By Carey L. Biron 

WASHINGTON, Feb 5 (Thomson Reuters Foundation) - The U.S. government decision last week to pause new gas-export permits will not remove the massive facility retired oil and gas worker John Allaire sees from his Louisiana property, but it will at least likely halt the plant's planned tripling in size.

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The export terminal is one of several built in the rural, sparsely populated coastal area over the past decade that have transformed the local economy, but also led to rising protests and unease among residents worried about the environment.

"Given the jobs, people are ... waiting to see what's going on. But when they see the pollution and flaring that's occurring on an almost daily basis – they see what's happening," said Allaire.

The United States last year overtook Qatar as the world's largest gas exporter. That stands at odds with its pledge at last year's COP28 U.N. climate talks to transition "away from fossil fuels in energy systems, in a just, orderly and equitable manner."

Seven U.S. gas export terminals are now in operation, with five more set to soon come online, largely in Louisiana and Texas.

TRANSITION CHALLENGES

The gas export terminal near Allaire's property opened in 2022 and today offers a view of hulking storage tanks, gas flares emitting from stacks and marine tankers coming and going.

The arrival of the liquid natural gas (LNG) industry around 2015 was seen as a "savior" for the area's dying offshore oil and gas drilling, Allaire said, but since then it has cut off local access to the sea and dried up tourism.

The administration's new temporary freeze, which the government will use to study the sector and its economic and environmental impacts, will affect only facilities that have yet to be permitted.

The decision has been applauded by residents such as Allaire, as well as national climate campaigners. But it has also sparked concerns over the potential effect on local economies and workers – and whether there is enough support for communities through a "just transition" from fossil fuel production.

"How are we not thinking about entire communities dependent on these industries and how we should support them?" asked Devashree Saha, director of the U.S. Clean Energy Economy Program at the World Resources Institute think-tank.

"Policymakers and researchers have focused attention on the transition challenges faced by workers and communities after a coal plant or a coal mine closes. But far less attention has been paid to the oil and gas sector," she said.

The White House did not respond to requests for comment on the local implications of the LNG export pause, or on what the coming study would entail.

ECONOMIC 'GUT PUNCH'

As U.S. gas exports rise, southern Louisiana has become home to three of the country's largest LNG export facilities with several others under construction or proposed.

Despite this growth, the full impact of the LNG sector in Louisiana is unclear, with local trade groups and state development officials saying they do not have the data.

Still, the sector clearly provides incomes and taxes that are desperately needed in a hard-hit area, said Loren C. Scott, professor emeritus of economics at Louisiana State University.

"This is a metro area that is really struggling right now," he said, noting the region has been hit by four major natural disasters in recent years, including Hurricane Laura in 2020 and Hurricane Ida a year later.

A decade ago, Scott studied a single large LNG-export facility in Louisiana and found it had a huge economic impact.

Over eight years of construction, it supported more than 5,600 jobs a year on average, he said, while spurring the creation of more than 16,000 jobs state-wide.

Once operational, it employed 640 people and supported 2,800 more.

"For every new job created at the plant, there are 3.3 jobs created elsewhere in the economy," he said, "in retail, health care, construction."

Today, that would translate into around $15 million in local government taxes, he estimated.

The LNG sector "is really, really important, and it's very discouraging to see this pause," Scott said.

Louisiana Governor Jeff Landry called the pause "a gut punch to our hard-working men and women" in an emailed statement.

"Anytime a company invests billions of dollars to expand or establish business operations in our state, local governments reap financial benefits. Postponing the deployment of those funds likewise delays the positive ripple effects of new jobs and new spending," the state's economic development office said in a statement.

The pause could even affect efforts underway to transition the state's energy toward green hydrogen, particularly using wind energy, said Lacy McManus, executive director of Future Energy, which works on the energy transition in southern Louisiana.

"On the ground in Louisiana, it's going to make our transition to cleaner hydrogen significantly more difficult."

THE JOBS QUESTION

Even as U.S. gas exports have skyrocketed, President Joe Biden's administration last year pledged to fill new gas needs in Europe due to cuts in Russian supplies over the war in Ukraine.

Those new supplies alone would support 71,500 jobs a year, along with tens of billions of dollars in expenditures, according to a letter sent to the administration last week by dozens of oil and gas trade groups.

Halting LNG export approvals "would be a major mistake that puts American jobs and allies at risk while undermining global climate goals," it said.

Yet others question the full impact of those jobs.

Very few of the workers engaged in LNG export facilities are unionized, said a source familiar with organized labor in the energy sector, speaking on the condition of anonymity.

Unionized contracts can ensure workers have access to high wages, strong health care and pensions, as well as training for new renewable-energy industries – all key elements of a just transition, the person said, noting the administration's move appears to be more focused on environmental impacts.

James Hiatt, a native of southwest Louisiana who worked in the oil and gas industry for more than a decade and now runs the non-profit For a Better Bayou, said the administration's pause would halt work on four major LNG-export facilities.

"That's huge," he said, but noted that several other facilities under construction are already permitted.

He acknowledged that the industry does offer some high-paying jobs, but noted that after construction is finished, many positions were taken by workers from far away, even out of state.

That leaves local communities to deal with the facilities and their effects, as they have through decades of hosting the petrochemical industry.

"They don't add up to be a benefit for anybody, much less the local communities," Hiatt said.

"If they were good for economic development, the community would see proof of that – and we don't."

(Reporting by Carey L. Biron; Editing by Jon Hemming. The Thomson Reuters Foundation is the charitable arm of Thomson Reuters. Visit https://www.context.news/)