By Barbara Kasoff, re-blog from Morning Consult
At a Washington gathering last month, Energy Secretary Ernest Moniz offered a high-level view of the “challenges, vulnerabilities and opportunities” that America’s energy revolution is now bringing us. One of those opportunities, he told the assembled industry, government and academic experts, was the need for a modernized energy infrastructure that lives up to our new status as the number one producer of oil and gas in the world.
Moniz highlighted the role of the Department of Energy (DOE) in approving federal permits for exports of liquefied natural gas (LNG). That’s all well and good, but we have to streamline this process so we can make the remarkable output of domestic natural gas from shale deposits available to global markets hungry for new sources of energy. In just a few short years, America has literally reversed the flow of natural gas from dependence on foreign sources to the promise of a robust export market.
“Moth-balled LNG import facilities from the 2000s are being re-purposed and the U.S. will likely begin exporting LNG early next year,” Moniz said. “In fact, if all the facilities were built pursuant to DOE’s cumulative approved export permits or those that could be approved over the next year, the U.S. would be in the same league as Qatar, the world’s largest LNG exporter – while still sustaining ample supplies for domestic use.”
Harvard University recently published a study that adds more urgency to this positive outlook for LNG. “The potential size of the LNG export market is uncertain,” the Harvard experts wrote, “but we estimate that in a favorable price environment, it could reach 3.1 trillion cubic feet by 2030, or 14 percent of total U.S. production, and contribute an additional $18 billion in GDP.”
One of the “immediate action steps” proposed in the Harvard study is to remove the regulatory restrictions that are slowing the permitting process that Moniz oversees. The foot dragging on LNG, much like the current ban on crude oil exports, is a vestige of a bygone energy era characterized by worries of scarcity and dependence on foreign energy resources. The American energy revolution has swept those concerns away.
As it was just announced this week, things are moving forward partially for crude oil, as The Senate Committee on Energy and Natural Resources will meet within the next two weeks to consider lifting the 40-year-old ban on exporting crude oil.
Modernizing the regulatory process for LNG exports is a bipartisan issue that Congress, the domestic energy industry and the Obama administration can get behind. That would represent an important first step toward a new era of bipartisan collaboration on U.S. energy policies. Sen. John Barrasso, a Wyoming Republican, offered an amendment to the National Defense Authorization Act in beginning of July that would do just that.
“If President Obama is serious about helping the people of Ukraine, he will immediately expedite the approval process for liquefied natural gas exports,” Barrasso said last year, shortly after President Obama said there would be “costs” for Russia’s actions. “American natural gas exports would help Ukraine free itself from Russian energy and Putin’s political manipulation,” Barrasso added. And though the amendment was not included, it is initiatives such as this that we cannot overlook.
Indeed, the 2015 Economic Report of the President noted that “an increase in U.S. exports of natural gas, and the resulting price changes, would have a number of mostly beneficial effects on natural gas producers, employment, U.S. geopolitical security and the environment.” Not only would significant exports of American LNG reduce European dependence on Russia and Iran – the current primary suppliers for that region – but the increased trade could support as many as 65,000 American jobs.
In February, North America’s first LNG export terminal, Cheniere Energy Inc.’s Sabine Pass on the Gulf Coast, is expected to send its first shipments to buyers in Lithuania, Reuters reported. The Baltic states and Poland are looking to imports from the United States to reduce their dependence on supplies from Russia.
Speeding LNG exports is something we can all get behind. It’s the cleaner burning energy that our friendly trading partners need, and a way to create jobs and strengthen our economic rebound at home. Now, let’s get busy in Washington to clear the regulatory roadblocks.