Emphasizing the critical significance of regulatory certainty for growth within the energy transition sector, Alder Midstream’s senior leadership underscores the company’s commitment to working through regulatory challenges.
As the senior VP of Commercial for Alder Midstream, Vince Morrissette represents Alder’s subsidiary, a 4 million mt/yr Texas LNG export facility slated for construction this year at the Port of Brownsville in Texas, with commercial operations commencing in 2028.
The company also has the 8.8 million mt/yr Magnolia LNG export project under development, located on the Industrial Canal near Lake Charles, Louisiana.
In January, President Biden paused approvals for new U.S. LNG export project applications after protests about the booming industry from activists concerned about the impact on climate change.
Morrissette said the company’s Magnolia LNG project fell directly within that pause, and a permit for the project expired in November. Per recommendations from the DOE, a new application was filed, he explained.
"Our Texas LNG project has a valid permit, but we likely won’t be in service at the expected date," he said, reiterating that his biggest concern in realizing the company’s potential is regulatory certainty.
Alder Midstream: Regulatory stability crucial for advancing U.S. energy transition
From left are Amanda Duhon with Energy Industries Council, Vince Morrissette with Alder Midstream, Anusha de Silva with S&P Global and James Campos with the state of Virginia.
Morrissette spoke on a panel during the 5th American LNG Forum in Houston. He said the Texas LNG and Magnolia LNG projects are feeling the effects of the Biden administration’s pause on current and former LNG applications.
Morrissette predicts that if the current administration remains in power, uncertainty will persist. He said if the moratorium is lifted, it’s not clear how the administration would evaluate projects, nor is it clear what the additional criteria might be. "And if we change administrations, you could certainly see an immediate change as a kind of political decision similar to the Keystone Pipeline when President Biden came into office. I don’t see a clear path forward."
Morrissette said the delays are costing companies either way.
"It really just depends on where you are with your project — for the ones that have had a significant percentage of their capacity sold and now are in the pause — they risk losing those customers and potentially risk not achieving approval and moving forward, which is why it’s hard to put a dollar amount on that," Morrissette said. "You’ve got carrying costs, you’ve got your internal costs. But it’s really difficult to estimate because it can be anything from a one-year delay to two, and you completely lose your project as a result."
Despite the pause on applications, Morrissette said he’s cautiously optimistic that Alder Midstream will be granted an extension once the Magnolia LNG permit expires.
"We won’t know that until you go to the banks for financing. And you’ve got to convince the customers that you’re going to get that extension," he said.
Morrissette said a key component to moving forward through obstacles in regulations and a pause in applications is educating the public about the benefits of LNG.
"You’re allowing for that transition and you’re providing for that transition in a lot of markets. It’s going to be delayed beyond where we are today here in the U.S. or where Europe or Asia is because they simply can’t do it efficiently and affordably," he said. "I think that’s the opportunity for us. That’s why I’ve been in LNG for quite some time now. And that’s why I’m a big believer in it. We need to educate the public more and make them aware of the benefits that it’s providing to all these markets overseas. And really, in how LNG and natural gas and hydrocarbons are used."
