Natural Gas is Transforming The World And The U.S. Must Keep Up

Tuesday, September 10, 2019

Bill Godsey | Dallas Morning News | September 1, 2019

If you ask millennials what they know about the 1970s, their answers are unlikely to include the nation's scarce energy supply. Yet many older Americans can easily recall long gas lines or "oil price shock" from turmoil overseas during that time when U.S. energy policy was synonymous with foreign suppliers, dependency and shortages.

Over the ensuing decades, however, the United States has turned its energy outlook upside-down. As a result of impressive domestic shale development, the U.S. is on the cusp of becoming a net-energy exporter next year, according to the U.S. Energy Information Administration. Natural gas and crude oil outputs are on track to reach record highs this year, beating previous bests set only a year ago.

It is through this new lens of the United States as a global energy leader that lawmakers considered the future of liquefied natural gas, or LNG, exports at a recent U.S. Senate hearing. Policymakers are right to be thinking about the evolution of the natural gas market and the economic growth it is catalyzing. Rather than shrinking back to a mentality of want, officials should lean in to this new frontier and evaluate how domestic resources can be leveraged abroad for our benefit as well as that of our allies.

Since the United States began shipping LNG overseas in 2016, 35 countries have received shipments, from China to South Africa. The result has been a reliable price floor that's allowed demand to remain sufficiently high to support continued growth, while still keeping costs down for American consumers. Moody's analysts forecast in the spring that in the absence of export markets, natural gas prices could "tumble."

For their part, private developers have stepped up to build out additional export capacity that can transport these valuable resources. Projects like the Port Arthur LNG and Corpus Christi LNG terminals in Texas along with the Driftwood LNG, Calcasieu Pass and Lake Charles terminals in Louisiana are helping to expand the networks necessary to move U.S. oil and natural gas to end markets in need.

 

Even so, construction of pipelines and processing facility, so-called midstream infrastructure, has not kept pace with production. In places like Texas' Permian Basin — one of the country's great energy success stories — output has outperformed pipeline capacity to the extent that drillers have had to burn off excess natural gas. The Wall Street Journal recently reported that the excess amount burned at wells each day is enough to power every home in the state.

In New York City, utility providers stopped accepting new natural gas customers earlier this year because of jammed supply lines, even though the nearby Marcellus Shale Formation is one of the country's greatest natural gas producers. That sad reality is a product of the state's rigid opposition to pipeline development and moratorium on production, both of which have kept the benefits of affordable fuels at bay and forced energy costs well above national averages.

Sadly, the same forces that put New York in an unenviable position are at work to disrupt infrastructure development across the country, and by any means necessary. Recently, activists have turned to spurious claims alleging LNG exports are harmful to the environment. These charges are misleading at best and damaging to progress.

Yet, that has become the new normal for many far-left groups. Rather than engage in earnest debate about the merits of traditional fuels and efficiency of renewables, some activists have resorted to scare tactics, public opinion campaigns, litigation and even sabotage. Some groups have turned against natural gas in their mission to keep fossil fuels in the ground. But let's not forget that only five years ago President Barack Obama, hardly an oil and gas cheerleader, called natural gas a "bridge fuel that can power our economy." That's a characterization that has proven accurate.

LNG exports are critical to the country's continued energy growth. Consider that exports are helping wean other countries off other fuels that are heavy emitters of carbon dioxide. And at the same time, these exports are creating American jobs, supporting manufacturing and business, and helping to keep costs low for consumers by sustaining U.S. production. In fact, a recent analysis by the Perryman Group found that around one in six jobs here in Texas is directly or indirectly supported by the energy industry.

Infrastructure development, both to move products internally and overseas, is vital to our nation's energy growth. Policymakers should put aside the political rhetoric and focus squarely on the evidence. Otherwise, rather than steering us to a brighter energy future, they risk returning the country to the scarcity and dependence of the past.

Bill Godsey is owner and president of Geo Logic Environmental Services and a former geologist for the Texas Railroad Commission. He wrote this column for The Dallas Morning News.