A fight has erupted on the Hill over exporting liquefied natural gas (LNG), with some Democrats urging Energy Secretary Steven Chu to delay while a bipartisan group of legislators is encouraging speedy approval of pending export projects.
“Creating more opportunities to sell natural gas into global markets and access overseas customers could help the goals of increasing gas use and smooth out the historical boom-bust cycles,” wrote Republican Congressman Cory Gardner of Colorado and Democrat Jim Matheson of Utah, along with 14 other representatives from western states, in a recent letter to Chu.
“We urge you to move forward approval of the current report on which DOE is working as well as the pending LNG export applications,” the letter continues.
In early August, a group of 44 congressmen from Arkansas, Louisiana, Oklahoma and Texas sent a letter to Chu pressing him to expedite approvals for LNG export terminals. They haven’t yet received a response.
Democrats led by Congressman Jared Polis of Colorado and Maurice Hinchey of New York called on the Energy Department to conduct an environmental impact statement before approving more LNG export deals or LNG terminal permits, according to the Hill.
“We are concerned that exporting more LNG would lead to greater hydraulic fracturing, or ‘fracking,’ activity thus threatening the health of local residents and jobs,” the Democrats wrote in a letter to Chu. “For instance, increased natural gas production in communities across the nation could negatively impact farmers, residents and local property values.”
On top of the environmental concerns that more exports would accelerate fracking in the U.S., Democrats have argued that exporting more LNG could raise electricity prices on consumers and manufacturers.
“Exporting natural gas will do one thing: raise prices,” Democratic Congressman Ed Markey of Massachusetts, a major opponent of exporting more LNG to other countries, wrote in the National Journal.
“In fact, that is just what the oil and gas industry wants,” he continued. “But if that happens, natural gas consumers will be exposed to higher prices and greater market volatility — in much the same way that the global oil market routinely rips off consumers at the pump.”
According to Markey, eighteen applications have been received by the Energy Department in order to export 40 percent of the country’s natural gas consumption. Thirteen applications have been approved so far and five are still pending.
“Natural gas is a great source of energy and something we are lucky to have a lot of in the U.S.,” Rep. Gardner said in a press release.
“Exporting LNG will create new jobs, help balance our trade deficit, and contribute to the stabilization of world gas markets,” Gardner continued.
The Energy Information Administration predicts that natural gas price will rise, even without considering exports. With exports, the EIA predicts that rapidly increasing LNG export levels would lead to “large initial price increases that would moderate somewhat in a few years.”
However, slowly increasing LNG export levels will lead to more gradual price increases, but the end result will be higher average fuel prices after that, in particularly between 2025 and 2035.
Slower increases in export levels lead to more gradual price increases but eventually produce higher average prices, especially during the decade between 2025 and 2035.
The Energy Department gives the final approval for LNG exports and for building new export terminals, including to countries that the U.S. has signed free trade agreements with. Those projects need to be deemed in the public interest in order to gain approval, which is generally granted to nations with free trade agreements, reports the Hill.
Reuters reported earlier this month that the Obama administration delayed the release of a report on expanding LNG exports once again, and most likely have pushed beyond the election the decision to allow increased exports.
“In an effort to slow gas production, environmentalists are seeking to ban the export of domestically produced natural gas,” Republican Congressman John Sullivan of Oklahoma and vice chairman of the House Energy and Commerce Subcommittee on Energy and Power, told the Hill.
“Limiting the global market for American-made natural gas would dampen industry growth, leading to reduced domestic production, fewer jobs and higher energy prices,” he added.
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