Advertisements

Africa Oil & Gas: US trying to sell natural gas to “shithole” countries

trump-budget-01-as-180119_3x2_992.jpgUS President Donald Trump’s vulgar commentary could be the undermining of the administration’s goal of becoming, in the words of Trump officials, an “energy dominant” country. Trump’s disparaging label could jeopardize a burgeoning effort to sell U.S. natural gas to developing countries, including those in Africa.

The Trump administration has dispatched its top energy and environmental officials to woo potential buyers of U.S. energy in Africa, a continent home to the “shithole” countries that Trump wants to prevent from sending their citizens to the United States, according to remarks in his meeting last week with lawmakers.

Last month, Environmental Protection Agency chief Scott Pruitt and a crew of aides spent four days in Morocco to promote the potential sale of U.S. natural gas there. In October, Energy Secretary Rick Perry attended a natural gas development workshop in South Africa.

“We want to be your partner,” Perry said, noting that the United States could “export not only LNG but also the technology and infrastructure to build gas economies across Africa.”

(Perry’s reflections on his African trip upon returning home got more attention. In November, the energy secretary suggested fossil fuels help prevent sexual assault in impoverished countries.)

The rationale undergirding much of the Trump administration’s deregulatory efforts – whether it be opening public lands to coal leasing or oceans to oil drilling – is to bring more domestic fuel above ground and sell it abroad. The goal is, in short, to make the United States a net energy exporter.

Among the fuels the Trump administration wants to facilitate is the sale of liquefied natural gas (LNG).

As part of this effort, high-ranking administration officials have been pitching U.S. gas to energy-thirsty customers in South Korea, Japan, Eastern Europe – and other nations in Africa. And some observers say the president’s words can’t help but hurt this effort.

But Victor added, “The role of government in blessing or pushing these things – especially in market-oriented economies like the United States – is easy to overstate.”

As economies in Africa develop, natural gas consumption is growing by more than 3 percent per year, the International Energy Agency reported last year. Trading gas across oceans – which involves cooling the fuel in specialized tankers before unloading it through expensive import terminals able to convert the fuel from a liquid to gas – takes more intergovernmental cooperation than the average overseas transaction.

Meanwhile, the United States, which once was a key customer of natural gas from Nigeria and elsewhere in Africa, has a natural gas bounty after the boom in hydraulic fracturing over the past decade.

Beginning under President Barack Obama and continuing under Trump, natural gas producers received a steady stream of approvals for the construction of natural gas terminals to sell their product abroad. In February 2016, Houston-based Cheniere Energy began shipping gas out of Louisiana. Between then and November 2017, a small percentage – 1.3 percent – of the liquefied natural gas that left the United States went to one African country, Egypt, according to an Energy Department report.

Since Trump took office, his administration has found buyers in Lithuania and Poland, eager to get out from under the yoke of their traditional fuel supplier, Russia. But in Africa, the head winds of energy economics – rather than any blowback after the “shithole” brouhaha – may stifle similar sales.

“I am not sure how well placed the U.S. might be to fill that market,” Antony Goldman, an independent energy analyst, said of Africa, “not so much because of the ‘shithole’ remark but because of cold hard logic.”

“You look at China. You look at India,” said Charlie Riedl, executive director of the Center for Liquefied Natural Gas, a lobbying group. “Those are two large, massive potential import countries.”

Furthermore, Africa has long had oil and gas reserves of its own. It is probably cheaper for South Africa, the continent’s third-largest economy, to build pipelines to gas fields to the north in Mozambique than it is to import gas by tanker, Goldman said. Similarly, Morocco could get gas from its North African neighbors.

And more recent discoveries in East Africa mean that even Egypt may seek gas closer to home.

“The ability to produce gas at a much closer market is very real in Africa,” Riedl said.

So despite the gestures (whether obscene or obliging) from Trump or his deputies, “the need to import U.S. LNG is probably pretty unlikely,” he said.(source:Washingtonpost)

Advertisements

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: