US Chamber of Commerce Blog
The Last Time the U.S. Was a Net Exporter of Natural Gas, Elvis was at the Heartbreak Hotel | Nov 28 2016
Sixty years ago in 1956, Elvis Presley got his first hit with “Heartbreak Hotel, Norma Jean Mortenson became Marilyn Monroe, and President Dwight Eisenhower signed the law that created the Interstate Highway System.
That year was also the last time the United States was a net exporter of natural gas. But thanks to fracking and the shale energy boom, our country reached a new milestone in 2016, The Wall Street Journal reports [subscription required]:
The U.S. has become a net exporter of natural gas, further evidence of the how the domestic oil and gas boom is reshaping the global energy business.
The U.S. has exported an average of 7.4 billion cubic feet a day of gas in November, more than the 7 billion cubic feet a day it has imported, according to S&P Global Platts, an energy trade publisher and data provider. Exports also topped imports for a few days in September, Platts reported. It has been nearly 60 years since the U.S. last shipped out more natural gas than it brought in annually, according to the U.S. Energy Information Administration.
The milestone comes less than a year after restrictions on most crude oil exports were lifted, allowing tankers of crude to be freely shipped overseas for the first time nearly half a century, and together they mark a significant and potentially permanent change in the way U.S. energy flows around the world. Overseas producers now have to deal with the growing clout of the U.S. energy industry, which is aggressively looking to ramp up its global market share to help offset a long period of low prices.
“Gas exports have risen more than 50% since 2010,” the Journal adds. “The Energy Department says the country will be the world’s third-largest producer of liquefied natural gas for export by , trailing Australia and Qatar.”
Most natural gas exports are going to Canada and Mexico, but a promising market is China which is about to receive its second U.S. shale gas shipment.
The Energy Information Administration predicted the U.S. would become a net natural gas exporter by 2017, but there was an inkling that this would happen sooner. Earlier this month, Bloomberg reported, “The U.S. is set to export a record number of cargoes, demonstrating a strong international demand for U.S. shale gas.bloomberg_chart_us_shale_exports_2016.png Bloomberg chart on U.S. natural gas exports in 2016.
At the same time domestic natural gas is being exported—supporting good-paying jobs--consumers are seeing lower energy prices.
A 2015 Harvard Business School study found that fracking and the shale energy boom it prompted helped consumers save $780 in energy costs, and that savings is expected to rise to $1,070 by 2030.
Also, residential electricity prices are on pace to fall for the first time since 2002.
Continuing this positive trend requires better energy policies. For instance, we need speedy federal regulatory approvals to allow the natural gas exports to non-FTA nations like Japan and China.
Earlier this year, both the House of Representatives and the Senate passed their own energy bills that include LNG export application streamlining. After months of little activity, the conference committee should finish their work and get a final bill to the president for his signature.
Also, regulatory agencies need to streamline how they permit safe energy infrastructure projects like pipelines to prevent them from being bogged down in red tape.
As David Taylor, president of the Pennsylvania Manufacturers’ Association, wrote in a letter to Federal Energy Regulatory Commission supporting the Atlantic Sunrise natural gas pipeline project:
We must be able to transport the gas to refine it, manufacturer other products from it, and then export it to our friends and allies throughout the world. Only with more pipeline infrastructure can our global leadership flourish.
The Permitting Dashboard created through the Fixing America’s Surface Transportation (FAST) Act is designed to promote transparency and accountability and speed up permitting for infrastructure projects like oil and natural gas pipelines.
With good policies in place, we can keep U.S. energy exports on its healthy, job-creating path.
Does America need an "All of the Above" energy strategy? Find out here. This Chamber Explainer will get you up to speed.
Opponents of the Dakota Access Pipeline (DAPL) launched a series of protests across the country.
Driven by “Keep it in the ground,” anti-energy extremists like Bill McKibben, this “Day of Action” included blocking railroad tracks, spray paint vandalism, reports of tires slashed, and arrests in North Dakota and elsewhere.
It’s ironic, because protesters have witnessed much federal inaction.
The latest happened on Monday, when the Army Corps of Engineers refused to issue an easement to Energy Transfer Partners, the company building the pipeline, to dig under the Missouri River in North Dakota. The Corps said it needs to take more time for “additional discussion” with the Standing Rock Sioux Tribe. Meaning, protesters who had years to make their case, as even a federal judge noted—get to delay the project further.
This despite pipeline owners following the rules and the Corps signing off on most of the project in July.
In its letter to Energy Transfer Partners announcing the delay, the Corps notes it “concluded that its previous decisions comported with legal requirements” [emphasis mine]. The rules were followed.
But if that's the case, what's there left to legally consider? If the project passed muster--and it did, or it wouldn't have been permitted in July--then why is the Corps delaying this project to consider other issues?
— Steve Everley (@saeverley) November 15, 2016
As I wrote a few weeks ago when President Barack Obama said the Corps was looking at ways to re-route the pipeline:
The pipeline’s builders, Energy Transfer Partners, did what they were supposed to do: They worked with state and federal regulators, applied for the appropriate permits, held local hearings with people concerned about the project—including Native American tribes—and spent years making adjustments to the pipeline’s route after hearing concerns—140 times in North Dakota alone(!) to preserve cultural sites and minimize environmental harm.
After following the rules, all state and federal permits were acquired (including from the Army Corps of Engineers). Energy Transfer Partners was awaiting a final easement from the Army Corp to go under the Missouri River, so building started.
We’re more than three-quarters through the game and President Obama thinks it’s ok to pull a Lucy and yank the football away from billions of dollars of investment and thousands of jobs by changing the rules of the game. We’re long past the point of no return for a project that went by the book.
Mollifying opponents of the rule of law will only inspire more lawlessness.
“The more that the administration appeases protestors who are interfering with legal activity, the more they will embolden future protests to disrupt our economy,” said Karen Harbert, President and CEO of the U.S. Chamber’s Institute for 21st Century Energy. “One clear message from election day is that the American people want programs and policies that will put them back to work, not endless studies and delay.”
Labor unions concurred that agency inaction simply encourages anti-energy extremists. The Corps’ decision "will only further enflame protesters who have no regard for the rule of law, and will continue to intimidate workers, threaten acts of violence, and resist lawful removal by police,” Chad Carter of IUOE Local 234 in North Dakota said. “This decision undermining of the regulatory review process represents a threat to the future of infrastructure projects, and the future of American jobs for years to come."
— Energy Institute (@Energy21) November 15, 2016
Energy Transfer Partners filed suit in Washington, D.C., to force the Corps to allow construction under the river.
And if the delay extends until 2017, it’s expected President-Elect Donald Trump’s administration would allow the project to be completed.
With the need for improving America’s energy infrastructure growing, senseless delays like this when companies follow the rules will only hold back the economic progress Americans crave. The incoming administration should respect the rule of law and ensure that needed infrastructure projects are permitted in a timely manner.