The USA is moving towards the status as the world's largest exporter of natural gas. In the past, natural gas has been moved by pipelines. That meant that American natural gas could be exported to Canada or Mexico, but no where else. You just don't build pipelines under the ocean to another continent. Now, however, transportation of gas has changed. The gas is liquefied and transported in ships as liquefied natural gas or LNG as it is known. Once the ships get to their destination, the LNG is returned to its gaseous state and then sent by pipeline to its final destination. This transportation process is not inexpensive. Because of the enormous reserves of natural gas in the USA, however, the price here is so low compared to the rest of the world, that it will still be quite profitable to export the gas in this way. Even the energy adverse Obama administration understands this and has approved many projects to get this trade going. At the moment, projects for the export of about 10.5 billion cubic feet of gas have been approved. At that level, it would mean export of about one-seventh of American production would be going to export.
The benefits of this trade will be enormous. First of all, it will mean jobs for a large number of American workers. It will mean a dramatic improvement in the US balance of payments. It will also mean much higher tax revenues for the federal and state governments. Second, for environmentalists, it means that much cleaner natural gas will be used in Europe and Asia, thereby replacing coal and oil. Third, it will reduce the power of the various countries that produce oil. In particular, it will greatly reduce the reliance of Europe on oil and gas coming from Russia. This will reduce the ability of the Russians and others to use their fuel to blackmail other countries.
The opposition to this trade, however, is still quite large. The arguments against it break into two components. First, some environmental groups fight the exports because they fight all plans to ever use fossil fuels. The argument is roughly that getting natural gas to Europe or Asia will reduce those area's needs to use solar or wind energy. This argument, however, ignores the realities of the situation. There will still be growth for solar or wind energy if those are feasible on an economic basis. In the meantime, isn't burning natural gas much better than burning coal? Second, some in the USA argue that we should keep the low cost natural gas for ourselves only. That argument too misses the point. America can easily increase natural gas production by 15% without much affecting the price here in the long run. The large numbers of jobs created by this trade will do much more for our economy than any harm a slight increase in the price of gas will cause.
The benefits of this trade will be enormous. First of all, it will mean jobs for a large number of American workers. It will mean a dramatic improvement in the US balance of payments. It will also mean much higher tax revenues for the federal and state governments. Second, for environmentalists, it means that much cleaner natural gas will be used in Europe and Asia, thereby replacing coal and oil. Third, it will reduce the power of the various countries that produce oil. In particular, it will greatly reduce the reliance of Europe on oil and gas coming from Russia. This will reduce the ability of the Russians and others to use their fuel to blackmail other countries.
The opposition to this trade, however, is still quite large. The arguments against it break into two components. First, some environmental groups fight the exports because they fight all plans to ever use fossil fuels. The argument is roughly that getting natural gas to Europe or Asia will reduce those area's needs to use solar or wind energy. This argument, however, ignores the realities of the situation. There will still be growth for solar or wind energy if those are feasible on an economic basis. In the meantime, isn't burning natural gas much better than burning coal? Second, some in the USA argue that we should keep the low cost natural gas for ourselves only. That argument too misses the point. America can easily increase natural gas production by 15% without much affecting the price here in the long run. The large numbers of jobs created by this trade will do much more for our economy than any harm a slight increase in the price of gas will cause.
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