How Natural Gas Exports Are Giving America a Key Edge

COMMENTARY Coal, Oil, Natural Gas

How Natural Gas Exports Are Giving America a Key Edge

Jul 30th, 2019 3 min read

Commentary By

Nicolas Loris @NiconomistLoris

Deputy Director, Thomas A. Roe Institute

Graham Filby

Summer 2019 member of the Young Leaders Program at The Heritage Foundation

When the United States acts as a dominant energy leader, it reduces the power of rogue nations to use their energy supplies as political weapons. Altinosmanaj/Getty Images

Key Takeaways

Domestic natural gas production will provide the United States with a stable supply of affordable energy well into the future.

Natural gas has numerous applications in the residential, industrial, and commercial sectors.

The industry is expected to support 3 million jobs by next year.

According to a new report published by the International Energy Agency, the United States could become the world’s largest exporter of liquefied natural gas as soon as 2024.

Growing U.S. liquefied natural gas trade builds the domestic industrial sector and supports our national security interests abroad by providing America’s allies with more energy choice and freedom.

Natural gas is primarily methane, which has a very low density. To ship natural gas, exporters cool it until it reaches minus-260 degrees Fahrenheit. This process liquefies the gas, which allows for safe and efficient transportation.

Importers then turn the liquefied natural gas back to gas form and transport it via pipeline for consumption. 

Natural gas has numerous applications in the residential, industrial, and commercial sectors. Half of all U.S. homes use natural gas for heating and cooling, and natural gas supplies 31% of the overall primary energy demand in the U.S.

The first liquefied natural gas production facility was built in West Virginia in 1912, and the first liquefaction and regasification centers were constructed during World War II in Ohio. The United States first began exporting liquefied natural gas internationally from Alaska to Japan in the late 1960s. 

Before the shale revolution, it appeared as though the U.S. would become a massive natural gas importer. In fact, the most recent export terminal built in Louisiana in 2008 was originally constructed as an import terminal

However, smart extraction technologies created an economic boom and catapulted the U.S. to be the world’s largest natural gas producer for more than a decade. Last year, the U.S. produced more natural gas than the entire Middle East combined. 

The industry is expected to support 3 million jobs by next year. This new energy market will also contribute $62 billion in federal and state tax revenues in gas-producing states. 

Along with leading the way in natural gas production, the U.S. is increasingly becoming a global leader in natural gas exports. 

According to the Department of Energy, in 2018, the U.S. exported 700 billion cubic feet of liquefied natural gas to 27 countries on five continents. Japan currently accounts for 37% of the global liquefied natural gas market, but China’s growing energy needs will soon make that country the largest importer of liquefied natural gas in the world. 

Natural gas production and liquefied natural gas exports are an important part of President Donald Trump’s America First energy policy. In a speech outside a Louisiana liquefied natural gas plant, Trump said, “We should be producing [energy] at home, not enriching foreign adversaries abroad.”

Domestic natural gas production will provide the United States with a stable supply of affordable energy well into the future.

A strong liquefied natural gas trade policy that removes burdensome regulations and empowers the states will strengthen our global energy leadership and protect our allies abroad from manipulative energy suppliers, such as Russia and Iran. 

During an address to the Atlantic Council in April 2014, retired Marine Corps Gen. James L. Jones, the former NATO supreme allied commander and national security adviser to President Barack Obama, said:

I believe that a focus on energy security can and must be a critical new element in the American strategic partnership in Central and Eastern Europe, and will benefit Poland, Europe as a whole, and the United States.

The fact that energy security is vital to all of our nations’ domestic economies is well-established; the Crimean crisis, however, is proving once again that energy security is also a central pillar of global stability. … 

The shale revolution in the United States has fundamentally transformed the global energy picture, as well as the debate concerning U.S. energy policy. …

I believe the United States should undo outdated regulations that prevent us from sharing our energy abundance with friendly countries. Doing so would benefit our allies, but also provide important economic and trade benefits to the United States.

When the United States acts as a dominant energy leader, it reduces the power of rogue nations to use their energy supplies as political weapons. 

In Europe, it’s critical that Russia does not have a monopoly supplying Europe’s energy. Countries such as Poland, Croatia, and Lithuania need energy support from the United States to survive Russian aggression. 

Higher levels of exports will generate economic growth both domestically and globally. Furthermore, liquefied natural gas exports will bolster U.S. national security and the security of America’s allies. 

Congress should enact free-market policy reforms that allow quick liquefied natural gas permit and licensing processing so that the U.S. can realize the full potential of producing natural gas domestically and exporting liquefied natural gas abroad.

This piece originally appeared in The Daily Signal