The Real Fuel of the Future: Natural Gas
Bottom Line: The U.S. is set to become the world's largest exporter of natural gas, which is an increasingly critical fuel for growing economies. U.S. natural gas dominance poses numerous benefits for the domestic economy, national security, and global populations. Policymakers should reduce environmental and export regulations on natural gas to accelerate its benefits.
Rising global populations and wealth will lead to greater consumption of goods and services, of which natural gas is an input. Even as energy efficiency increases, global growth will increase energy demand by an amount equal to the entire consumption of the U.S. The Energy Information Agency (EIA) and other organizations forecast U.S. shale production to increase 25% to 100% over the next two decades.
The number of nations importing liquefied natural gas (LNG) has increased from 12 to more than 40 in the past two decades. In the next two decades, the international LNG trade is expected to become a $200 billion annual business.
Natural gas, unlike alternative energy sources such as wind and solar, does not depend on massive public subsidies or mandates. Wind and solar power combined provide less than 2% of world energy; natural gas supplies 23% and is on track to displace oil as the number-one global energy form.
Natural gas requires capital-intensive physical infrastructures—pipes, ports, and, especially, LNG terminals. Encouraging investments in these facilities in this country will require streamlining the environmental review that is necessary to acquire building permits and instilling confidence among investors that the government will not revoke them once they are granted. All 13 of the current LNG export applications require Environmental Impact Statements, the most burdensome level of review, which can cause delays ranging from five to nine years.
LNG producers currently require federal permission to export natural gas. This requirement—created a half-century ago, when many believed that America was in imminent danger of running out of energy—is an anachronism and needs to be abolished. To provide long-term confidence among investors and buyers, Congress should firmly and completely revoke the Department of Energy's export authority.
Accelerating America’s LNG exports would greatly expand the domestic economic benefits from shale gas. America’s natural gas industry already employs some 3 million Americans and adds more than $350 billion to the economy. Expanding exports would continue to reduce the global price of natural gas to the benefit of citizens everywhere.
If the U.S. becomes the world’s dominant LNG exporter, such geopolitical “soft power” would counterbalance the influence of Russia and the Middle East on the world stage.
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- Rising global populations and wealth will lead to greater consumption of goods and services, of which natural gas is an input.
- Even as energy efficiency increases, global growth will increase energy demand by an amount equal to the entire consumption of the U.S.
- The EIA and other organizations forecast U.S. shale production to increase 25% to 100% over the next two decades.
Read the full report here.