March 20 2014
National Review Online
Jillian Kay Melchior
The same environmental groups that fought construction of Keystone XL are launching a new effort to prevent the United States from exporting natural gas. If they are as successful in this endeavor as they have been in delaying the pipeline, the consequences will not be limited to the U.S. economy. Preventing American natural-gas producers from doing business overseas will hamper U.S. foreign-policy goals and slow environmental progress worldwide.
On Tuesday, the Sierra Club, 350.org, and 14 other environmental groups wrote to President Obama, claiming that exports of liquefied natural gas would contribute to global warming. They called on him to oppose the exports and — “as a good-faith test case in this direction” — urged him to require the Federal Energy Regulatory Commission to conduct an in-depth study on the environmental impact of Maryland’s Cove Point export facility.
When projects can’t be killed outright, they can be slowly asphyxiated through years of laborious, redundant, and soporific study and review, as Keystone XL has proven. It doesn’t matter that, after five rounds of intense study, the State Department has still concluded that the pipeline would not have a significant environmental impact; it matters that, as the research dragged on, the pipeline was neither approved nor built. Green groups are trying out the same stalling tactics in their effort to prevent natural-gas exports.
But the timing of the anti-export letter is particularly gauche, given that Russian president Vladimir Putin has used his country’s energy wealth to support his aggressive foreign policy.
Michael Brune, the Sierra Club’s radical executive director, claimed that “this letter is not in response to what’s happening in Crimea. But clearly it’s a big part of the conversation. The idea that U.S. gas exports could address the human-rights abuses that we’re seeing in Crimea reflects a lack of comprehension and lack of vision.”
Unlike Brune, Putin realizes that energy is a powerful tool. In 2012, just over a third of Europe’s natural-gas imports derived from Russia (most of that travels through Ukraine). The Kremlin-run Gazprom alone accounts for one-fourth of all natural gas used in the European Union. Ukraine itself gets 70 percent of its gas from Russia, and other Eastern Europeans are even more reliant.
In 2009, 2008, and 2006, Putin turned off the taps, cutting natural gas that flows through Ukrainian pipelines and causing major energy disruptions there and beyond. And last fall, as Moldova drew closer to Europe, Russia’s deputy prime minister threatened, “Energy supplies are important in the run-up to winter. I hope you won’t freeze.”
But now, the United States has unprecedented potential to change the energy equation in Europe. This nation recently surpassed Russia as the top natural-gas producer on the planet, and though American exports of natural gas would begin in 2015 at the very earliest, they have the potential to cut Russia’s exports by 25 percent, according to some estimates. Sending American natural gas abroad would help weaken the energy hold Putin has on Ukraine, and on Europe as a whole.
Contrary to what radical green activists claim, hastening the export of American natural gas would also contribute to a better environment worldwide. Already, in 2012, the United States saw its lowest energy-related carbon-dioxide emissions in two decades — which the Energy Information Administration attributed in large part to the replacement of dirtier coal-energy sources with natural gas.
In fact, natural gas is far cleaner than any of the other traditional energy sources. ExxonMobil predicts it will overtake coal to become the second most common energy source in the world internationally, and because natural gas produces half the emissions that coal does, this development could well result in cleaner air worldwide. The United States can expedite these benefits by opening its natural-gas supplies up to international markets.
Moreover, selling American liquefied natural gas abroad will also strengthen the economy here at home, reducing the trade deficit (which, in December, was almost $39 billion) and bringing the U.S. closer to President Obama’s goal of doubling exports by 2015.
A 2012 study from the Department of Energy and NERA Economic Consulting found that across all market scenarios examined, “the U.S. was projected to gain net economic benefits from allowing [liquefied natural gas] exports. . . . In particular, scenarios with unlimited exports always had higher net economic benefits than corresponding cases with limited exports.”
The study found that even if exports caused increases in natural-gas prices, they were more than offset by other economic gains. “The net result is an increase in U.S. households’ real income and welfare,” the report concluded. The American Petroleum Institute has estimated that by 2035, liquefied-natural-gas exports could add $115 billion to the gross domestic product and result in a net gain of 665,000 jobs.
Environmental groups’ opposition to natural-gas exports is founded not in facts but instead in a knee-jerk aversion to any traditional energy source. Nevertheless, their groundless activism is dangerous, potentially affecting at least three key policy fields. If they succeed at obstructing natural-gas exports as they have thus far succeeded in obstructing Keystone XL, it will impede America’s ability to achieve its foreign-policy, environmental, and economic goals.
— Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow at the Independent Women’s Forum.