Don’t Forget about LNG in Your Backyards: on the effort to deny LNG exports

March 14, 2013 by

Exporting natural gas is crucial to maximizing the potential of onshore gas development for our communities and America’s energy security.  However, there is a growing, self-interested effort to slow liquid natural gas (LNG) exports.  The consequences of doing so would mean slowed natural gas production, net economic loss, and missed opportunity to both improve our trade deficit and help bolster the energy security of America’s allies.

Today, the House Natural Resources Committee, Subcommittee on Energy & Mineral Resources is holding a hearing entitled, “America’s Onshore Energy Resources: Creating Jobs, Securing America, and Lowering Prices.”  That hearing may very well address this issue of exporting LNG.  And that would be an apt discussion, considering the number of LNG facilities built, being built or planned that impact members of this subcommittee – from Sabine Pass for Rep. John Fleming to Jordan Cove for Rep. Peter DeFazio.  These projects are critical to ensuring not just the future of natural gas production here in the United States, but also to providing investment and creating jobs in those districts and in the wider American economy.

Unfortunately, there’s an effort to slow down exports so that these projects are ground to a halt.  As I wrote last month in the Pittsburgh Post-Gazette, the United States is uniquely positioned to capitalize on its massive supply of natural gas in internal markets.  I went on to describe a new campaign aimed at slowing exports:

The [America’s Energy Advantage] campaign, funded in part by Alcoa, an aluminum producer, and Dow, a multinational chemical company, contends that LNG exports would raise domestic energy prices and put at risk around $90 billion in potential capital spending by the U.S. manufacturing sector.

There is, however, one small problem with their argument. First a new, in-depth report from the Department of Energy tells a different story. And, most importantly, Dow earlier wrote to the energy department arguing that LNG exports would not lead to significant price increases as the company advocated for its Freeport LNG terminal.

The energy department’s analysis determines that exporting LNG outweighs the risk of potentially higher domestic gas prices. Furthermore, the analysis finds a direct correlation between the economy and exports: The more LNG exported, the greater the economic benefit for the U.S.

Ultimately, limiting the production of domestic shale gas resources — by blocking exports — would isolate the U.S. from global energy markets, slow natural gas development that is helping drive our economic recovery and result in more volatile energy prices for American consumers. Free trade of LNG, however, would deliver a much-needed boost to the American economy and maintain the strong job growth seen in the natural gas industry.

I would urge members of the subcommittee to look at analyses of LNG exports made by NERA Economy Consulting, Deloitte, and Brookings.  There is real economic value to exporting natural gas – in your own backyard, and mine.  Let’s not miss this opportunity.

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