Export natural gas: Help our allies, increase security

These days there doesn’t seem to be many things Democrats and Republicans can agree on, but after a recent bipartisan Congressional Delegation trip to Ukraine, we came back in agreement on one thing. Visiting Kiev, and speaking with Ukraine’s leaders it is clear that while their economy is faltering, there are steps that we can take, in addition to sanctions, that will hamper Russia’s economy and future border advances.

Few countries would like to import American natural gas more than Ukraine.  In the wake of Russia’s annexation of the Ukrainian peninsula of Crimea, and ongoing military support of rebels in Eastern Ukraine, the people of Ukraine are still dependent on Russian natural gas.  In fact, nearly thirty percent of all the natural gas used in Europe is supplied by Russia. 

{mosads}President Obama often calls our country the Saudi Arabia of natural gas. A large bipartisan swath of Congress agrees. Thanks to new extraction technologies and other advances, the available natural gas resources in the lower 48 states have significantly increased in recent years.  According to a study conducted by the U.S. Energy Information Administration, our domestic proved reserves of natural gas increased by 10 percent in 2013 and reached a record high of 354 trillion cubic feet. As we extract this resource is it imperative that we ensure that it is extracted safely without negatively impacting the environment in the surrounding communities. We have a responsibility not only to our economic security but to safeguarding our beautiful country for future generations.

A year after Obama called for the lowering of greenhouse gas emissions and a more robust emphasis on renewable energies, the Federal Energy Regulatory Commission (FERC) approved four Liquid Natural Gas (LNG) Export terminals; previously only one expert terminal had ever been approved by FERC. These approvals are a clear indicator that the Obama administration comprehends the major economic impact that these terminals could have in countries like Ukraine and they are a critical part of the necessary steps toward energy security at home and aboard.

It has become clear to us, and many others, that the U.S. is sitting on a unique opportunity to advance our economic and national security goals.  By increasing our ability to export natural gas – in the form of liquefied natural gas or LNG – to Europe, the U.S. can weaken Russia’s strategic stronghold while boosting our domestic economy by increasing energy exports.

Russia continues to be incredibly vulnerable to changing winds in the energy sector.  The recent downward spiral in global oil prices took a major hit on Russia’s economy and its currency.  Furthermore, nearly half of Russia’s federal budget is tied to revenues from energy extraction and fossil fuel exports. 

Competing with Russia for European natural gas demand is not something that is going to happen overnight.  LNG terminals must be constructed both on our domestic end as well as in Europe.  According to The Federal Energy Regulatory Commission (FERC), five LNG export terminals have been approved for construction.  When complete, those terminals will have the capacity to export around 9.2 billion cubic feet of natural gas per day.  Additional terminals have been proposed and are currently under review by FERC.

Our economy will start to benefit before any natural gas hits European shores.  According to economic analysis, the investment required to build LNG export facilities and increase natural gas production is forecast to put up to 45,000 people to work.  Once the LNG shipments are underway, the net result from increased exports is expected to drive an increase in U.S. households’ real income and welfare.

The revenues from LNG exports will also result in additional tax revenues, from existing taxes, which all American taxpayers should welcome.  As the tax revenues from LNG exports climb as shipments increase, we should have a serious debate on the best way to allocate them, including potentially using those funds to fill shortfalls in our federal highway program. 

Projecting America’s power around the globe comes in many forms.  Energy exports to our friends and allies in Europe are the ultimate soft power strategy.  In the not too distant future, the U.S. should emerge as a leading exporter of natural gas and, in the process, give nations across the globe a welcome alternative to their dependence on volatile trading partners.

In the weeks and months ahead, Congress and the White House should enact and support policies that recognize the many benefits – both economic and in our national security – that can be obtained through the successful development of a robust LNG export capability here in the U.S. 

Calvert represents California’s 42^nd Congressional District and has served in the House since 1993. He sits on the Appropriations Committee. Israel represents New York’s 3^rd Congressional District and has served in the House since 2001. He sits on the Appropriations Committee.