If we are to realize this future, though, we must act in a manner – from both a policy and business investment standpoint – that recognizes and incorporates the realities of our role in a global energy economy. And we must be mindful of and resistant to those policies which take us backward.
The nation’s booming natural gas industry is poised to serve as a telling proving ground for American energy policy in the coming years – and an effective reminder of how recent and complete the United States’ energy resurgence has been.
As recently as 2007, the United States was making plans to expand imports of natural gas. Now, with new resources coming on stream each day through advanced technological innovation , the situation is inverted. The Department of Energy is reviewing 20 applications for liquefied natural gas (LNG) export terminals. American natural gas, shipped in liquefied form on tankers, should find ready buyers in Europe and Asia where natural gas is more costly. In many places it’s nearly triple U.S. prices.
This is a revolutionary change with long-term positive implications well beyond the huge investments in export facilities planned by energy producers.
Unfortunately, some U.S. companies are lobbying against free trade of natural gas. These companies are lobbying for their own self-interest, not that of the country. They are ignoring the fact that LNG exports are likely to have a “minimal” effect on domestic prices. A recent study by National Economic Research Associates, sponsored by the U.S. Department of Energy, concluded that LNG exports would lead to significant net economic benefits for the U.S. economy.
Even if natural gas prices rise from current relatively low levels, producers will boost natural gas supplies thereby mitigating “the price impact of exports.”
The Council on Foreign Relations predicts that if U.S. suppliers were able to maximize their exports, it could mean “north of $10 billion a year” to the U.S. economy and upwards of 60,000 long-term jobs in the natural gas industry and throughout the supply chain.
Natural gas supply abundance is a game-changing development that will offer Americans less dependence on imported energy. With massive new investments in shale gas and LNG exports, we’ll realize the potential of stronger trade and a boost to domestic manufacturers with lower energy costs. And that will happen because, even with LNG exports, we’ll remain in an energy surplus mode.
I’m optimistic that technology and innovation, coupled with sound government energy, environmental and trade policy, can result in the key economic driver we need to boost our economy and create hundreds of thousands of good American jobs.
Caruso is a senior adviser in the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington, DC. He is a former administrator of the Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy (DOE).