With Natural Gas Exports, U.S. Senses Big Opportunity

Kudos to Senate Energy and Natural Resources Chairman Ron Wyden for a series of hearings on natural gas issues, including Tuesday's on the impacts of exporting liquefied natural gas (LNG). It’s vital that policymakers understand the scope of America’s natural gas wealth – thanks to hydraulic fracturing – so they can make decisions that will let this wealth work for Americans. The export of LNG is a prime example.

Currently, the Energy Department is considering 18 applications for U.S. facilities that would export American LNG to friends and allies overseas. Studied analyses have projected broad job and economic benefits to the U.S. from LNG exports (here and here), with a new report this week dispelling the notion that exports would significantly impact domestic prices. These reports strongly suggest that government should approve the remaining LNG applications and not try to pick winners in the private market.

Another powerful suggestion on natural gas policy comes from the American people, in new polling from Harris Interactive that shows strong support for exporting LNG – for jobs, for the economy, for American security. Key results:

71 percent agree: Exporting natural gas will help create U.S. jobs

66 percent agree: Exporting natural gas is good for the U.S. economy

 
Other poll results:

• 66 percent agree: Exporting natural gas keeps energy dollars in the United States.
• 63 percent agree: Exporting natural gas helps reduce America’s trade deficit.
• 64 percent agree: Exporting natural gas strengthens U.S. energy security.

Favorable support on all of these questions is found across age and gender groups. API Chief Economist John Felmy:

"American voters know that exporting more of America's domestic energy would lead to more jobs, help the economy, and reduce the nation’s trade deficit. The United States has the opportunity to get it right and use its abundant supplies of clean-burning natural gas resources to meet the president’s goal for doubling U.S. exports by 2015.”

America’s opportunity with abundant, affordable natural gas is there, but it will take the right policies to turn opportunity into reality. It will require access to new reserves and a regulatory approach that leads to safe and responsible development - without unnecessarily encumbering enterprise and innovation. The Wall Street Journal (pay publication) warns against delays and conditional approvals on LNG exports:

Regulatory indecision is nearly as much of a threat to gas development as political opposition in an ultra capital-intensive industry. This month Japan's Mitsubishi and Mitsui and France's GDF Suez committed to invest $6 billion to $7 billion in a Louisiana LNG development backed by the U.S. Sempra Energy – assuming regulatory approval. Such deals will wither if regulatory uncertainty grows. A barrage of federal regulations and enforcement decisions over the last several years means that natural gas permits that used to take 60 days now require up to 18 months, and projects that used to win approval in a year take three times that. The danger is that the U.S. is lilting into a system in which politicians second-guess markets and decide how much of America's natural gas assets to sell abroad.

Again, it’s good that Sen. Wyden is holding these natural gas hearings. American-made energy can be a game-changer for our country – creating jobs, helping grow the economy, strengthening our energy position in the world. But the right policy choices and actions must follow. The Harris Interactive poll clearly indicates the country senses the momentous opportunity at hand. Felmy:

“The American people get it. The U.S. can be a global energy superpower as long as our leaders pursue smart energy policy.”