LNG Exports Will Bring Environmental and Other Benefits | Commentary

Posted October 31, 2014 at 3:35pm

A new wave of momentum is building behind expedited U.S. liquefied natural gas (LNG) exports as the European Union faces supply concerns heading into cold winter months.

With almost half of the EU’s primary energy consumption used for space and water heating, a disruption in supply has the ability to affect the homes and offices of a vast number of Europeans. In the midst of complicated negotiations, one thing is clear: The free trade of U.S. abundant oil and gas resources is a rational, mutually beneficial answer to help resolve European supply concerns and bolster the U.S. economy.

Europe’s ongoing focus on energy security and the United States’ continued abundance of oil and natural gas resources — together with recent signals from the Department of Energy that it understands the benefits of expediting permits for U.S. LNG export terminals — may lead to swift action on U.S. LNG exports.

Yet environmental groups have emerged in typical fashion citing purported negative environmental impacts of abundant U.S. natural gas. This new anti-natural-gas campaign is perfectly timed with midterm elections. Unfortunately, the distortion of facts in an attempt to halt the production of natural gas — a cleaner alternative fuel for power generation — can have serious economic and environmental consequences.

In a report recently released titled, “Setting the Record Straight on LNG Exports: Environmental Opposition Contradicts Studies on Natural Gas Realities,” I highlight the three main arguments touted by these groups and rebut them with the facts.

The first argument is that LNG exports will worsen trends in global GHG emissions. Such an assertion directly conflicts with multiple, non-partisan reports from the government and private sector. Use of natural gas for power generation has already reduced carbon emissions, by displacing coal in the U.S. and could provide the same benefit around the world through LNG exports.

A recent report by the Department of Energy’s National Energy Technology Laboratory concludes that, when comparing equal emissions scenarios, exporting U.S. LNG for power generation overseas would result in lower global greenhouse gas emissions compared to scenarios where regionally sourced coal is used for power generation. And more recent data for the natural gas liquefaction, storage, and ship loading process shows even greater environmental benefits.

The second myth perpetrated by environmental groups is the notion that potential impacts to the local environment means natural gas should not be developed for domestic or international use. Common concerns cited are groundwater impacts and methane emissions — yet mounting evidence demonstrates technological advancements and best practices are capturing more emissions each year and successfully protecting groundwater.

Since 1990, there has been a 90 percent drop in methane emissions as a direct result of technology upgrades according to the American Gas Association, and a recent EPA report shows that methane emissions as a result of hydraulic fracturing fell more than 70 percent between 2011 and 2013. Regarding groundwater safety, a study by the University of Michigan conducted for the Department of Energy has found that hydraulic fracturing does not pose a serious risk to water supplies. Most notably, preliminary findings of the DOE study examining drilling sites across Pennsylvania found no evidence of local water contamination from natural gas development. Along with the increase in domestic natural gas development, new technologies and clearly established best practices have emerged and focused on ensuring environmental protection.

Finally, a widely stated inaccuracy is that natural gas development and LNG exports will prevent the growth of renewable energy technologies. In reality, however, meeting energy needs is not a zero sum game. Global energy demand is expected to rise by 56 percent by 2040, and renewable electricity generation in the U.S. is projected to grow by 69 percent over the next 20 years according to the Energy Information Administration.

It is important to take all environmental threats and concerns seriously, and to assess what is best for the U.S. and on a global scale. Paramount to this process is not letting special interest groups use politics and distorted information to drum up fears on natural gas production and use. Doing so will only hinder domestic and international benefits of natural gas – while robbing the U.S. of the job creating and GDP-enhancing sectors of energy development and U.S. exports.

With broad bipartisan support in Congress, an administration that has stated its intent to remove bureaucratic delays, and international allies and trading partners in need of stable and reliable energy sources, the time is now to shed outdated restrictions on the export of U.S. abundant energy supplies. We must not fall prey to interest groups who are attempting to propagate untruths and block U.S. energy momentum.

Dr. Margo Thorning is the vice president and chief economist for the American Council for Capital Formation.