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VITALE: Limiting natural gas exports a bad call for the economy
Increase production to serve growing market
Question of the Day
A new low in the “war on energy” was reached in recent weeks, when a handful of federal officials and a few short-sighted corporations, including Dow Chemical, joined forces to support new anti-gas policies that threaten our nation’s energy-based economic recovery. Their plan: Cap liquefied natural gas exports and manipulate the domestic natural gas market for the short-term benefit of a handful of companies. Just yesterday, Utah-based Huntsman Corp. also announced it was joining this misguided effort.
If successful, limiting exports will lead to reduced development of domestic natural gas resources, threatening the enormous prosperity our country is seeing from shale gas development. The energy industry has generated virtually full employment in places like South Dakota, Ohio and pockets of northern Pennsylvania, and has added millions of dollars in revenue to local, state and federal coffers. Unfortunately, not everyone has recognized the value of America’s ongoing energy renaissance. New York State for example, has had a long, drawn-out battle over how to regulate the development of the state’s natural gas resources. This battle has restricted the value of private property for landowners and has cost the state thousands of jobs and millions of dollars in tax revenue.
From New York, we just need to peek over the border to Pennsylvania to witness the natural gas-powered economic boom. Over the last five years, northern Pennsylvanians have enjoyed a robust economic recovery, complete with high-paying jobs in manufacturing, and the support of businesses such as mom and pop restaurants and shops throughout the area.
The International Energy Agency has called the United States “the Saudi Arabia of natural gas,” meaning that our nation has an unmatched amount of clean natural gas reserves. These reserves are helping our country become more energy independent, reinventing American manufacturing and creating jobs through exploration, discovery and development.
Between 2010 and 2012, natural gas production in the United States grew by nearly 20 percent. Over the last year, that growth has slowed to a crawl due to the glut of U.S. natural gas. Without new markets, the economic benefits of gas development will stall.
The solution is simple: Follow the demand.
Pennsylvania and other states are looking for ways to begin exporting natural gas abroad. Just as decreased demand decreases production, an increased demand in natural gas would drive an increase in production, leading to additional investments in U.S. manufacturing, more jobs in local communities and more revenue for local, state and federal governments.
The Department of Energy recently released a study that emphasized the link between exports and economic gains. The more liquefied natural gas was exported, the greater net benefits for the United States — from landowners to steelworkers. In fact, the study estimated that exports could boost our economy by $47 billion by 2020. Everyone wins.
Natural gas production does not simply affect natural gas companies, but all industries and manufacturers. For example, global steel output has grown by 14 percent since 2008, thanks in large part to the natural gas industry. Meanwhile, American carbon dioxide emissions have decreased by 20 percent thanks to coal-powered plants being converted to operate on natural gas. This could occur throughout the entire world if foreign nations were to operate their plants with American natural gas. This is a viable and proven solution to climate change.
After a while, it’s hard to argue with facts. Natural gas is a valuable and abundant domestic commodity. For the nation, it’s critical that policymakers support policies that promote responsible gas development. Limiting access to global markets and reducing investment in domestic energy production doesn’t make sense.
Neil Vitale, an organic dairy farmer, is a member of the Steuben County Landowners Coalition and Joint Landowners Coalition of New York.
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