Energy Dept. to delay more natural gas export decisions

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Michael Bastasch DCNF Managing Editor
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The newly confirmed Energy Secretary Ernest Moniz has announced he will delay the final approval of 20 applications to export liquefied natural gas until he reviews studies on the impact exports would have on domestic natural gas prices.

“I want to do, as I promised to Chairman Wyden, to make sure that we are using up-to-date data and then we want to go forward on a case-by-case basis … in terms of evaluating licenses in as expeditious a way [possible], consistent with that review process,” said Moniz, according to The Hill.

The latest Energy Department commissioned study found that exporting natural gas would benefit the U.S. economy, despite higher gas prices. Democrats claimed the study was flawed because it relied on outdated information and relied on flawed market assumptions.

Moniz said that the Energy Department had no plans to commission another study.

Moniz’s announcement comes just after the Energy Department gave conditional approval for a Texas facility to export natural gas — the first approval since 2011.

Companies need to get Energy Department approval in order to ship liquefied natural gas to countries the U.S. does not already have a free trade agreement with.

The oil and gas industry is seeking to export more gas to foreign markets where gas prices are higher, which critics say will raise domestic prices. However, industry argues that exporting natural gas would spur more investment in the U.S. and create jobs.

“It is abundantly clear that exports to the world market generate benefits for Americans, and also for our strategic allies, including those in Europe, Asia, and South and Central America,” said Erik Milito, the American Petroleum Institute’s director of upstream and industry operations.

Increased prices of natural gas would be offset by the huge economic gains, according to an Energy Department-commissioned study on natural gas exports.

“In all of these cases, benefits that come from export expansion more than outweigh the losses from reduced capital and wage income to U.S. consumers, and hence LNG exports have net economic benefits in spite of higher domestic natural gas prices,” reads the study. “This is exactly the outcome that economic theory describes when barriers to trade are removed.”

Environmentalists have balked at the idea of allowing more natural gas exports, arguing that it will accelerate climate change as more fossil fuels are shipped and used around the world.

“Exporting LNG will lead to more drilling — and more drilling means more fracking, more air and water pollution, and more climate fueled weather disasters like last year’s record fires, droughts, and superstorms,” Deb Nardone, director for the Sierra Club’s Beyond Natural Gas campaign, said in a statement.

“As we have shown, once environmental impacts are evaluated, it becomes clear that the additional fracking and gas production exports would induce is unacceptable,” Nardone added.

However, it has been argued that exporting natural gas would make investing in renewable energy more attractive. Exports could cause natural gas to become more expensive relative to other energy sources — making renewable energy look like a better investment.

“The renewable energy industry would benefit from higher natural gas price … since, as these fuels for electric power plants become dearer, renewable energy sources become more competitive,” writes Kurt Cobb for

The Energy Information Administration predicted last year that rapidly increasing natural gas exports would cause “large initial price increases that would moderate somewhat in a few years.”

However, more expensive natural gas is exactly what some domestic manufacturers don’t want. Dow Chemical and other businesses have come out against increased natural gas exports, saying it will raise manufacturing costs.

“The shale gas boom in this country has really brought a competitive advantage to the United States,” said George Biltz, Dow Chemical’s vice president of energy and climate change, in a statement. Biltz added that unrestricted exports “would raise prices dramatically, would have a very negative effect on this industry and a massive ripple effect economically.”

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