Pro: Environmentalists praise clean natural gas while blocking imports of it in liquid form

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Ben Lieberman
Saturday, April 26, 2008
EDITOR’S NOTE: The writer is addressing the question, Should Congress ban floating liquid natural gas terminals in the ocean off New England and the mid-Atlantic states?

Environmentalists love natural gas—except when they hate it. This schizophrenic approach is costing the rest of us a bundle and is standing in the way of badly needed sources of supply such as liquefied natural gas (LNG).

Environmentalists and legislators love natural gas relative to its dirtier fossil fuel competitor, coal. Tough measures in the 1990 Clean Air Act amendments targeted new coal-fired power plants, and very few have been built since. In effect, new coal plants were declared “out of bounds”—along with new nuclear plants—as an option for generating additional electricity. But while these power sources were consigned to the sidelines, America’s electricity needs kept expanding.

That growing demand has been met largely by building natural gas-using facilities. In less than two decades, natural gas has gone from being a relatively minor source of electricity to providing 20 percent of the nation’s needs. About 25 percent of our natural gas supply now goes to electric utilities, rather than to residential and industrial uses.

Of course, this added demand has raised prices. Though the jump in oil and gasoline costs in recent years has garnered most of the attention, the percentage rise in natural gas has been just as big.

At more than $9 per thousand cubic feet wholesale, that’s more than four times its average price during the 1990s. Consumers are feeling the pain—especially in winter—given that nearly 60 percent of America’s homes are heated with natural gas.

In addition, natural gas-dependent industries such as chemicals and fertilizer production, which use it both as a chemical feedstock and an energy source, have seen hundreds of thousands of jobs lost to parts of the world where natural gas is relatively abundant and costs much less.

Here’s where the love-hate stuff comes in. At the same time environmental policy drove up the demand for natural gas, it has also constrained the supply.

For example, substantial domestic reserves of natural gas, both onshore and offshore, have been placed off-limits due to various environmental restrictions. Many of the same activists and politicians responsible for higher natural gas usage are also among those standing in the way of increased natural gas drilling.

The same is true for LNG. It is uneconomical to ship natural gas from other continents in its natural, gaseous state. But natural gas can be condensed at very low temperatures and shipped as a liquid.

Special receiving facilities have safely handled shiploads of LNG for decades, but the need to expand has skyrocketed. LNG supplies less than 3 percent of our needs. It could provide much more.

Once again, the usual suspects are doing everything they can to stop any expansions of the LNG infrastructure.

Sens. Ted Kennedy and John Kerry and Rep. Barney Frank of Massachusetts have been busy trying to block an onshore LNG facility in their state—at least when they’re not busy denouncing high home heating bills or the outsourcing of manufacturing jobs. Sen. Frank Lautenberg is no less critical of a proposed facility off the New Jersey coast. Ditto a large California delegation regarding several proposed LNG projects there.

The reasons for opposition—usually safety and environmental concerns—are belied by the excellent record LNG has amassed in this country. To be sure, these concerns, including the overhyped claim that LNG facilities would be easy terror targets, should be addressed through strong safeguards. But overblown fears are hardly a valid reason to stop these projects.

Natural gas is only part of the solution to our energy challenges, and LNG is only part of the natural gas equation. Nonetheless, affordable energy is indispensable to economic growth and to maintaining our nation’s standard of living.

Americans will need access to every reasonable energy source available in the years ahead. Increased LNG should be a part of our energy future.

Ben Lieberman is a senior policy analyst in the Roe Institute for Economic Policy Studies at The Heritage Foundation. Readers may write to the author in care of The Heritage Foundation, 214 Massachusetts Ave. NE, Washington, D.C. 20002; Web site: www.heritage.org.

Last updated: 8:53 pm Thursday, December 13, 2012

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