Congress’ fortuitous energy moment

The turmoil in Ukraine has sparked a long-missing sense of urgency to expedite LNG exports from the United States. This month, the House Energy and Commerce Committee approved the Domestic Prosperity and Global Freedom Act, a bill to expedite U.S. exports of liquefied natural gas (LNG) that will strengthen America’s global leadership and fuel job growth here at home.

Lawmakers now share an obligation not to let this momentum falter.

America has become the world’s leading producer of natural gas, as this new video shows. Since 2007, domestic shale oil and gas production has increased by 50 percent. Across the country, development is giving new life to economic recovery and revitalizing entire regions. Representing a sharp shift from only a few years ago, the United States is on the brink of becoming a net energy exporter; in the first half of 2013, we met 87 percent of our energy needs here at home.

{mosads}There is no compelling reason to be sitting idly on these assets. The United States has the opportunity to create good-paying jobs and provide greater stability to international markets, all by lifting restrictions on LNG exports.

Despite its public rhetoric otherwise, President Obama’s administration remains on the sidelines. Under policies which no longer fit America’s energy realities, the Department of Energy must approve export licenses for all LNG sales to countries that do not share a Free Trade Agreement (FTA) with the United States. To date, only seven applications have been approved. More than 20 are awaiting review, many for months – and even years, in some cases.

Fortunately, in a rare demonstration of bipartisan cooperation, Congress has taken the lead on the issue. The Domestic Prosperity and Global Freedom Act (H.R. 6) focuses on streamlining LNG exports, which will harness the abundant natural gas resources that until now have been bottled up at home.

In an increasingly global economy, isolationist policies hurt both America and our allies. In the wake of the recent Ukraine crisis, several European countries have directly appealed to the United States for more energy exports to help lessen Russia’s leverage in the region. Getting LNG exports online will take time, but unilaterally moving forward with them will send a clear message about our commitment to international stability.

The consensus in Washington is moving to take decisive action now. Policymakers are ready to equip the United States with a powerful geopolitical tool and plant important seeds of growth across the country. American natural gas production has already created 1.7 million new jobs, and experts estimate that LNG exports will stimulate as much as $73 billion in additional GDP annually.

There is no lack of global demand for U.S. resources. In Asia and Europe, demand has driven natural gas prices to levels as much as three times that in the States. But if America does not answer international energy calls, other countries will.

There is a cost to waiting. Investors and producers are closely watching lawmakers’ decisions. By failing to act, they are discouraging investment and infrastructure development and  eroding the United States’ competitive advantage. And in the absence of global demand, prices are likely to  fall to levels so low producers will leave natural gas  resources in the ground.

We have seen Washington and the Obama administration hold back on too many opportunities to foster America’s energy potential – the most recent in the President’s decision to delay the Keystone XL pipeline. Let’s hope that Congress’ lead will spur serious policy change and free up LNG exports to provide geopolitical balance abroad and growth and jobs here at home.

Thorning is senior vice president and chief economist with the American Council for Capital Formation and director of research for its public policy think tank. She is also director of the Act On LNG Campaign (www.actonlng.org).