Don’t snatch defeat from the jaws of victory

America today may seem overwhelmed by problems. Our often sluggish economy, turmoil abroad, the specter of escalating climate change all dampen future optimism.  These are difficult challenges, yet they are not insurmountable. Perhaps we should heed Thomas Edison’s simple advice.  “There’s a way to do it better,” he said. “Find it.”  With the nation’s vast new natural gas supply, perhaps we have “found it.” 

In the last 10 years, American natural gas production has expanded by over 30 percent – an all-time record level. It is expected to grow 50 percent in the next quarter century, according to the Energy Information Administration.  The increase has decreased consumer prices and is beneficial to the environment – helping reduce U.S. greenhouse gas emissions by almost 10 percent below 2009 measurements.

{mosads}Gas development has been so successful, in fact, that the U.S. now has a surplus of natural gas for domestic markets, creating a major opportunity.  The U.S. could be one of the world’s great natural gas exporters, extending the benefits of our production boom around the globe and strengthening the economy.

A recent study from the Small Business & Entrepreneurship Council highlighted the potential benefits of gas exports for the American economy, noting that low gas prices in the U.S. and high prices elsewhere in the world mean that America has a real market advantage and economic opportunity – one that will stimulate investment, stimulate production, improve the trade balance, and create jobs.

Ramping up gas exports would flow attractive options to energy-hungry countries such as Japan, Korea, India and China to fuel economic growth with cleaner burning gas in lieu of coal.  More American gas could aid our allies in Europe and elsewhere, and cut their dependence on supplies from unstable sources.  Gas has been used as an economic and political weapon by hostile nations.  American exports could allow more environmentally acceptable options. 

The U.S. already has in place streamlined approval processes for those countries with which it has Free Trade Agreements; for countries with which we do not have such agreements, the export approval process can be slow or of uncertain duration.

It should be simple to address impediments to exports.  Yet, there are barriers.  To be exported worldwide, gas must first be liquefied.  The liquefied natural gas, or LNG, requires special terminals and export facilities that are licensed and regulated.  The good news is that the Obama administration has given the go-ahead for LNG exports and the exports have broad, if not universal, bipartisan support. Four export terminals are now under construction and two more have been approved. The bad news is that because of bureaucratic red tape and lobbying by special interests opposed to exports, the approval and construction process for additional terminals can take years.

A bill currently being considered by Congress would bring relief from these outdated constraints.  The bill would require regulatory action on applications to build export terminals within 30 days after completion of environmental review.  That would be a major step forward in encouraging investment, minimizing uncertainty, and putting the U.S. on the path toward becoming a dominant energy exporter.

The energy boom has already delivered tremendous benefits.  It has driven America’s recovery from the Great Recession – energy-related jobs account for virtually all of our net job growth since 2008.  It has kept energy prices stable and relatively low.  And it has taken a bite out of greenhouse gas emissions by substituting gas for coal in electric generation and replacing retiring nuclear or oil fired generation.

Holding us back from finding Edison’s “better way” are aging government policies designed for an era of energy scarcity rather than today’s reality of abundant and growing supplies.

Edison’s wisdom is relevant.  A stronger economy, more jobs, progress on climate change, stronger allies, weaker adversaries, and a more stable world, can be achieved, all without reliance on taxpayer supports.  And, the world will be a better place with a cleaner, flexible energy source. Now that we have “found it”, let’s not throw it away.

Hollis is a partner at Duane Morris LLP, a firm that represents among its clientele businesses in the LNG industry.