A backlash is brewing against U.S. LNG exports

Washington lacks 'political comfort' with energy exports, API economist says

April 11, 2012

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Canadian producers counting on exports of liquefied natural gas (LNG) in the United States to jump-start a rally in North American prices could be pinning their hopes to a political time bomb.

Sensitivities in Washington are not limited to imports of Alberta bitumen, it turns out. Legislators on Capitol Hill also lack a “political comfort” with energy exports, says Steve Crookshank, a senior economist at the American Petroleum Institute.

He warned of a looming pushback against outbound shipments of the super-cooled product at a Calgary natural gas conference held this winter by the Canadian Energy Research Institute.

Seven LNG export applications are currently under review by the U.S. Department of Energy. Even if half of them are approved and built, the U.S. could add 22 million tonnes of LNG per year to global markets, RBC Capital Markets calculates.

The liquefaction schemes are seen as one way to ease a storage glut that continues to weigh on prices and eat away at Alberta’s traditional share of the U.S. export market. But not everybody is keen to see them approved.

The North America Natural Gas Security and Consumer Protection Act introduced by Representative Ed Markey (D-Mass.) this past February illustrates the point. It would prevent the U.S. Federal Energy Regulatory Commission from approving any export terminals until 2025.

Another Markey-sponsored bill, called the Keep American Natural Gas Here Act, would ban foreign sales of natural gas produced on federal lands.

The legislation is a repeat of apprehension that toppled TransCanada Corp.’s original application to deliver oil sands production to refineries in Texas and Louisiana, Crookshank told Calgary executives. The pipeline exposed deep-seated anxieties about energy exports among legislators, he said. “It’s hard to imagine they would treat natural gas produced domestically any more gently.”

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3 Responses to “A backlash is brewing against U.S. LNG exports”

  1. dickvm says:

    If we ban export of LNG in the name of protecting our national security then we should also ban the export of other items that are, may be, needed here. That list would include:

    All food products including grains, produce, and meat.

    All educational efforts that are subsidized by the tax payers including the education of hordes of illegals.

    All paper and paper products.

    Coal and other energy sources.

  2. Matt Schilling says:

    I doubt Markey wants to ban LNG exports because of national security. He’s trying to kill fracking. Kill the market for nat gas and fracking goes away. That’s what I think is going on. The hysterical, irrational fear and loathing of fracking in particular, hydrocarbons in general, and technology even more generally is awesome to behold. The lunatics have gone from drooling and howling near a garbage can in a park to sitting in places of power.

  3. balois says:

    Spot on. Enviroutopians want to protect the planet from humans meaning back to the stone age and life expectancy 25 years. But god forbid, their Volvo s have no more gas, they ll expect to import – and the rest of the world to supply them – whatever they need, in order to pursue their higher mission.