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The fracking revolution and the dramatic increase in the abundance and use of natural gas (along with the lower prices) have been boon for America. Yet, because of corporate interest and attempted political manipulation to further those interests at the expense of coal, natural gas’s ascendance has come with a dark side.
First the good news. The U.S. Department of Energy (DOE) gave Golden Pass Products permission to build a liquefied natural gas (LNG) export terminal to deliver LNG to countries lacking free-trade agreements with the United States.
This first LNG export terminal approved by the Trump administration would be capable of shipping 2.21 billion cubic feet per day (Bcf/d) of natural gas around the world. Trump continues to deliver on his promise to unleash domestic energy production, build infrastructure, and grow jobs: Golden Pass estimates the facility will create 45,000 direct and indirect jobs over the next five years and generate up to $3.6 billion in federal and state tax revenues.
“This announcement is another example of President Trump’s leadership in making the United States an energy dominant force,” Energy Secretary Rick Perry said in a press statement. “This is not only good for our economy and American jobs but also assists other countries with their energy security.”
The International Energy Agency has estimated global demand for natural gas will be 50 percent higher by 2035 than it is now, meaning LNG is a growth industry. There are currently two LNG export terminals operating in the United States, with 15 new LNG export terminals already approved by the Federal Energy Regulatory Commission (eight of which are currently under construction), and 14 more in the permitting process. If all the LNG export terminals currently existing, under construction, approved, and proposed come online, at full capacity, the United States would be able to export 16,111 Bcf/yr, or 44 Bcf/d – – the equivalent of 7.8 million barrels of oil per day (mbl/d). Saudi Arabia exported 7.4 million mbl/d of crude oil in 2013 – at full capacity the United States would become the Saudi Arabia of natural gas.
Now the unsurprising (to anyone who understands corporate self-interest, not matter how short sighted) but still disappointing dark side.
Big Oil is pushing the Trump administration to stay in the Paris climate agreement and short-term self-interest is why. BP, Chevron, ExxonMobil, and Royal Dutch Shell have backed keeping America in the agreement. For instance, a BP representative told CNN Money it “welcomed the Paris agreement when it was signed, and we continue to support it. … We believe it’s possible to provide the energy the world needs while also addressing the climate challenge.” ExxonMobil sent a letter to the White House last month calling the Paris agreement an “effective framework for addressing the risks of climate change.”
Big Oil is backing an agreement to reduce greenhouse gas emissions, which the burning of oil produces in abundance, because they are no longer “oil” companies but rather are becoming “oil and gas” companies. Natural gas, which emits less carbon dioxide than either coal or oil, is replacing coal for electric power production, a trend the emission cuts required by the Paris agreement will almost certainly expedite, so traditional oil companies have invested heavily in natural gas. As they see it, coal’s losses under Paris will be their gain.
CNN Money reports “42% of Exxon’s total daily production last quarter was actually in natural gas,” and Shell made a $50 billion purchase of natural gas producer BG Group in 2016.
“These companies view natural gas as a key growth area going forward for them. It just makes sense for them to be at the table,” Brian Youngberg, senior energy analyst at Edward Jones, told CNN Money.
While the Paris climate agreement may sound in the short term like a dinner bell for oil/gas companies slavering at the prospect of dining on coal’s corpse, it may in fact be the death knell sounding for them in the long-term as anti-fossil fuel activists sharpen their knives to dine on oil and gas companies even before coal is totally consumed. After all, if reducing greenhouse gases to fight climate change is a good reason to force the switch from coal to natural gas, wouldn’t it be better still to end such emissions altogether (as if we in reality could) by tuning off the gas spigots and building more wind, solar, and even dreaded hydro and nuclear power plants?