National Center for Energy Analytics’ Post

Transcript

As our planet becomes more electrified and industrialized, demand for all energy increases. America has an advantage in natural gas, but too many politicized regulations threaten our dominance. We use natural gas in two principal ways, 1 to generate electricity and two for value added products like feedstock and plastics. Both uses have increased a made record production in the US when natural gas is extracted from. Earth. It's in its gaseous state. Pipelines move it to houses, to factories, or to Canada and Mexico. But exporting it overseas requires converting it to liquid natural gas form, or LNG for short. This involves cooling it down to 260�� below 0 Fahrenheit, so it takes up less space and is safer to move around on specialized ships. The United States is a global leader in LNG exports, both thanks to recent technological advances allowing access to massive reserves and to billions of dollars invested in high tech export facilities. American gas is produced safely by skilled labor, which cannot be said of all producers overseas. Unlike fueled like diesel, gasoline and propane, LNG exports are tightly regulated, and those regulations have become more political than economic in nature's laws from as far back as 1938 allow regulators to play games, threatening America's once in a generation opportunity to respond to the increasing global demand for LNG. America's first LNG facility, based in Alaska with fuel bound for Japan, was approved in 1967. The authorization was less than 3 pages. Today's application is thousands of pages, including economic and environmental impact analysis. The license itself can be more than 100 pages long. Cumbersome licensing comes with tightly regulated businesses, but when permits can be rescinded, encumbered with new requirements, or with hell for political reasons, application and licensing costs are too steep. In early 2024, the Biden administration paused regulatory decisions on LNG exports to most countries. The same thing happened in 2012. The projects waiting for paperwork are simply frozen, and so too is future growth. While the global market for LNG skyrockets due to electrification and industrialization, regulatory uncertainty threatens America's position as the world's top LNG exporter. Businesses and investors need to trust their permits, not wonder if shifting political winds will suddenly knock projects off course. Three important reforms will ensure America's leadership in this space. First, lift the Biden administration's pause on LNG exports decisions as soon as possible. Constructing LNG export facilities requires years delays, and decisions today will continue to impact American exporters far into the future. 2nd, streamline the federal government's export approval process for LNG options, such as creating new categories for pre-approved exports and even removing the Department of Energy from the equation altogether. Should all be on the table. Finally, depoliticize the Federal Energy Regulatory Commission's environmental reviews of LNG export facilities. Rather than letting its analysis stray into climate change impacts, the Commission should focus on its core mission instead technical reviews of energy infrastructure and ensuring the reliability of US electricity grids. An energy dominant America with trustworthy permits and contracts is one in which, among other things, strong and fair trade relationships can be established. This enables us to compete with our adversaries and help our allies. A rational export policy will keep natural gas supply high so that all sectors benefit, not just LNG exports, whether it's gas as feedstock for American manufacturing or fuel for electric generation after all. The gas will be produced somewhere and by somebody. And if that's in America and by Americans, that's a good thing. To learn more, go to lngenergyanalytics.org.