By Zack Colman - 09/25/12 12:53 AM EDT
Republicans are pointing to the Obama administration’s postponement of a natural-gas export study as evidence that the president’s support of natural gas is mostly talk with little action.
The Department of Energy (DOE) last week delayed the release of a report on the economics of exporting natural gas until after the election, citing complexities in analyzing the fragmented global natural-gas markets. The report, which is being compiled by a third-party contractor, was originally scheduled for release in March.
A bipartisan group of 44 lawmakers from Arkansas, Louisiana, Oklahoma and Texas sent a letter to Energy Secretary Steven Chu in August pushing him to expedite LNG export terminal approvals, but have yet to receive a response.
“I assume at this point that [President Obama] is just saying we’ll deal with that after the election. I’m asking the question, ‘Why?’ This is all held up in the executive branch,” Rep. James Lankford (R-Okla.), one of the letter signatories, told The Hill recently.
Democrats fear that selling more natural gas abroad would raise costs at home, and they cite an Energy Information Administration (EIA) report that found increased exports would raise electricity bills by an average of 1 to 3 percent annually between 2015 and 2035.
They also say it could cause environmental and health hazards by ramping up exploration through hydraulic fracturing, a process that injects a mixture of chemicals, water and sand into tight rock formations to release natural gas.
Rep. Edward Markey (Mass.), the top Democrat on the House Natural Resources Committee, has been an outspoken opponent of selling more liquefied natural gas to other countries.
“[Rep. Markey] believes that if we export large quantities of natural gas that we will also export jobs in manufacturing, and threaten our economic and national security advantages from this abundant, low-cost source of domestic energy,” committee spokesman Eben Burnham-Snyder told The Hill in a statement.
The EIA report concluded that the divide between low U.S. natural gas prices and higher-priced international markets would likely narrow in the coming years. It also said investment in LNG terminals would be costly.
The manufacturing sector, which consumes large amounts of electricity, could feel the price pinch from exporting natural gas.
The American Chemistry Council told The Hill it plans to "monitor the policy and regulatory landscape carefully" on LNG exports, stressed the importance of the energy source to U.S. manufacturers and noted that it has not asserted LNG exports will raise prices.
Rayola Dougher, an economist with the American Petroleum Institute (API), disputed the report that found LNG exports would raise electricity prices. Even if EIA’s projections were true, she said, the increases in electricity costs would be offset by job gains in the natural-gas sector.
Dougher said API has pressed Republicans and Democrats alike to boost natural-gas production, and accused the administration and its allies of engaging in “a lot of scaremongering” about exports.
Though firms can already export liquefied natural gas to nations with existing free trade agreements, deals with other countries require administration approval. So far, the administration has approved one non-free trade agreement export, with 12 others still under review.
DOE also has final say over exports, even to countries with which the U.S. has a free trade agreement in place. Those export projects must be deemed in the public interest to gain approval, which DOE said is generally granted to free-trade-agreement nations. Of 18 such applications, 13 have been approved, while five are pending.
Republicans want to accelerate that approval process, and they blame the sluggish pace on environmentalist interests that the GOP says have weighed too heavily on the administration’s decisions.
“In an effort to slow gas production, environmentalists are seeking to ban the export of domestically produced natural gas,” Rep. John Sullivan (R-Okla.), vice chairman of the House Energy and Commerce Subcommittee on Energy and Power, told The Hill in a statement. “Limiting the global market for American-made natural gas would dampen industry growth, leading to reduced domestic production, fewer jobs and higher energy prices.”
Correction: A previous version of this story contained incorrect information about the American Chemistry Council’s position on liquefied natural gas exports.