Quick Summary:
• Louisiana LNG companies receive $21.1 billion in tax breaks, doubling the state’s total industrial exemptions since 1998.
• Tax breaks cost $6.7 million per job in Louisiana, with Cameron Parish losing $14.9 billion in revenue by 2040.
• Promised local economic benefits are often unfulfilled, with minimal job creation and underfunded schools and services.
• Planned LNG terminals could erase one-third of U.S. greenhouse gas reductions under the Inflation Reduction Act.
• Industry claims billions in GDP and job contributions, while critics highlight environmental and community harm.
• Federal and state officials remain largely silent as LNG projects proceed despite environmental and financial concerns.
• Gulf Coast residents argue that corporate tax breaks favor shareholders over local communities and ecosystems.
A new report from the Sierra Club has spotlighted a stark reality in Louisiana: while liquefied natural gas (LNG) companies hand out turkeys and sponsor local events, they stand to gain over $21 billion in tax breaks through the state’s Industrial Tax Exemption Program (ITEP). This staggering figure is set to double the $20 billion granted to all industries in Louisiana since the program’s inception in 1998.
The report reveals how nine LNG export terminals—operating, under construction, or planned—are receiving property tax exemptions that critics say strip local communities of vital public revenue. These tax breaks, among the most generous in the nation, effectively subsidize the LNG industry to the tune of $6.7 million per job created in Louisiana.
Louisiana and Texas are at the forefront of the U.S.’s burgeoning LNG industry. The United States, now the world’s largest exporter of supercooled natural gas, relies heavily on these two Gulf Coast states for production and export. Key players like Cheniere Energy, Cameron LNG, Venture Global LNG, and Commonwealth LNG operate large-scale facilities in Louisiana, with several more terminals in various stages of planning and construction.
The Sierra Club report also draws attention to the environmental costs of this expansion. If all proposed LNG terminals in Louisiana and Texas are completed, the resulting emissions could negate about one-third of the greenhouse gas reductions anticipated under the Inflation Reduction Act.
While corporations tout the economic benefits of LNG, local communities face severe financial consequences. In Cameron Parish, a coastal community with a population of just 4,700, the impact is particularly stark. From 2012 to 2040, the parish is projected to lose $14.9 billion in revenue—funds that could have supported schools, healthcare, emergency services, and coastal restoration.
Critics argue that the promised economic benefits of LNG projects rarely materialize for local residents. James Hiatt, founder of the nonprofit advocacy group For A Better Bayou, criticized the industry’s token charitable acts like turkey giveaways, saying, “These deals essentially pay industry to inflict more suffering on already climate-ravaged communities by polluting the air and water while depriving Gulf Coast communities of vital revenue for schools, infrastructure, healthcare, emergency services, coastal restoration, and protection.”
In Texas, the financial losses are similarly alarming. Corpus Christi’s school district, for example, is set to forfeit $762 million over a decade due to tax breaks granted to LNG facilities. This figure represents two-thirds of the district’s annual budget.
The LNG industry defends its tax breaks as necessary incentives for economic growth. Charlie Riedl, executive director of The Center for LNG, stated, “LNG terminals support 222,450 jobs, resulting in $23.2 billion in labor income, contribute $43.8 billion to U.S. GDP, and generate $11 billion in tax and royalty revenue. These billions of dollars in benefits to local communities and the country at large highlight the important role U.S. LNG will play in growing our economy while reducing global emissions.”
However, environmental and community advocates push back against these claims. Cyndi Valdes, executive director of Ingleside on the Bay Coastal Watch Association in Texas, dismissed the promises of economic prosperity, saying, “LNG developers come in promising the moon and stars and convince elected officials to hand out millions in corporate welfare, but all they deliver is a handful of jobs—far fewer than advertised. Economic prosperity is only found in corporate boardrooms and shareholder conferences out of town. The truth is that the middle class and our coastal environment pay big for these disgraceful tax breaks.”
Beyond the financial costs, LNG expansion has significant environmental implications. The Sierra Club report highlights the local environmental degradation caused by these facilities, including air and water pollution. Coastal communities in Louisiana, already vulnerable to climate change, bear the brunt of these impacts.
Nationally, the LNG industry undermines efforts to combat climate change. The emissions generated by the planned terminals would significantly offset the progress made through federal policies like the Inflation Reduction Act.
Federal and state officials are facing growing scrutiny over the costs and benefits of LNG tax breaks. Earlier this year, President Joe Biden paused approvals of new LNG terminals to study their impacts. However, a judge later lifted this pause, allowing projects to proceed even as the Department of Energy continues its evaluation of whether LNG exports are in the public interest.
At the state level, Louisiana Economic Development, which oversees the ITEP program, declined to comment on the report’s findings. Local officials in Cameron, Calcasieu, and Plaquemines parishes also remained silent when approached for responses.
As James Hiatt put it, “These deals essentially pay industry to inflict more suffering on already climate-ravaged communities by polluting the air and water while depriving Gulf Coast communities of vital revenue.”
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