By Mitch Jones
A new Short Term Energy Outlook released by the United States Energy Information Administration this week predicts that the U.S. will become a net exporter of natural gas this year and will remain so for the foreseeable future. That’s a remarkable turn of events given that the first liquefied natural gas (LNG) exports from the lower 48 states didn’t happen until February 2016. In addition to the existing pipelines for export of LNG to Canada, pipeline capacity for exports to Mexico are set to almost double by 2019. In addition, LNG export facilities are being expanded at Sabine Pass in Louisiana and Cove Point in Maryland is set to open later this year. Four additional facilities are currently under construction and expected to be exporting by 2020 when the United Sates is set to become the third largest exporter of LNG in the world.
The drive to ship natural gas overseas isn’t limited to LNG. The Mariner East 2 pipeline in Pennsylvania is being developed to export natural gas liquids for the plastics industry. The growth of the exploitation of fracked gas in the Marcellus Shale has been a boon for the plastics industry. It relies on petrochemical manufacturing to turn ethane, found in “wet” natural gas along with methane and other hydrocarbons, into plastics. Since 2012 chemical companies have aggressively invested in petrochemical plants and export facilities focused on profiting off the ethane glut that results from fracking.
The desire for American natural gas exports also isn’t limited to our own shores. INEOS, a chemical company still partly based in the tax-haven of Switzerland, started in September 2016 to ship fracked natural gas liquids from the Marcus Hook Terminal of Pennsylvania to the Grangemouth petrochemical plant in Scotland. The main shareholder of INEOS, anti-union billionaire Jim Ratcliffe has been a major lobbyist for fracking and shale gas in the United Kingdom and beyond. Crossing the Atlantic with the “Shale Gas for Europe” slogans on Chinese-made “Dragon Ships”, INEOS apparently doesn’t care about the negative impacts on the people and the environment in Pennsylvania, where the fracking fever for the Dragon Ships and others rages. The 350-mile Mariner East 2 pipeline is tied to the natural gas liquids exporting business championed by INEOS.
Both the LNG export boom and the push to export natural gas liquids such as ethane is tied to the spread of fracking. We know that fracking is an inherently dangerous activity that threatens communities, public health and local environments. But it isn’t just at and around the drill pads that fracking development is a threat. Already the Mariner East 2 pipeline development has led to 15 families losing their well water because of a drilling accident related to the pipeline. In July, Sunoco – the developer of the pipeline – spilled 1,500 gallons of bentonite mud into a tributary of Chester Creek. At the end of the month an Environmental Hearing Board judge issued an order that stopped all drilling across the state through August 7. This is on top of the harms others across Pennsylvania and across the country have suffered because of the growth of fracking.
The push for fracking occurred under the call for “energy independence” which has mutated with the growth of exports to become “energy dominance”. The friends of the oil and gas industry in Congress and the Trump administration, ever eager to do the bidding of the fossil fuel cartel, have been unsatisfied with the rapid growth of natural gas exports and have been trying to rush the approval of LNG export facilities, including a current push in the Senate under the guise of energy “modernization”. That bill also contains language that would shorten the time during which pipelines would have to be approved, cutting off grassroots, community lead opposition to pipelines coming through communities or near schools.
But we know that this push for more and more exports isn’t about energy “independence” and the only “dominance” being sought is over the victimized communities in sacrifice zones across the country. Instead, this push is driven by a desire for profits. While prices for natural gas in the United States remain low relative to the prices in other countries, oil and gas companies drill here, undercut competitors elsewhere, and drastically increase sales. Overtime the push for an integrated global natural gas market will lead to higher prices here, and higher profits for the oil and gas companies. In fact, a 2012 study on LNG exports conducted by the Department of Energy’s Office of Fossil Energy found that while increasing exports may be an economic boon to some Americans, those who rely on wages for their income (as opposed to investment dividends or stock benefits, for example) were not likely to see any benefit and could see lower wages in real terms.
Already over the past four decades this country has seen a transformation in public policy that has shifted more and more of our economic growth away from wage earning working class families. Instead, economic growth increasingly benefits the class of executives who rely on investment income, not wages. Just this week the New York Times published an account of a report by Thomas Piketty and others that shows that while in 1980 low and middle income families saw the largest income growth, in 2014 the largest income growth went to the richest among us. The newly formed think tank The People’s Policy Project also recently showed that the richest among us capture more and more of the wealth created in this country “not because they work for it, but merely because they own income-generating assets like real estate, equity, and debt.”
The push to export more and more fracked natural gas – either as LNG or as natural gas liquids – is part of the same suite of policies that have overturned the economic reality of just a few decades ago. While the financial rewards accrue to the top, it’s the families in Pennsylvania and Oklahoma and Wyoming that suffer the contaminated water, earthquakes and social ills that follow boom-and-bust cycles for the oil and gas companies.
Instead of pushing for easier approval of LNG exports, Congress should be pushing a real transformation of our energy system that will lead to real benefits for working class families. A just transition to 100% clean renewable energy with investments made to build our local infrastructure, incentivize domestic production of wind turbines and solar panels, and in the communities that have suffered at the hands of the oil and gas industry for decades is the only energy policy we should be thinking of now.