LNG is a commonly used acronym for liquefied natural gas, essentially natural gas that is put into liquid form, often for the purpose of transportation.
For international trade, LNG is sent in insulated tanker ships using refrigeration that keeps the liquefied natural gas at a chilly -260 degrees Fahrenheit. Global shipments travel to receiving terminals on a daily basis where pipelines are then used to provide this clean-burning energy source to homes, schools, businesses and government buildings. More receiving terminals are being built around the world each year.
In the U.S. there is growing debate over LNG exports, some of which could come from the Marcellus and Utica shale formations found in Pennsylvania, West Virginia and Ohio.
The Energy Information Administration estimates that in just three years natural gas supply could exceed demand, allowing the U.S. to be a net exporter of LNG. Bipartisan support for such exports has grown to include local and national politicians; most recently, more than 100 members of the House of Representatives signed onto a letter to Department of Energy Secretary Steven Chu that asked the Obama administration for advance LNG exports without delay.
Eleven Pennsylvania members of Congress signed this letter: Mike Kelly, Mike Doyle, Keith Rothfus, Lou Barletta, Tom Marino, Bill Shuster, Glenn Thompson, Joe Pitts, Charlie Dent, Mike Fitzpatrick and Pat Meehan.
But not so fast, says America’s Energy Advantage, a recently formed campaign aimed at blocking exports of American natural gas.
The AEA campaign, funded in part by Alcoa, an aluminum producer, and Dow, a multinational chemical company, contends that LNG exports would raise domestic energy prices and put at risk around $90 billion in potential capital spending by the U.S. manufacturing sector.
There is, however, one small problem with their argument. First a new, in-depth report from the Department of Energy tells a different story. And, most importantly, Dow earlier wrote to the energy department arguing that LNG exports would not lead to significant price increases as the company advocated for its Freeport LNG terminal.
The energy department’s analysis determines that exporting LNG outweighs the risk of potentially higher domestic gas prices. Furthermore, the analysis finds a direct correlation between the economy and exports: The more LNG exported, the greater the economic benefit for the U.S.
Ultimately, limiting the production of domestic shale gas resources — by blocking exports — would isolate the U.S. from global energy markets, slow natural gas development that is helping drive our economic recovery and result in more volatile energy prices for American consumers. Free trade of LNG, however, would deliver a much-needed boost to the American economy and maintain the strong job growth seen in the natural gas industry.
Liquefied natural gas exports would allow for significant economic growth in the Keystone State and across the U.S. by encouraging natural gas development.
While natural gas development has already created hundreds of thousands of jobs and given Pennsylvania real hope, there is certainly more work to be done. Let’s not forget that around 500,000 people are still unemployed in cities and towns around the state, families in desperate need of income and an opportunity.
As the debate unfolds, there will almost certainly continue to be a small but vocal group of detractors. Thankfully there is also a great deal of support for LNG within the public, the business community and among policymakers.
What most Americans understand is that natural gas development is critical to job creation, and to generating revenue for both businesses and state government. Natural gas production in Pennsylvania and in many regions of the U.S. has proven to be immensely successful. Now just think of the possibilities once U.S. natural gas begins to enter international markets.
Guest Columnist Jack Rafuse is principal of the Rafuse Organization, a consulting group in Alexandria, Va., and a former White House energy adviser in the Nixon administration.
Nothing should be considered as an attempt to aid or hinder the passage of any legislation.
The views expressed here are those of the author and not necessarily those of the Susquehanna Valley Center.