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Daniel J. Graeber

Daniel J. Graeber

Daniel Graeber is a writer and political analyst based in Michigan. His work on matters related to the geopolitical aspects of the global energy sector,…

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Obama's Own Party Wages War on Energy Plans

The White House on Wednesday announced it was clearing out its in-box for liquefied natural gas export licenses by signing off on plans for a terminal in Lake Charles, La. The third such measure could lead to the delivery of as much as 2 billion cubic feet of natural gas to foreign markets for the next 20 years. The Obama administration has made a low-carbon economy a centerpiece of its second-term agenda. Republican critics of the president said his green plans are hurting the economy. This time, it's the president's own party expressing concerns about his decisions.

The Department of Energy announced it authorized the delivery of domestically produced LNG from an export terminal in Louisiana. The permit is for the export of 2 billion cubic feet of natural gas per day for the next 20 years. The authorization extends to countries that do not have a free trade agreement with the United States.

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The International Energy Agency said it expects the global demand for natural gas to increase by 1.5 trillion cubic feet by 2016, which it said represents about 75 percent of what the U.S. market consumed in 2010. Last year, the Energy Department said LNG would lead to economic gain regardless of the market scenario.  When British energy company Centrica secured enough LNG from the United States to keep the lights on for the equivalent of Hong Kong's entire population, British Prime Minister David Cameron expressed gratitude that U.S. gas was helping support energy security across the pond.

At home, the Obama administration told a crowd of supporters in Tennessee wind, solar and natural gas were not only helping reduce U.S. dependence of foreign energy, but reducing carbon pollution as well.

The Lake Charles facility would expand the U.S. export market to countries like Japan, which started looking for more sources of energy after the Fukushima nuclear disaster in 2011. The government's LNG study said more exports would only modestly increase domestic prices at home.  The Bicameral Task Force on Climate Change issued a report before the Lake Charles announcement saying LNG exports could reduce carbon pollution, but only in other countries. The task force, led by Rep. Henry Waxman, D-Calif., and Sen. Sheldon Whitehouse, D-R.I., said LNG exports could make natural gas more expensive at home and push domestic users to use more coal instead. Their report says domestic natural gas production will actually increase, not decrease, greenhouse gas emissions.

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"The liquefaction process itself is energy intensive so LNG export facilities would have significant carbon emissions," the report states.

The Lake Charles decision is the third such move by the Obama administration, meaning the government has now authorized the export of 4.6 million cubic feet of LNG for non-free trade countries. Sen. Lisa Murkowski, R-Alaska, who questioned the term "clean energy" in a 121-page energy blueprint, said exports of cleaner-burning natural gas present a historic opportunity for the U.S. economy.  With 19 more LNG export applications on the books, and concerns from his own political party, the Obama administration has its work cut out for it as it seeks to take advantage of what he said were "clean energy and natural gas revolutions" at home.

By. Daniel J. Graeber of Oilprice.com




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