Sarah Wasko / Media Matters
The White House has declared this to be “Energy Week” and is pushing a theme of "energy dominance," with a particular emphasis on exports of natural gas. Three of President Trump's cabinet members are out in force this week trying to spread misleading or false messages about energy and exports through the media.
“An energy-dominant America will export to markets around the world, increasing our global leadership and influence,” Energy Secretary Rick Perry, Interior Secretary Ryan Zinke, and Environmental Protection Agency Administrator Scott Pruitt wrote in a joint op-ed published Monday in The Washington Times.
Watch out for these myths:
Myth #1: Natural gas exports are good for ordinary Americans and the overall U.S. economy
“American companies can and already have exported U.S. [liquefied natural gas] to our international trading partners in Europe and Asia,” Perry said at a White House briefing on Tuesday. “Unleashing our full energy potential in this country will lead to robust job growth and expansion in every sector of our economy.”
A White House press release claimed that natural gas exports from 2016 to 2040 could “increase workers earnings by $110 billion,” citing 2016 research from the American Action Forum, a group that describes itself as promoting “center-right” policy.
But studies from the Department of Energy (DOE) and others have found that increased exports of liquefied natural gas, or LNG, would not help many Americans and in fact would hit most in the pocketbook by raising the prices they pay for natural gas, harming lower-income people especially. And higher natural gas prices could dampen domestic manufacturing.
“In every case, greater LNG exports raise domestic prices and lower prices internationally,” according to a 2015 report produced for the Department of Energy. DOE reports from 2014 and 2012 found the same thing.
In 2014, a bipartisan group of 22 senators were concerned enough about gas exports hurting average Americans that they sent a letter to then-President Obama on the topic:
Families and businesses depend on affordable and reliable supplies of natural gas. This winter many parts of the country faced tight supplies of propane and natural gas and families were left to face high energy bills.
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Taking a longer-term view, the United States has benefited from rising supplies and lower prices for natural gas since 2008. Thanks in part to lower natural gas prices, America’s manufacturing sector has created more than 600,000 jobs since 2010. The Boston Consulting Group concluded that affordable natural gas prices could lead to 5 million more manufacturing jobs by the end of the decade. We must ensure that we do not squander what is clearly an American competitive advantage right now for American manufacturers and for the American economy.
This week, a trade group of domestic manufacturers, the Industrial Energy Consumers of America, wrote a letter to Perry and Commerce Secretary Wilbur Ross arguing that aggressive natural gas exportation “poses a significant long-term threat” to energy-intensive industries. The group asked the Department of Energy not to approve LNG exports to nations the U.S. does not have free-trade agreements with, The Washington Post reported.
A 2012 report commissioned by the DOE projected that LNG exports would not increase the number of jobs in the country:
LNG exports are not likely to affect the overall level of employment in the U.S. There will be some shifts in the number of workers across industries, with those industries associated with natural gas production and exports attracting workers away from other industries.
That report also projected that gas companies would be the big winners from increased exports and wage earners, while people relying on government assistance would be among the losers:
How increased LNG exports will affect different socioeconomic groups will depend on their income sources. Like other trade measures, LNG exports will cause shifts in industrial output and employment and in sources of income. Overall, both total labor compensation and income from investment are projected to decline, and income to owners of natural gas resources will increase. Different socioeconomic groups depend on different sources of income, though through retirement savings an increasingly large number of workers share in the benefits of higher income to natural resource companies whose shares they own. Nevertheless, impacts will not be positive for all groups in the economy. Households with income solely from wages or government transfers, in particular, might not participate in these benefits.
Myth #2: Natural gas exports are good for the climate
Even as Trump and members of his administration downplay and deny climate change, they also make the claim that natural gas is climate-friendly. Perry did so while talking to journalists on Monday, The Hill reported: “He said the fact that the U.S. has been a world leader in reducing greenhouse gas emissions — mostly due to cheap natural gas replacing coal for electricity — shows that the country can cut emissions without Paris or similar policies.”
Fred H. Hutchison, executive director of two LNG advocacy groups, elaborated on that argument in an op-ed in The Hill on Monday that praised Trump's pro-export agenda: “Low-priced U.S. natural gas, spurred by the shale energy revolution, has led to massive domestic fuel-switching and thus big reductions in conventional air pollutants and greenhouse gas emissions. ... Through LNG exports, these benefits can accrue to other nations — such as China, India and Korea — all of which now rely heavily on coal for power and industrial uses.”
But there is substantial research indicating that natural gas is not better for the climate than coal when one takes into consideration leaks from gas drilling and transportation infrastructure. Last year, Joe Romm of ThinkProgress rounded up more than a dozen studies that “undermine the climate case for fracked gas,” including groundbreaking research by scientist Robert Howarth and his colleagues at Cornell. As Howarth said last year, “Methane leaking throughout the natural gas industry makes use of gas for power generation a disastrous strategy for slowing climate change.” And a 2014 analysis of the impact of a coal-to-gas transition in the U.S. electricity sector by nonprofit science group Climate Central found that “even with modest leak rates and a fairly aggressive transition, we could still end up with little or no climate benefits by 2030.”
When natural gas is processed and shipped overseas, the climate impact is even bigger, as climate policy analyst James Bradbury of the World Resources Institute testified before Congress in 2013. Bradbury explained why in a blog post:
In order to send natural gas overseas, you must liquefy it, transport it, and then re-gasify it. This is an extremely energy- and emissions-intensive process. According to the National Energy Technology Lab’s 2012 Natural Gas Technology Assessment, liquefaction, transport, and gasification would add roughly 15 percent to U.S. natural gas production’s life cycle GHG emissions ... These additional emissions more than double the total upstream GHG emissions from U.S. natural gas systems.
A new report from Carbon Action Tracker, a consortium of scientific research organizations, finds that natural gas and LNG systems are not just bad for the climate, they're bad for companies and investors that should be planning ahead for doing business in a warming world. Even though the U.S. intends to drop out of the Paris climate agreement, all of the countries the U.S would ship gas to are still party to the agreement and are working to rein in their greenhouse gas emissions. Using more natural gas runs contrary to that goal and would delay the transition to a carbon-free power system.
“Betting on growth of natural gas is an unwise move and will lead to a lock-in of expensive infrastructure that will need to be shut down early,” said Bill Hare from Climate Analytics, one of the groups in the Carbon Action Tracker consortium.
From the report:
Massive investments in gas extraction, new pipelines and LNG ports—in addition to what is already existing and often underutilised—will divert financial resources from investments into a decarbonised power sector, and lead to the creation of stranded assets in the coming decades, constituting a major obstacle for the full decarbonisation of the electricity sector.
Myth #3: Natural gas exports have been blocked until now
In their Washington Times op-ed, Perry, Zinke, and Pruitt wrote, “Becoming energy dominant means that we are getting government out of the way so that we can share our energy wealth with developing nations. For years, Washington stood in the way of our energy dominance. That changes now.”
Perry reiterated this idea during a speech on Tuesday at the 2017 Energy Information Administration conference, according to Oil and Gas Investor:
Perry said he watched during past eight years as policymaking was driven by political agendas.
“Previous leaders have said they were for American energy independence,” he said.
However, those leaders “didn’t want to drill for it, didn’t want to mine it, didn’t want to transport it and didn’t want to sell it.”
But that's a false frame. The U.S. oil and gas sector has been thriving for years. As The Washington Post reported in February, “Since 2010, the United States has been in an oil-and-gas boom. In 2015, domestic production was at near-record levels, and we now produce more petroleum products than any other country in the world."
LNG exports specifically have also been growing in recent years. As Amy Harder reported in Axios, “The Obama administration approved roughly two dozen natural-gas export applications to countries the U.S. doesn't have free-trade agreements with, according to Energy Department data. The Obama administration also rejiggered the federal review process in 2014 to make it go faster for most companies waiting for approval."
The process was moving so fast that 16 environmental groups warned in 2014 about a “disastrous rush to export fracked gas,” saying they were “disturbed” by government plans to “build liquefied natural gas export terminals along U.S. coastlines that would ship large amounts of fracked gas around the world.”
“Trump will try to approve applications faster,” Harder reported, but “Trump's latest move doesn't make any concrete changes that would indicate the process will move any faster.”
Myth #4: The U.S. can achieve “energy dominance”
Trump and his cabinet members keep repeating the phrase “energy dominance.” In a speech on Wednesday, Trump said, “We’re becoming more and more energy dominant. I don’t want to be energy free; we want to be energy dominant in terms of the world.”
But energy analysts are dubious. As E&E News reported earlier this month, “Academics and energy experts struggled to define what actualizing 'energy dominance' would look like and cautioned that such a brusque policy stance could destabilize America's position on the global stage.”
Energy policy researcher and analyst Daniel Raimi wrote a skeptical piece this week in The Conversation:
When people use the word “dominant,” they might think of the 2017 NBA Golden State Warriors, or Roger Federer in his heyday at Wimbledon.
“Dominance” suggests the United States could bend geopolitical adversaries to its will by wielding energy as some type of bargaining chip or weapon. But the buying and selling of oil, gas and other forms of U.S.-produced energy are directed by market forces, not government policy. For example, a large share of recently increased crude oil exports from the U.S. has effectively gone to Venezuela, hardly a close ally.
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And even if it were desirable, “dominance” of global energy markets in today’s world is simply unrealistic. There is no Roger Federer of energy.
Consider the Organization of Petroleum Exporting Countries (OPEC), maybe the closest thing to the Golden State Warriors of the energy world, which has struggled mightily in recent years to exert some control over consistently low oil prices. U.S. oil and natural gas producers, while reemergent as major players, do not have OPEC’s market power, let alone that of John D. Rockefeller in the late 1800s and early 1900s or the Texas Railroad Commission from the 1930s through the 1960s
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And why is it unrealistic to expect U.S. producers to exert this type of power? The answer lies in the enormous scale of the global energy system, which is many times larger than in the heyday of Rockefeller or other effective market managers.
Peter Shulman, an associate professor at Case Western Reserve University and an energy historian, said it's not clear that being an energy exporter makes a country secure. E&E News summarized his view: “The negative connotation associated with 'dominance' could further alienate foreign allies, many of which are already reeling from the United States' shift away from climate action. It could also create tension with U.S. trading partners, he said.”
Dave Anderson, policy and communications manager for the Energy and Policy Institute, pointed out to The Washington Post that the phrase as it's being used leaves out something important: “Notably missing from most of this ‘energy dominance’ talk is renewable energy sources.”
Maximilian Auffhammer, an environmental economist and professor at the University of California, Berkeley, was particularly dismissive. “Frankly, I have to chuckle when I hear it, because it just doesn't make any sense,” he told E&E News. “The word dominance is not generally used in a good context, and it always means there's a big person on the playground shoving around a smaller person.”