American LNG Exports, Energy Leadership Needed as Overseas Tensions Rise

Mark Green
Posted January 26, 2022

The New York Times reports that the Biden administration is working with natural gas and crude oil suppliers from the Middle East, North Africa and Asia to bolster supplies to Europe in the coming weeks in case Russia cuts off fuel shipments in its conflict with Ukraine.

Certainly, helping America’s allies in Europe makes sense amid the ongoing Russia-Ukraine crisis. But why does the administration’s go-to strategy on energy continue to be seeking out foreign suppliers instead of American producers?

It may be that administration officials don’t believe they need to encourage American natural gas and oil production. Yet, given their actions last summer – when the response to increasing gasoline prices was to ask OPEC+ to ramp up its crude oil production instead of fostering American production – it could be that the administration simply doesn’t want to be seen boosting the domestic natural gas and oil industry.

Whatever the case, it’s another mixed signal from the White House. The administration canceled the Keystone XL pipeline its first day in office, paused new leasing on federal lands and waters much of last year, halted potential energy development in parts of Alaska and watched as its congressional allies pursued paying for a big federal spending plan with help from a punitive tax on natural gas production.

On the positive side, U.S. Energy Secretary Jennifer Granholm said last month the administration wouldn’t stand in the way of the industry meeting current energy demand, which followed the administration’s first offshore lease sale in November. It was encouraging to hear Deputy Energy Secretary David Turk say last week that banning oil and/or liquefied natural gas (LNG) exports “is not something we’re currently discussing and under consideration.” Given the energy mixed signals, is it wrong to wonder if the operable word in Turk’s statement is “currently”?

The suggestion here is no more mixed signals. Confusion over America’s energy policy course should end. Rather, American energy leadership should be supported in word and deed. API President and CEO Mike Sommers, from his 2022 State of American Energy speech:

“When policy signals prevent energy leadership here at home, there are going to be consequences. U.S. policies that restrict domestic production force our country to seek relief from OPEC, undermining our energy independence. America should not be in the position of asking for foreign energy supplies, especially when we have abundant resources produced to standards that are among the highest in the world, right here at home. Instead, we should be leading, as the world’s top producer of natural gas and oil.”

Here’s what we know: America has the energy resources and a technologically advanced industry to safely and responsibly develop them. Frank Macchiarola, API senior vice president for Policy, Economics and Regulatory Affairs on Fox Business:

“We have an abundance of energy. We can supply around the world and keep prices stable here at home. This should be an opportunity for the administration to promote American energy to advance our national security and energy security interests and to support our allies overseas.”

To that end, the administration should clearly and categorically rule out the notion of banning or curtailing U.S. exports of LNG and crude oil. Beyond the domestic benefits of supporting production and boosting U.S. trade, America supplying energy to others is a force for stability and reliability in an unstable world.

Even more useful, the administration should consider being more proactive in openly communicating the importance of U.S. LNG exports for our allies’ long-term energy security and guarantee the permitting process for export facilities remains clear and consistent. Second, the Energy Department should approve applications for new LNGH export facilities. Third, the department can help to further increase LNG exports by approving applications it has received to increase export volumes from existing facilities.

Europe’s energy security problems are not temporary, not as long as the continent gets more than 40% of its natural gas from Russia. Open, clear and consistent communications and policy actions from the administration supporting LNG exports for the long-term can begin to reduce Europe’s dependency on Russian natural gas. 

To those who have called for reducing or ending LNG exports as a response to domestic supply and pricing, let’s refer again to the Q&A on LNG exports with Dustin Meyer, API’s vice president of Natural Gas Markets, in which he said pursuing such a course would be “abysmally bad policy.”

American natural gas is a difference-maker, here at home and for our allies around the world. The U.S. needs to continue being the world’s leading natural gas producer and build on important gains from being the world’s No. 3 natural gas exporter – projected by the U.S. Energy Information Administration to be No. 1 in export capacity by the end of this year. That’s American energy leadership worthy of support.