Changing energy dynamics are reshaping America’s energy future and creating a new era of possibility for U.S. consumers and businesses. This new energy future is reinvigorating American manufacturing, creating new jobs and driving economic growth, and it is saving Americans billions in heating and cooling bills — $1,200 per year on average according to IHS.
Just a decade ago, manufacturing jobs were something that existed overseas, not here at home. But that was before America’s oil and gas industry discovered new ways to affordably access the vast sums of natural gas right beneath our feet. Now America has an amazing competitive advantage — and this new energy bounty is fueling a manufacturing renaissance across the country.
This natural gas bounty is so large that American energy and feedstock costs are actually now competitive with those in the Middle East. Because of that, foreign and domestic investments in new infrastructure are skyrocketing as businesses look to take advantage of stable, affordable energy costs. At last count, more than $100 billion in private investment is planned in new manufacturing projects, and more is on the way.
Unfortunately, in the absence of a comprehensive national energy policy none of these outcomes are guaranteed as of yet. Lacking a defined energy strategy, many in Congress are too quick to respond to rapid geopolitical change with short-term insight, which, however well-intentioned, can lead to lasting long-term negative effects. Most recently, a number of politicians proposed the U.S. accelerate efforts to send liquefied natural gas abroad — to Europe in particular — as a gesture to countries that have suddenly realized they are over-dependent on energy from an unpredictable Russia.
There is a better way. Current law requires the Department of Energy to weigh the public interest when considering applications to export LNG to countries that have not, or will not, enter into free trade agreements with the United States. In the past year, the Energy Department has done just that, approving six applications to export a total of more than 9 billion cubic feet of gas per day. That is more than 10 percent of current U.S. consumption, and 50 percent more LNG than NATO imports today. Is it really too much to ask that the domestic impacts of such exports are at least considered in the process? And is an average of 60 days per application really too long for such an important review? Lawmakers who propose to throw aside the current process care more about the European consumer than the American consumer.
In fact, there is good reason to believe exporting too much too fast will do far more harm than good to this country. It will cause energy prices to rise. It will weaken or even halt the manufacturing resurgence. It will jeopardize billions in already committed investments and the jobs that come with them. And it will, without a doubt, cause every one of us to pay more to heat or cool our homes.
Even the U.S. trade representative believes that automatically approving all export applications is short-sighted, as it fundamentally undercuts the considerable leverage our negotiators have as they work to open foreign markets to American goods. What’s more, because no export facilities currently exist, even with automatic approval it will be years before any American LNG reaches Europe’s shores. Is threatening U.S. jobs and economic growth really the best way to send a message to Europe?
Why would we risk our best competitive advantage — inexpensive energy — by thoughtlessly shipping it abroad? Today Europe has a vast energy potential that it is choosing not to tap by stridently opposing energy technologies, such as hydraulic fracturing. Asking the United States for its natural gas when they are unwilling to develop their own is not the solution. Instead, European countries need to get serious about developing their current energy resources by utilizing horizontal drilling to tap their own reserves of natural gas and re-embracing nuclear energy.
In other words, Europe needs to replicate what the United States did to create this energy boom. Liquid natural gas imports did not make America more energy competitive; half a dozen LNG import terminals barely operate along the East Coast today. It was exploration and new infrastructure, enabled by federal and state law that made the United States the new energy giant.
These policies are well known and available to Europe right now, but they require courage, leadership and a conscious decision to take control of their energy future — not simply depend on the United States to come to their rescue.
The simple fact is that all sides can win in this energy future. A continued thoughtful approach to exports will nurture economic and job growth at home and still help the oil and gas companies compete in international energy markets. And, most importantly, profits from exports will come from overseas buyers, not the American consumer.
Jim Fitterling is executive vice president of Feedstocks, Performance Plastics and Supply Chain for The Dow Chemical Co.