Despite a recent DOE-commissioned report confirming that allowing for more exports of liquified natural gas would indeed be a boon for the economy, certain lawmakers and naysayers are still making hay over the ostensible possibilities for negative economic impact. Given the many solid reasons for allowing the natural-gas industry greater freedom and the few trivial non-impediments, the fact that this debate can still be categorized as “ongoing” is getting pretty ridiculous:
The net effect is a reshaping of the U.S. energy industry and our economy. Additionally, the country’s increased reliance on natural gas (displacing coal) has already benefited the environment, and will continue to do so in the future. Carbon emissions hit a 20-year low (in the first quarter 2012 according to EIA) and some industry observers believe that the U.S. could meet the Kyoto agreement standards by 2020 (even though the U.S. did not sign it). …
Some studies indicate that the U.S. has avoided retreating into an economic recession as a result of activity in the unconventional oil and gas sector. Production areas for unconventional oil and gas have observed very low unemployment and stronger GDP and tax revenues as compared to the rest of the U.S. As a result of the significant near term investments associated with unconventional oil and gas, it’s possible that up to 3.5 million jobs will be created from the infrastructure build out and related opportunities (including both direct and indirect jobs).
What could impede U.S. progress? Political gridlock.
Aaand how! The U.S. government actively involves itself in supporting American exports in other sectors (agriculture being the most obvious example), but suddenly when it comes to natural gas exports, they find themselves unsure of what to do? This is one of the worst problems of a big, over-bureaucratized government: It caters not to the country’s general interest, but to the country’s specific interests. Environmental groups that loathe fracking, along with certain industries that use a lot of natural gas and fear higher prices, are LNG-exports’ main opponents, but the influx of jobs creation and economic growth would benefit Americans across the board.
The Obama administration is currently sitting on at least 15 applications from energy companies for new export terminals, and they’re scheduled to decide on just four of them in 2013. The Obama administration should hurry up and get a move on, since the benefits are undeniably manifold — as the NYT acknowledged in a weekend editorial, hem hem:
Production from shale gas fields has swelled American reserves and driven down prices by two-thirds since 2008. American natural gas is now among the cheapest fuels anywhere in the world and costs as little as one-fourth of what the fuel sells for in Europe and Asia.
There will be trade-offs to lifting the export restrictions. On the plus side, the report says that exports of gas in liquefied form could provide a $47 billion boost to the economy by 2020, including the construction of gas terminals. While the report dwells largely on economic issues, exports would also help to lower emissions linked to global climate change by giving countries like India, China, Japan and Germany access to a cleaner energy source than coal.
Greater gas exports could also factor into American foreign policy. By offering countries like India and China access to cheap American gas, Washington could make it more palatable for them to join in supporting sanctions against Iran, for instance. And it could give the United States new leverage in trade negotiations.