Two weeks ago, the U.S. Department of Energy proposed changes to its process for review of Liquefied Natural Gas export applications to non-free trade agreement countries.
Good idea, but this procedural change only further muddies the water on next steps for these applications.
The DOE action merely highlights the need for legislation to set clear rules and timelines on the DOE and streamline project approvals.
Fortunately, the House of Representatives will soon be considering the “Domestic Prosperity and Global Freedom Act,”a bipartisan-supported bill that would require the DOE to approve LNG export applications within 90 days of the end of the comment period or after the enactment of the new legislation.
This legislation reflects the significant shift in market dynamics that has occurred over the past few years. Only five years ago, there were 47 applications for LNG import terminals pending due to the major and growing shortage of domestic gas and a stagnant energy market.
Today’s energy landscape stands in stark contrast; the U.S. Energy Information Agency reports that energy imports are at historic lows; and estimates show that natural gas production far outstrips domestic demand by 2035.
The U.S. is poised to become a top exporter of LNG, resulting in significant economic benefits to the nation. An updated analysis of the 2012 NERA Economic Consulting study for the Department of Energy found that LNG exports would have “net economic benefits” in every export scenario, could contribute as much as $86 billion to GDP in 2038 and potentially add up to $60 billion to U.S. trade balance.
LNG exports would also help the U.S. to strengthen global energy security amid confrontation from Russia, Iran and several other nations. Opening global markets to American natural gas would diversify our allies’ options and prevent future market disruptions. By enacting policies now, we can set the standard for a more stable global market in the future.
The changing energy landscape is a reality, yet America’s ability to realize the huge economic and geopolitical benefits is not guaranteed.
Some groups and companies are working hard to undermine LNG exports despite its clear benefits to the nation and our allies and trading partners. Those cynical “me first” companies argue that LNG exports will cause consumers to feel the pain in their wallets, when no credible analysis comes to any such conclusion. Opening global markets to American LNG provides certainty to the LNG market and will sustain growing demand that will drive continued investment in natural gas production.
For the sake of logic and the good of the nation, legislators should update the antiquated regulatory framework that limits American energy exports.