A bipartisan push for stepped-up natural gas production and export, via hydrofracking and more liquefied natural gas export terminals, was evident at a recent hearing held by the Senate Energy and Natural Resources Committee. Concerns about greenhouse gas emissions and climate change took a back seat. A couple of Democratic Senators questioned the economic benefits of promoting LNG exports.
A Senate Energy and Natural Resources full committee hearing on June 19, on “How to harness a game-changing resource for export, domestic consumption, and transportation fuel” (archived webcast and witness written testimony here) focused first and foremost on a push for expediting increased export of domestically produced natural gas to the world market.
The Committee heard from a representative of the Department of Energy fossil energy office and witnesses from industry and think tanks on what has been referred to as the potential for dramatically expanded natural gas development to have “game changing” effects on U.S. energy supply and security and global energy markets. The hearing focused particularly on issues of U.S. LNG exports. Committee Chair Mary Landrieu (D-Louisiana) and Ranking Member Lisa Murkowski (R-Alaska) both represent gas-producng states and both pushed on the DOE witness with reference to getting the agency to expedite permitting of proposed LNG export terminals. DOE shares this approval jurisdiction with the Federal Energy Regulatory Commisssion (FERC).
Committee member Mark Udall (D-Colorado), also from a gas-producing state and under pressure from industry and his opponent in a very competitive re-election campaign, has introduced legislation (S. 2494) that would require faster LNG export decisions on DOE’s part. The DOE official said it was feasible to complete reviews of LNG export licenses within the 45-day window required by the legislation.
The Energy and Natural Resources Committee tends to be dominated by Senators who are close to corporate energy production interests in their states, or whose states include large areas of federally owned land. For example, West Virginia, North Dakota, Wyoming, New Mexico, Utah, and Nevada also have members on this committee. The essential thrust of much of this hearing was to gain greater market share for U.S. natural gas production interests in the growing global market. Low-cost natural gas, it was argued, could give U.S. energy interests a competitive edge in supplying gas to Asia and Europe, where the price of gas currently tends to be much higher. It was argued that the available U.S. supply is now understood to be so vast that it would be possible, as long as government impediments are removed, to ramp up production sufficiently to satisfy both domestic needs while growing the export market.
The Senators’ push on the executive branch to move faster to ramp up natural gas exports doesn’t seem likely to meet resistance in the Obama administration. Support for fuel-switching to natural gas, both in the U.S. and globally, is an important component of President Obama’s Climate Action Plan, both for meeting a near-term U.S. emissions reduction target and as a matter of foreign policy. The Climate Action Plan includes this:
[T]he Obama Administration is partnering with states and private companies to exchange lessons learned with our international partners on responsible development of natural gas resources. We have launched the Unconventional Gas Technical Engagement Program to share best practices on issues such as water management, methane emissions, air quality, permitting, contracting, and pricing to help increase global gas supplies and facilitate development of the associated infrastructure that brings them to market. Going forward, we will promote fuel-switching from coal to gas for electricity production and encourage the development of a global market for gas. Since heavy-duty vehicles are expected to account for 40 percent of increased oil use through 2030, we will encourage the adoption of heavy duty natural gas vehicles as well.
Some of the Democrats on the Committee, however, raised serious concerns about exporting natural gas. Sen. Tammy Baldwin (Wisconsin), a progressive with a lot on the ball, noting that low energy prices are driving significant gains for the U.S. economy, questioned the trade-offs between expanded LNG exports and the needs of U.S. consumers and domestically based manufacturing. She cited a study on this issue released by Charles River Associates in 2013, that concluded:
• US manufacturing contributes more to GDP, employment, and to the reduction of the trade deficit as compared to LNG exports at a commensurate level of natural gas use.
• A global LNG supply shortage of 20-35 billion cubic feet per day by 2030 is projected, and US exports would likely play a major role in filling the gap, which in turn could lead to a tripling of natural gas prices from current levels by 2030.
• Manufacturing is highly sensitive to natural gas prices, and a significant portion of the US manufacturing sector is exposed to impacts from projected increased natural gas prices.
• Current expectations for a low cost, gas-driven electricity economy and significant deployment of natural gas vehicles could be foregone due to LNG exports.
In other words, the study concludes that using a unit of natural gas in the U.S. adds more to the economy, creates more jobs, and does more to hold down gas prices for consumers than when the gas is exported.
Sen. Debbie Stabenow (D-Michigan), noting the U.S. competitive advantage with low energy costs from increased natural gas production, asked: “Why would we give that up? … I can’t think of why anyone who doesn’t own an oil or gas company would think it’s a good idea to give up our huge advantage in natural gas prices.”
Marty Durbin, President and CEO of America’s Natural Gas Alliance, representing natural gas producer interests, countered that the resource is enormous and the ability to produce it at affordable prices is improving steadily, so “we can continue to have our gas and export it too.”
Dan Weiss from the Center for American Progress noted in his very substantive testimony (worth reading) that DOE’s June 4 proposal to streamline the public interest determination process “does not ensure that the economic and climate effects become primary criterion for ‘evaluating the public interest’ of LNG export applications.” He said:
It is irresponsible to discuss energy policies without consideration of the potential contributions to climate change. Recent scientific reports continue to sound even louder alarms about the threat to public health and our environment from unchecked carbon, methane, and other climate pollution. …
So we must assess the potential impact of LNG exports on U.S. climate pollution. It’s well documented that fracking to produce shale gas generates fugitive methane, which is the main component of natural gas. Methane is a potent climate pollutant, which has 86 times more warming potential than carbon dioxide pollution over a 20-year time period. … Oil and gas production is the second largest source of domestic methane pollution, responsible for nearly 30 percent of it. …
If LNG exports drive an increase in natural gas production – as many predict — this could also spark growth in methane pollution unless strict limits are set to reduce it during the production and transportation phases. This concern led the EPA to urge FERC “to consider greenhouse gas impacts from increased U.S. natural gas drilling in its environmental review of a natural gas export terminal in Louisiana.” …
Ignoring the potential increase in methane pollution from additional gas production driven by LNG exports won’t make climate change go away – it will only make its impacts more deadly, destructive, and expensive.
DOE, too, must also assess the potential increase in methane pollution when reviewing pending LNG export applications. This evaluation should factor in the cumulative increase in natural gas production from all of the LNG export applications already approved, as well as the impact of the growth in gas production due to additional exports.
At the tail end of the hearing, Sen. Landrieu asked Weiss about the contention that there is little difference in greenhouse gas emissions between regionally produced coal in Europe and Asia and use of U.S.-exported LNG. Finally, climate change made it’s appearance. Landrieu, sounding perhaps a bit puzzled by this charge, said DOE’s National Energy Technology Laboratory concluded that substituting exported U.S. LNG would reduce GHG emissions in Europe and Asia relative to use of regionally produced coal. Weiss said that, while natural gas burns cleaner, the NETL study concluded that the end-to-end emissions involved in moving U.S. natural gas to an LNG export facility, then liquefying it, then shipping it across the ocean, then de-liquefying it, and shipping it to users in other countries, would be as energy and emissions intensive, or more, than using regionally produced coal — i.e., because of the LNG export supply chain, it has no advantage over coal.
Landrieu asked Chris Smith, the DOE witness, to resolve this. Smith said: “The study says LNG won’t increase emissions.” How’s that for a bureaucratic formulation from a representative of a pro-LNG administration that also wants to be seen as really serious about climate change?
Even Landrieu, who is very pro-fossil fuel industry, had to call him on it. “But will it reduce them?”
There are various scenarios, he said. Most say LNG will have a net reduction. The draft study is out for public review.
The relevant text from Weiss’s written testimony:
Some proponents of additional LNG exports argue that they would benefit the climate by replacing dirty coal-fueled electricity produced in Asia and Europe. Natural gas combustion for electricity emits only half of the carbon pollution compared to coal combustion. However, the National Energy Technical Laboratory’s (or NETL) just released “Life Cycle GHG Perspective on Exporting LNG from the U.S.” found that there are 50 percent more emissions from the natural gas export supply chain compared to coal’s supply chain, offsetting the gains due to lower pollution from combustion. Thus, the NETL analysis concluded that there was little difference in the total amount of life cycle climate pollution between “U.S. LNG exports for power production in European and Asian markets… when compared to regional coal extraction and consumption for power production.”
Exporting LNG would convert a relatively clean fuel to one with similar emissions levels to coal. At a time when we must sharply reduce climate pollution, we can little afford such a result. LNG export proponents cannot claim that more exports will lower overseas climate pollution because NETL debunked this notion. [emphasis added]
On the subject of the NETL report, Steven Mufson in the Washington Post Wonkblog had this (“Washington Post Wonkblog: Exporting U.S. natural gas isn’t as ‘clean’ as you think“):
Critics of LNG exports say that the report buttresses their arguments. Mike Tidwell, director of the Chesapeake Climate Action, which is trying to block a Dominion Resources-owned LNG export terminal in Cove Point, Md., said that the report would cast LNG exports in an even worse light if it used what he called more realistic leakage estimates for U.S. production and pipeline transportation.
“If their analysis is overlaid with more realistic foreign and domestic leakage assumptions, it becomes clear that the immediate climate impacts of LNG would be much worse for the climate than coal if exports began today,” he said.
Bill Gibbons, an Energy Department spokesman, pointed to the report’s conclusion, which did not highlight any harm from a climate standpoint. But the conclusion also does not assert substantial benefits.
It says “that the use of U.S. LNG exports for power production in European and Asian markets will not increase GHG emissions, on a life cycle perspective, when compared to regional coal extraction and consumption for power production.” It added that “no significant increase or decrease in net climate impact is anticipated from any of these scenarios.”
I believe this raises an essential issue, one that challenges the basis of the natural gas export component of Obama’s Climate Action Plan. And, except for one question from Sen. Landrieu, it almost entirely escaped the attention of the Committee members at the hearing.
Joe Romm, Climate Progress: Up To A Million Abandoned Wells In Pennsylvania Spew Heat-Trapping Methane
Joe Romm at Climate Progress: Bridge Or Gangplank? Study Finds Methane Leakage From Gas Fields High Enough To Gut Climate Benefit
Mike Tidwell, Chesapeake Climate Action Network: Fracked Gas, A Climate Disaster