Free Markets, Free People

The US could become the world’s largest exporter of Liquid Natural Gas … “if”

Could.  That’s the operative word. “If” is the keyword.  We certainly have the assets and infrastructure.

By 2017 the U.S. could be the largest exporter of liquefied natural gas in the world, surpassing leading LNG exporters Qatar and Australia. There is one big “if,” however. America can produce more gas, export a surplus, improve the trade deficit, create jobs, generate taxable profits and reduce its dependence on foreign energy if the marketplace is allowed to work and politics doesn’t get in the way.

However, there are few things like this in which politics doesn’t get in the way.  And don’t forget the crony capitalists:

But exporters must overcome growing opposition to LNG exports by environmentalists and industrial users of natural gas. Exporters must also get multiple permits from environmentally conscious federal officials. And Rep. Ed Markey (D.-Mass.) has proposed legislation to bar federal approval of any LNG export terminals until 2025. Those who most fear global warming don’t want anyone anywhere to use more fossil fuel, even “cleaner” natural gas.

Of course the most beneficial thing to do would be to let the market for LNG work.  But there are vested interests which will lobby against that:

Exporting energy, however, rubs a lot of people the wrong way. [T. Boone] Pickens wants cheap natural gas for his 18-wheelers and opposes LNG exports. Industrial gas users argue that a vibrant LNG industry would propel domestic gas prices higher. A study by Deloitte said that exporting six 6 BCF [billion cubic feet] per day of LNG would raise wellhead gas prices by 12 cents per million BTU (about 1% on a retail basis). Advocates of “energy independence” argue that exporting LNG would tie U.S. natural gas prices to global markets.

The Energy Department’s Office of Fossil Energy is considering whether exporting LNG is in the public interest. In the meantime — shades of Keystone XL — the department has effectively put a moratorium on new LNG export licenses.

Energy’s decision-making process balances the extent to which exporting LNG drives up prices with the economic benefits of increased production and energy exports. The price assessment comes at a time when U.S. gas fetches the same price in constant dollars as it did in 1975. Producers are now shutting down production and lowering exploration budgets. The shale-gas “job machine” is now in reverse.

So what would be the ideal?

Ideally, the Energy Department should move quickly and recognize free-market principles. And the administration could send a clear policy signal that natural gas is integral to the country’s energy future and that exporting LNG is good economics and consistent with its 2010 State of the Union address to double U.S. exports over five years and create two million new jobs. But Energy is moving slowly, and administration signals on natural gas are mostly lip service. The economic-benefits study should have been done by the end of March. But last week, Energy delayed its release until late summer, and said there is no timeline to review results and develop policy recommendations. Translation: after the election.

We’ve seen this scenario before (*cough* Keystone *cough*).

Here we are in the middle of a recession and we’re seeing the same sort of nonsense being played out as we have with other energy projects.  The delays are literally playing with people’s lives and livelihoods:

Estimates of the job benefits from U.S. LNG projects depend on a variety of assumptions. Roughly 25,000 direct construction jobs would be created if all the projects are built. Increasing the U.S. natural-gas production base by another 13 billion cubic feet might translate to 450,000 direct and indirect jobs and $16 billion in annual tax revenue for federal and state coffers.

It’s easier to forecast improved trade balances. Exporting 13 BCF per day of LNG could generate about $45 billion annually. Reaching Pickens’ goals could offset another $70 billion annually of oil imports.

But, instead, the Energy Department is delaying.

And people wonder why coming out of this recession we aren’t adding jobs to the economy as we have in past recessions?

Politics and policy, my friends, politics and policy.

~McQ

Twitter: @McQandO

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10 Responses to The US could become the world’s largest exporter of Liquid Natural Gas … “if”

  • Ideologues pushing national policy.

    Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive. C. S. Lewis

    • @Johnny Jones “AUSTRALIA’S liquefied natural gas export growth is being threatened by a continued slide in US natural gas prices that is making North American LNG projects more appealing and is set to weigh on global gas export pricing. “

  • Ideally, the Energy Department should move quickly and recognize free-market principles.
    ——————————————————————————————————————

    Or…just get the FLUCK out of the way. HOW HARD IS THAT…???

    • @Ragspierre Exactly how much power does the DOE generate anyway? When I am dictator, the DOE, Dept of Ed, HHS, HUD will all be eliminated in the first three hours. My campaign slogan is: “Boom Times for the 50, Depression for D.C.”

      • dont forget the EPA and Legal Services, and a few others. Personally I would transfer every single one of their employees to INS and border security. If they want to keep their job they have to move. @TheOldMan

  • This fits into that conspiracy theory that the US is trying to drain all the fossil fuels out of everywhere except North America.

  • For those of you guys who heat your homes with heating oil, would you like the chance to use LNG?

    • @Ragspierre Oh good, now they can revisit LNG blowing up the entire harbor and the city to boot scares that they doused us with in the 70′s. Now we throw in Islamic Jihadists to boot. I can hardly wait for THAT scary story. It’ll be like the guy from Friday the 13th back from the dead to scare us all back into our caves.

  • The problem is just how few people actually understand the case for freedom. We have an intrusive government because we have an immoral population who wants to meddle in the affairs of others. Only when you are wiling to let others live their life as they want, make money as they want, and associate as they please, only then can you be free yourself.