Lawmakers: So, now would be a pretty good time to start greenlighting natural gas exports, no?

posted at 5:21 pm on March 4, 2014 by Erika Johnsen

Russia has been holding its own vast natural gas supplies over the heads of Ukraine and the European energy market at large for years now; pipeline running through Ukraine accounts for about fifteen percent of Europe’s gas supplies, not to mention around a third to a half of Ukraine’s. Putin cut off gas supplies to Ukraine most recently in 2006 and 2009 to exert just the right amount of pressure to keep Ukraine within their sphere of influence, and for the past few months, Russia has been (oh-so-generously and dispassionately) supplying them with heavily discounted gas that the Ukrainian government in turn subsidizes for their consumers to try and stave off their own major fiscal and economic problems. Not at all surprisingly, Russia’ state-controlled gas giant Gazprom announced today that they have decided to cancel that price discount, via the AP:

Gazprom chief Alexei Miller said Tuesday in televised remarks that Ukraine has accumulated a $1.5-billion debt for Russian gas supplies. He added at a meeting with Russian Prime Minister Dmitry Medvedev that Gazprom will cancel a price rebate for Ukraine starting April 1.

Russia offered the discounted price and a $15-billion bailout to Ukraine in December following President Viktor Yanukovych’s decision to ditch a pact with the European Union in favor of closer ties with Russia.

The underlying danger is that, if things continue to escalate, Russia could decide to yank supplies from Ukraine and Europe altogether — although Daniel Yergin doesn’t think they’ll actually take it that far, at least for now, per Politico:

“With everything else going on, I think it would only be in the context of if things somehow got much worse,” Daniel Yergin, a Pulitzer Prize-winning energy historian, told POLITICO in an interview at the annual IHS CERAWeek conference…

“From the viewpoint of Russia, part of its value-proposition is that it’s a reliable supplier,” he said.

Cutting off natural gas supplies, even if the goal is to hammer Ukraine, would likely have a major impact on the rest of Europe. And experts say that would further exacerbate an already tense situation.

Furthermore, Russia needs buyers just as much as those buyers need a seller, and Europe has been doing pretty well with hedging its own gas supplies this year. But, either way, this all begs the question: Why, exactly, hasn’t the United States better positioned itself to take better economic and geopolitical advantage of our own energy abundance, again? Because we should be, as several Republican lawmakers have chimed in this week, via the WFB:

“One immediate step the president can and should take is to dramatically expedite the approval of U.S. exports of natural gas,” Boehner said in a statement. …

“The United States has abundant supplies of natural gas … and the U.S. Department of Energy’s excruciatingly slow approval process amounts to a de facto ban on American natural gas exports that Vladimir Putin has happily exploited to finance his geopolitical goals,” Boehner said. …

“We also need to open up exports of domestic natural gas to our allies and partners in the region so that they are less susceptible to Russia’s efforts to use energy as a weapon,” wrote Sen. Marco Rubio (R., Fla.) and Rep. Tom Cotton (R., Ark.) in a CNN column on Tuesday.

Sen. Lisa Murkowski (R., Alaska), ranking member of the Energy and Natural Resources Committee, told an audience in Houston on Monday that current export restrictions are reducing the country’s ability to “respond quickly and nimbly” to punitive market manipulations by Russia and others.

Instead, we’re behind the geopolitical curve here — but this could still be our shale boom’s time to shine.


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Cutting off natural gas supplies, even if the goal is to hammer Ukraine, would likely have a major impact on the rest of Europe. And experts say that would further exacerbate an already tense situation.

The Europeans need a crash program of fracking, offshore oil and gas exploration, and revitalizing the coal industry. They need to restart idled nuclear power generation facilities, and mothballed coal generation plants. Their target should be to themselves turn off the pipelines from Russia by the beginning of the next heating season.

slickwillie2001 on March 4, 2014 at 5:31 PM

I say keep the gas here at home.

astonerii on March 4, 2014 at 5:33 PM

No.

And stop making sense.

novaculus on March 4, 2014 at 5:33 PM

“This isn’t that fight either.” – Mitch McConnell

Meople on March 4, 2014 at 5:36 PM

No.

I just bought 100 gallons of propane for my home tank. The price is astronomical. When you export it, you will do to the price of propane what has been done to the price of diesel.

Through the roof. Through the roof, Alice. Through the roof.

No, no. No exports. Keep it here and keep our prices down.

chuckh on March 4, 2014 at 5:37 PM

How about suspending the Jones Act so people on the east coast can get the natural gas, propsane, salt, and sand they need?

dentarthurdent on March 4, 2014 at 5:42 PM

No.

I just bought 100 gallons of propane for my home tank. The price is astronomical. When you export it, you will do to the price of propane what has been done to the price of diesel.

Through the roof. Through the roof, Alice. Through the roof.

No, no. No exports. Keep it here and keep our prices down.

chuckh on March 4, 2014 at 5:37 PM

Not if we also open up federal lands to more gas and oil exploration. Not if we waive the Jones pro-union Act for a year or two.

slickwillie2001 on March 4, 2014 at 5:43 PM

Cutting off natural gas supplies, even if the goal is to hammer Ukraine, would likely have a major impact on the rest of Europe. And experts say that would further exacerbate an already tense situation.

Right. These are the same so called experts who have gotten every single thing about this little unpleasantness wrong so far.

Idiots.

Johnnyreb on March 4, 2014 at 5:45 PM

Not sure the cost of cooling the gas and shipping would be cost effective. The EU will just be submissive to Putin’s aggressions ignoring the consequences and keep their trade market secure.

plutorocks on March 4, 2014 at 5:47 PM

No, no. No exports. Keep it here and keep our prices down.

chuckh on March 4, 2014 at 5:37 PM

Keep our children from being energy starved as well.

astonerii on March 4, 2014 at 5:48 PM

Gas is cheap. It costs about $1.50 to heat my hot tub to 100 degrees on a 45 degree night and keep it there for an hour. It’s the dang $17/month for the second meter that irks me but it will be handy when I install my 6 cylinder generator this year.

Let ‘em eat cake.

DanMan on March 4, 2014 at 5:50 PM

Like everything else energy, we should’ve already been doing if! There’s jobs, money, plenty of energy for us. Shove those wind farms up Al’s big a$$.
Drill b!tch drill!

RovesChins on March 4, 2014 at 5:51 PM

Not sure the cost of cooling the gas and shipping would be cost effective. The EU will just be submissive to Putin’s aggressions ignoring the consequences and keep their trade market secure.

plutorocks on March 4, 2014 at 5:47 PM

The simplest solution would be for the EU elite not to antagonize autocratic Russia. Cool down the situation and normalize relations and trade. Stop trying force NGO’s into Russia to change the nature of their political situation, it will only backfire.

FrankT on March 4, 2014 at 5:53 PM

plutorocks on March 4, 2014 at 5:47 PM

no worries. The ships tat transport liquified gas use the product to power the engines and coolers too.

DanMan on March 4, 2014 at 5:53 PM

If Barry is so scared to use our military to bargain from a position of strength, the next best thing would be to ramp up oil and gas production for export. If we become the world leader in oil and gas we would another position of strength to negotiate from. Right now it is the college prof in Mom jeans on a tricycle vs. the KGB Colonel on a horse with a rifle and knife.

Sven on March 4, 2014 at 5:55 PM

No, no. No exports. Keep it here and keep our prices down.

chuckh on March 4, 2014 at 5:37 PM

Many conservatives will come down on the side of opening up the market, even if it means rising prices for middle class Americans back home.

FrankT on March 4, 2014 at 5:58 PM

Exporting NG is stupidity. It gives america an economic advantage we can’t ignore.

aniptofar on March 4, 2014 at 5:59 PM

Many conservatives will come down on the side of opening up the market, even if it means rising prices for middle class Americans back home.

FrankT on March 4, 2014 at 5:58 PM

Conservatives? No, big business crony capitalist regressives.

astonerii on March 4, 2014 at 6:00 PM

If Barry is so scared to use our military to bargain from a position of strength, the next best thing would be to ramp up oil and gas production for export. If we become the world leader in oil and gas we would another position of strength to negotiate from. Right now it is the college prof in Mom jeans on a tricycle vs. the KGB Colonel on a horse with a rifle and knife.

Sven on March 4, 2014 at 5:55 PM

This right here would change the paradigm with Russia overnight. All Obama has to do is announce we wont let Europe be hostage to Russia any longer with regards to energy. He could announce he is 100% behind Keystone and other projects languishing with the EPA. This alone would at least make Putin take notice and re-think things.

Sadly, Obama wont do that because it would anger his lunatic eco fringe base. Remember he and Kerry think Global Warming is more of a threat than Putin.

Johnnyreb on March 4, 2014 at 6:01 PM

Slick has it right, but the dominant Greenie, Enviro-Nasty idgits of of Western Europe will have none of it. As always, Germany is the key and has begun to slooowly harken back to the good ol’ days of energy within their own borders. Unfortunately, fricken frackin’ remains the Holy Grail of frustrated dreams. They’d rather play with the traditional ‘black gold’ of times’ past than clean up their act with gaseous cleanliness – might piss off the Gods of Globular Warminess. Pootin rules the day, but, as usual, the Bear will overreach and find itself hanging in the wind of its own petard – one hopes…

vnvet on March 4, 2014 at 6:01 PM

…stop it!…Stop it!….STOP IT!…look who’s President!

KOOLAID2 on March 4, 2014 at 6:02 PM

Speaking of Gas:

Obama health care law
8m
White House threatens to veto House bills to repeal greenhouse gas emission limits, repeal ObamaCare individual mandate – @markknoller
end of alert

canopfor on March 4, 2014 at 6:04 PM

…stop it!…Stop it!….STOP IT!…look who’s President!

KOOLAID2 on March 4, 2014 at 6:02 PM

Uerkel?

RovesChins on March 4, 2014 at 6:05 PM

I have a question (a real one)…

What’s the deal with oil and NG as a commodity? Can we extract it and then just refine it and sell it nationally? I ask because I remember reading some crap about how no matter what we produce “locally”, it ends up on the global market, and as such, is subject to the same pricing as any other nation’s oils/gas.

Seriously, lemme know!

BTW, I’m all for it, man. I’d buy a tree-huggin’ NG car if I knew I’d be filling it with North Dakota gas…..

Fathom on March 4, 2014 at 6:10 PM

The simplest solution would be for the EU elite not to antagonize autocratic Russia. Cool down the situation and normalize relations and trade. Stop trying force NGO’s into Russia to change the nature of their political situation, it will only backfire.

FrankT on March 4, 2014 at 5:53 PM

So more or less surrender to Imperialist Russia?

slickwillie2001 on March 4, 2014 at 6:12 PM

…stop it!…Stop it!….STOP IT!…look who’s President!

KOOLAID2 on March 4, 2014 at 6:02 PM

Exactly. All of this talk of drilling is pointless with Obamism occupying the White House. NO chance.

And with that, just to close the circle of hopelessness:

“This isn’t that fight either.” – Mitch McConnell

Meople on March 4, 2014 at 6:12 PM

I have a question (a real one)…

What’s the deal with oil and NG as a commodity? Can we extract it and then just refine it and sell it nationally? I ask because I remember reading some crap about how no matter what we produce “locally”, it ends up on the global market, and as such, is subject to the same pricing as any other nation’s oils/gas.

Seriously, lemme know!

BTW, I’m all for it, man. I’d buy a tree-huggin’ NG car if I knew I’d be filling it with North Dakota gas…..

Fathom on March 4, 2014 at 6:10 PM

Yes, and export too. If the US becomes the worlds leadser in oil and gas we can control the price and influence over the world, it would be beneficial not only to lower our own costs but to have leverage over many countries. Think of the US as OPEC.

Sven on March 4, 2014 at 6:18 PM

I have a question (a real one)…

What’s the deal with oil and NG as a commodity? Can we extract it and then just refine it and sell it nationally? I ask because I remember reading some crap about how no matter what we produce “locally”, it ends up on the global market, and as such, is subject to the same pricing as any other nation’s oils/gas.

Seriously, lemme know!

BTW, I’m all for it, man. I’d buy a tree-huggin’ NG car if I knew I’d be filling it with North Dakota gas…..

Fathom on March 4, 2014 at 6:10 PM

The prices are set at the margins.
So, yes, the more supply there is, the lower the prices, as at some point people do not have any place to store it and stop buying every barrel that is available on the market. When this happens the last barrels price drops precipitously and sets the new market price. Or the opposite happens when there is too little. Since companies need stores of minimum amounts, it does not matter what the price is, they will pay more for the barrels that keep them in business. At least for a time until they figure out another way to make money.

Since we are a net importer, the more oil we create at home and thus do not buy on the open market, the more oil there is to fill up those reserves and get to the point of saturation, driving the price of oil down. Cost of oil at home will be somewhere near the opportunity cost of the oil if it were sold on the world markets.

astonerii on March 4, 2014 at 6:21 PM

Yes, and export too. If the US becomes the worlds leadser in oil and gas we can control the price and influence over the world, it would be beneficial not only to lower our own costs but to have leverage over many countries. Think of the US as OPEC.

Sven on March 4, 2014 at 6:18 PM

The prices are set at the margins.
So, yes, the more supply there is, the lower the prices, as at some point people do not have any place to store it and stop buying every barrel that is available on the market. When this happens the last barrels price drops precipitously and sets the new market price. Or the opposite happens when there is too little. Since companies need stores of minimum amounts, it does not matter what the price is, they will pay more for the barrels that keep them in business. At least for a time until they figure out another way to make money.

Since we are a net importer, the more oil we create at home and thus do not buy on the open market, the more oil there is to fill up those reserves and get to the point of saturation, driving the price of oil down. Cost of oil at home will be somewhere near the opportunity cost of the oil if it were sold on the world markets.

astonerii on March 4, 2014 at 6:21 PM

Cool, makes good sense, thanks for answering!

Let’s Drill this mutha!!!

Fathom on March 4, 2014 at 6:26 PM

Yes, and export too. If the US becomes the worlds leadser in oil and gas we can control the price and influence over the world, it would be beneficial not only to lower our own costs but to have leverage over many countries. Think of the US as OPEC.

Sven on March 4, 2014 at 6:18 PM

Unlike the other countries that sell their energy, American takes energy and turns it into wealth. I do not agree with exporting our heritage, which our energy is. I support not importing from other countries as much as we can avoid it, but in the end, if we are turning their energy into wealth for ourselves, I got no problem with imports of energy.
We should do what we can to force prices downward while at the same time importing that lowered cost energy. Leaving American resources for our grand children and their grandchildren as far out as we can promote the prosperity.

astonerii on March 4, 2014 at 6:42 PM

Why do we need to figure out how to export natural gas, when we can use it here? There is no gas on my street and I would like it and if there was a glut in the U.S. I could pay the $50,000 the gas company said it will cost to bring the gas line in my direction…it needs to be way cheaper than it is, and right now, it can’t go anywhere. Exactly why should I want to export it at my expense?

Fleuries on March 4, 2014 at 6:56 PM

I just bought 100 gallons of propane for my home tank. The price is astronomical. When you export it, you will do to the price of propane what has been done to the price of diesel.
chuckh on March 4, 2014 at 5:37 PM

I buy propane 125 gal at a time for home heating and agree about the price. But you are confusing it with natural gas which is not the same thing.

========================================

What Is the Difference Between Propane & Natural Gas?
By Eric Dontigney, eHow Contributor

There is a common public misunderstanding that propane and natural gas are the same thing. This misunderstanding can be attributed to the number of apparent similarities between the two gases. Both can transported by tank truck, are colorless and odorless (in pure form), and are often put to the same residential uses (heating, cooking and in grills). However, there are number of differences between the two gases that are discussed below.

(snip)
Sources

While natural gas, which is mostly methane, occurs normally in nature, propane is a byproduct of the refining process of either natural gas or oil.

(snip)

Read more: http://www.ehow.com/facts_4926140_difference-between-propane-natural-gas.html#ixzz2v2hpwISE
===========================================================

timmytee on March 4, 2014 at 7:20 PM

timmytee on March 4, 2014 at 7:20 PM

I knew they were not the same, but glad to know more about the differences. Thanks!

astonerii on March 4, 2014 at 8:17 PM

While natural gas, which is mostly methane, occurs normally in nature, propane is a byproduct of the refining process of either natural gas or oil.

Yepper. Another problem with propane supply in the past fall/winter had to do with the timing of corn harvesting in the US. Propane is the fuel of choice for drying corn during harvest.

Usually the harvest takes place in an orderly timeline from south to north which results in an also orderly consumption of propane supplies. This past fall saw a very compressed harvest timeline due to bad weather in the southern harvest areas. This meant that rather than an orderly consumption of propane, farmers from south to north ALL needed it at the same time which then resulted in a shortage of propane for home heating at the start of the heating season.

In addition, there were a couple of unscheduled refinery outages in that time frame which further curtailed propane availability. Then, of course, the winter has been colder than normal which has kept the pressure on supply and kept prices high.

Then there is also the effect of bone headed and ancient US regulations which make the supply situation ever more difficult:

The Jones Act makes it illegal for non-U.S. ships from transporting goods between U.S. ports, and is backed by labor unions, shipyards and shipowners. The law’s proponents argue that it’s necessary for national security and economic reasons.

So yeah, propane supplies are pretty screwed up but don’t have a lot to do with natural gas production from fraking.

climbnjump on March 4, 2014 at 8:51 PM

Putting Boehner’s picture up there make the whole article seem worthless. He is a worthless piece of garbage who is sucking up to obama like he’s sucking on a tit.

onesheep on March 4, 2014 at 9:11 PM