Exporting Misinformation

Having effectively lost the scientific debate over the safety of hydraulic fracturing and the environmental benefits to be gained from expanded shale development, groups opposed to natural gas production are now setting their activist sights on a new frontier: liquefied natural gas (LNG) exports.

As quick background, the United States currently has a massive surplus of natural gas, with numerous analyses showing the country actually has enough natural gas to meeting growing domestic demand (for generations to come) and allow for new jobs (and a reduced trade deficit) through gradual exports. This means that the benefits of natural gas in the United States – lower energy bills, declining greenhouse gas emissions – could conceivably be extended to our trading partners overseas. A landmark study commissioned by the U.S. Department of Energy recently concluded that “LNG export has net benefits to the U.S. economy” – every last segment of it.

But most of the natural gas that could potentially be sold to trading partners would come from expanded U.S. production, most notably from shale. For that reason, groups opposed to shale development are becoming active in opposing exports. Just to give you a sense how silly this has become: groups such as the Sierra Club have actually suggested in official agency filings that the reason they oppose exports is out of a concern that selling natural gas abroad may cause an increase in price here at home.

To repeat: Sierra Club, which sees low natural gas prices as a barrier to wind and solar expansion, is apparently concerned that exports will increase prices. Confused? You should be.

Of course, there should be no confusion on one thing: the talking points really have not changed, meaning the opponents’ efforts themselves are still premised on the same baseless arguments (see EID’s previous debunk here). Among the most recent claims, according to a recent advertisement signed by a who’s who list of opposition groups, are the following:

  • “Exports will allow the gas industry to make billions of dollars at the expense of our communities and public health.”
  • Expanded natural gas production will “release huge amounts of greenhouse gases into the atmosphere”
  • Continuing to produce natural gas means “continuing our reliance on dirty fossil fuels instead of clean energy solutions.”

In an added twist, the latest ad ups the ante on misinformation, suggesting that allowing exports would “clear the way for energy companies to ship more than 40% of America’s natural gas overseas.” Before we get to that, though, let’s examine each of these claims in order.

EID has detailed this in the past (even specifically in the context of exports), but it’s worth reiterating: natural gas development does not come “at the expense of our communities and public health.” Air emissions, as observed by environmental regulators from Pennsylvania to Texas, have not reached levels that would trigger public health concerns. State regulators from across the country have stated that they have never once observed a case where hydraulic fracturing contaminated drinking water supplies. And we all know the threat of earthquakes – a common talking point – is overblown, thanks to analysis from the U.S. Geological Survey and the National Research Council.

As for the “billions of dollars” that these groups think will only flow to natural gas companies, a recent investigation by the Associated Press found that private landowners, including family farmers, are “reaping billions of dollars in royalties each year” thanks to natural gas development. According to the National Association of Royalty Owners, total royalty payments were about $21 billion in 2010.

Regarding greenhouse gases, CO2 emissions in the United States are at a 20-year low today thanks to the increased use of natural gas, which of course has been made possible by expanded shale development. As John Hanger, former secretary of the Pa. Department of Environmental Protection, has observed, “the shale gas revolution, and the low-priced gas that it has made a reality, is the key driver of falling carbon emissions, especially in the last 12 months.”

The EPA’s latest report on GHGs also found that, thanks in large part to utilities using more natural gas, overall emissions in the United States declined three percent from 2010 to 2011. More specifically, methane emissions from oil and gas development were 66 percent lower than what EPA had previously estimated.

The argument that natural gas is “dirty” and runs counter to the expansion of “clean” energy is also equally divorced from reality. Due to its GHG and air quality benefits, the renewable energy industry itself has stressed the importance of natural gas. A couple of notable examples from key trade associations representing renewables in the United States:

  • American Wind Energy Association: “A combination of a large amount of renewable energy, combined with flexible natural gas plants and demand-response and efficiency, can ensure that our electric system has sufficient energy, capacity, and flexibility, and operates reliably and cost-effectively.”
  • Rhone Resch, CEO of the Solar Energy Industries Association: “Natural gas and renewables complement each other very nicely…In the next 30 years we’re going to have 50 percent renewables and 50 percent natural gas.”

Meanwhile, the International Renewable Energy Agency (IRENA) has also stated that natural gas – specifically natural gas from shale – can complement the growth of renewables. The International Energy Agency (IEA) has observed that “natural gas has an important role to play in complementing low-carbon energy solutions by providing the flexibility needed to support a growing renewables component in power generation.”

As President Obama – whom many of the groups making these claims endorsed in the 2012 presidential election – put it so eloquently in his recent State of the Union address, “the natural gas boom has led to cleaner power and greater energy independence.”

Finally, the argument that the United States is going to export 40 percent of its natural gas supplies as LNG is pure invention.

Consider: the global market for LNG is currently roughly 35 billion cubic feet (BCF) per day. Even if we wanted to ship huge volumes of natural gas abroad, here’s a question for you: Exactly where would we send it? Unlike selling additional tennis shoes to, say, Australia, expanding your sales market for natural gas abroad requires the construction of regasification facilities that collectively will require capital investments of literally hundreds of billions of dollars to make possible.

Oh, and one more thing: The United States isn’t the only country in the world competing for export market share. So even if the world market were to expand to 60 BCF a day by 2025 (which is just one of the numbers being thrown out there right now), we’re still talking about a relatively small market over which dozens of countries will aggressively compete.

In other words, the groups suggesting we’ll export 40 percent of our natural gas supplies overseas in big, splashy New York Times ads are hoping you don’t know 1) how small the world LNG market actually is and 2) that the United States isn’t the only country that will be playing in it.

It’s certainly not news that groups like the Sierra Club, PSEHE, Earthworks, and Food & Water Watch – along with Josh Fox, his mother, and the Incredible Hulk – are trying to convince the public to ignore the facts regarding U.S. natural gas development. It is interesting, however, that they’ve expanded their activism into the realm of exports – which, if this latest ad is any indication, appears to suffer from the same lack of evidence, science, and general awareness of reality that has heretofore been the calling-card of their campaign.

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