Why the Debate Over U.S. LNG Exports Has Been Won
The debate over natural gas exports appears to be over. On September 10, the U.S. Department of Energy approved two more export terminals for liquefied natural gas (LNG) and it barely made any news. The decision means that there are now three projects that have cleared all hurdles, allowing construction to begin. More are in the offing. The Obama administration has shown itself entirely open to idea of exporting LNG, even though it prefers a gradual and deliberate approach rather than the blanket approval favored by the oil and gas industry.
Environmental groups have opposed exports, arguing that opening up the U.S. to foreign energy markets would increase demand and thereby potentially lead to the dramatic increase in domestic drilling. While true, this argument seems to have garnered little traction in Congress, the administration, or with the wider public.
To be sure, there are polls that indicate that the public is not entirely sold on LNG exports. One University of Texas poll from 2013 shows the balance tilted in favor of Americans opposed to allowing exports of natural gas; 39 percent opposed compared to 28 percent who approved. But that doesn’t mean Americans are passionate about it. In fact, the Obama administration and Congressional Democrats have received little blowback for the LNG projects that have received approval. With tacit or overt support from Democrats, the LNG issue has largely been won by export supporters.
For example, Senator Mark Udall, who’s better known for his passionate support of wind power, introduced a bill earlier this year to expand LNG exports. In an election year, he has been careful not to be outdone by his unabashedly pro-export Republican opponent. Another example can be found in Maryland. Despite being an overwhelmingly blue state with a relatively strong environmental record, even Democratic politicians have come out in favor of a proposed LNG export terminal on the Chesapeake Bay. The Cove Point facility is still in permitting phase, but Governor Marin O’Malley has hinted at his support for the project — to the dismay of environmental groups.
Congressman Steny Hoyer (D-MD), a powerful Democrat in the U.S. House of Representatives, has been much more vocal in his support. “The proposed Cove Point LNG liquefaction project has the potential to make a significant contribution to Southern Maryland’s economy. Today’s announcement helps to ensure the project’s viability and moves us closer to the job creation that its development is expected to bring to Calvert County and to Maryland,” Hoyer said in a press release when Dominion secured agreements from overseas customers to buy its LNG.
Then there are the much more pro-fossil fuel Democrats. For example, Senator Mary Landrieu (D-LA), the Chair of the Senate Energy Committee, predictably praised the approval of the two LNG licenses on September 10. Even Senator Ron Wyden (D-OR), an LNG export skeptic and former head of the Senate Energy Committee, has charted a middle course in the past, favoring a moderate amount of exports.
Perhaps more importantly, the undeclared front runner in the 2016 presidential race, Hillary Clinton, supports exporting LNG. In a recent speech she gave on energy, she discussed the benefits of exporting natural gas and oil. Revealingly, as Secretary of State, Hillary Clinton also headed up a global initiative to sell other countries on hydraulic fracturing within their borders. She met with leaders in several Eastern European countries, pressuring them to allow American companies to drill for shale gas, according to Mother Jones. As the likely standard bearer of the Democratic Party in 2016, her support for natural gas exports and fracking will make it difficult for environmental groups to block the strong momentum in favor of expanding gas development.
The pace of export approvals could accelerate, rather than slow down. The approval of two more LNG export licenses received support — though muted — from Republicans, who applauded the move but urged swifter approval process. Senator John Hoeven (R-ND) has announced plans to co-author bipartisan legislation that would make it much easier for companies to receive licenses.
So, with many prominent Democrats co-opted into the pro-LNG export camp, including the current Democratic president and the likely future Democratic presidential candidate, there’s little left to debate — except maybe how many terminals will be approved and how quickly.
Originally written for OilPrice.com, a website that focuses on news and analysis on topics of alternative energy, geopolitics, and oil and gas. OilPrice.com is written for an educated audience that includes investors, fund managers, resource bankers, traders, and energy market professionals around the world.