couldn’t afford gas at those prices, and they reverted back to coal.
"That makes all the sense in the world, but it is important to remember what a departure that was on the global side of the norm before that — which was the recognition that Asia was the primary driver," Meyer said. "I do get a little concerned that in this focus on Europe, the Asian experience is forgotten."
Policy, global energy poverty drive API’s role in LNG
Dustin Meyer, VP of natural gas markets with API. Photo courtesy CERAWeek by S&P Global
"Obviously, China is undergoing a somewhat similar experience," Meyer said. "It’s important for us to remember just how important it is to have abundant gas out on the global marketplace."
Speaking on a panel focusing on the changing strategies of North American gas during CERAWeek by S&P Global, held in Houston, Meyer suggested that members of G7, an intergovernmental political forum, be reminded that energy security and the role of natural gas and bolstering energy security be part of the organization’s agenda.
"When you’re talking about global natural gas, we all know this is a long-term relationship and policy business, especially on the import side. Given that customers are pretty closely connected to other countries and governments, words really matter here," he said. "Sending clear signals to the marketplace that gas really does have this role is going to be important to securing that level of investment in capacity and that we have the permitting processes in place to meet the demand that we see out there."
Meyer noted the high level of enthusiasm throughout the industry supporting certain provisions of President Biden’s Inflation Reduction Act (IRA), especially 45Q as it pertains to carbon capture technology, and 45B as it pertains to hydrogen development.
Section 45Q provides a tax credit for CO2 storage, intended to incentivize carbon capture utilization and storage. It provides up to $85 per ton of CO2 used for enhanced oil recovery or other industrial uses of CO2. Section 45B provides a renewable electricity production credit for sales of electricity produced by wind, closed-loop biomass, geothermal energy and solar energy by qualified facilities placed in service after December 31, 2021.
"We support each of these provisions and we think it makes sense for these emerging low-carbon technologies to have additional policy support to accelerate their development," Meyer said. He added that now that the IRA has been passed, API is currently in the process of getting into the -‘devilish details’ of the act.
"In Washington D.C., that takes the form of implementation guidance. The IRS, to a certain extent, is in the process of analyzing the more detailed approach to how these companies and operators out there actually take advantage of these various tax credits," Meyer explained. "From API’s perspective, as an industry we feel that it’s important that these implementation guidelines — the true purpose of the Inflation Reduction Act — is taken into account, which is to accelerate and foster innovation and development of these new technologies. Again, trying to be consistent with that, we think that guidance needs to be technology-neutral, very flexible and allowed a broader participation to make sure that we can really get the amount of momentum that we need to develop these technologies over the next decade."
