The COVID-19 pandemic has suppressed demand for energy around the world, and the United States is producing a lot of natural gas that doesn’t have anywhere to go.
Last year saw massive investment in liquified natural gas facilities, but that expansion has come to a grinding halt. The price of natural gas is at historic lows, so the plans to expand existing liquified natural gas terminals and build more in the U.S. have been put on hold.
“They may not be put off forever — some just a couple years, some maybe a bit longer,” said Joshua Rhodes, research associate at the University of Texas Energy Institute.
Rhodes said that could hurt workers in places like the Gulf Coast of Texas and Louisiana.
“As that process stops, you’re going to have less need for construction workers; you’re gonna have less need for the engineers and the overseers on those projects,” Rhodes said.
And beyond the stalled projects, Rhodes said reduced LNG exports mean less work for those who already have jobs in natural gas. Because building facilities requires a huge capital investment, they have to remain active for a while, according to Nikos Tsafos, a senior fellow with the Energy Security and Climate Change Program at the Center for Strategic and International Studies.
“The thing about LNG projects is they have a long time horizon,” he said. “They take about five years to build, and they stay online for 20 plus years.”
Tsafos said that means energy companies have to assume we’ll be consuming natural gas for decades, despite accelerating climate change concerns.
COVID-19 Economy FAQs
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
How long will it be until the economy is back to normal?
It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.
How are those COVID relief payments affecting consumers?
Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.
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