A group of Democrat Senators has just sent a letter pleading for the Biden Administration to limit U.S. LNG exports while the Department of Energy conducts a review of the exports and their impact on domestic prices.
The appeal comes at a time when Europe is being crippled by sky-high energy prices, with U.S. LNG potentially providing a lifeline to help keep the lights on in the region.
Many of the Senators which have signed off on this letter have campaigned against pipelines within their states, forcing them to import natural gas from abroad.
Just as U.S. exports of liquefied natural gas (LNG) serves as the main cog in helping keep the lights on and homes heated in Europe in this windless winter, a group of Democratic senators sends a letter to Energy Secretary Jennifer Granholm urging her and the Biden administration to take action to limit U.S. LNG exports.
In their letter, these 10 senators "...urge the Department to conduct a review of LNG exports and their impact on domestic prices and the public interest, and develop a plan to ensure natural gas remains affordable for American households. Until such a plan is completed, the Department should consider halting permit approvals of U.S. LNG export facilities."
There are several problems with this approach. The first is that, as stated above, Europe is in desperate need of U.S. LNG this winter and likely beyond as its wind industry fails to deliver on its promises. Second is the fact that, despite record levels of LNG exports in recent months, U.S. natural gas production continues to enjoy a steady surplus over demand for it. The U.S. price, currently standing at about $4.80 per Mmbtu at the Henry Hub, is not connected to prices for international natural gas, which in Europe is currently selling for upwards of 6 to 7 times the U.S. price.
The U.S. proven resource of natural gas is equal to hundreds of years of current consumption. Shouldn’t we as a nation should celebrate our ability to pitch in a small sliver of what we produce to help avoid a looming humanitarian catastrophe across the European continent? That crisis was brought on by the wrong-headed energy policies adopted by governments who share the general energy outlook of Granholm, Biden, and this group of senators.
Here is a list of the senators who signed this letter: Jack Reed (D-RI), Angus King (D-ME), Elizabeth Warren (D-MA), Ed Markey (D-MA), Debbie Stabenow (D-MI), Tina Smith (D-MN), Richard Blumenthal (D-CT), Patrick Leahy (D-VT), Gary Peters (D-MI), and Sheldon Whitehouse (D-RI).
Now, take a look at that list and notice the states they represent: Two of them are from Sec. Granholm’s home state of Michigan, obviously recruited by the others to elevate the priority of this letter with the Secretary, a former governor of that state. Then you have Tina Smith of Minnesota, who opposes anything the U.S. oil and gas industry does as a matter of course.
Where are the 7 other senators from? Maine, Connecticut, Massachusetts, Rhode Island, and Vermont.
All New England states.
This leads us to the second logical problem with this approach, where the senators get the question of the impacts of importing/exporting LNG to their constituents exactly backward.
Where high natural gas prices for utility consumers are concerned, what do all New England states have in common in recent years?
They’ve all found themselves cut off from the massive natural gas supply provided by the Marcellus and Utica Shale formations of the Pennsylvania/West Virginia/Ohio and Michigan region.
Because their fellow Democrats in New York State, led by disgraced ex-Governor Andrew Cuomo, have refused to allow pipelines to be built across that state, which forms a land blockade from the Marcellus/Utica shale basins to New England.
Thus, we see the spectacle every winter of LNG being imported into Boston Harbor by tanker after tanker coming not from U.S. exporters, but from thousands of miles across the ocean from other exporting nations, including from 4,000 miles distant in Vladimir Putin’s Russia.
If lowering natural gas costs for their constituents were really the goal of these senators, their best, most effective approach would be advocating for the building of a few hundred miles of new pipelines across New York from Pennsylvania, rather than invoking bans that ensure the continuation of the illogical, carbon-intensive practice of bringing natural gas into Boston Harbor from 4,000 miles away in Russia.
At the end of the day, this letter to Sec. Granholm only demonstrates that these 10 senators either have no understanding of the true potential benefits involved in the import/export equation for LNG, or that they intentionally misrepresent these benefits for the U.S. and the world for purely political reasons. Neither option is especially flattering.