- The Washington Times
Sunday, June 29, 2014

Sen. Lisa Murkowski is looking to help drive the natural gas export rush and maybe even turn some heads into considering shipping oil, despite pricing and environmental concerns.

The Republican from Alaska, the fourth-largest oil producing state, is poised to become chairwoman of the Energy and Natural Resources Committee if Republicans win the Senate in elections this year. Her father held that position 13 years ago.

Among Ms. Murkowski’s top priorities are increasing U.S. exports of crude oil and natural gas, called LNG because natural gas needs to be liquefied before it can be shipped.

“Part of my push to move toward exports is to get our oil in better alignment — so that we can continue to produce at a level and at a rate that continues to spur our economy along,” said Ms. Murkowski. “Also think about [Russian President Vladimir] Putin’s continued ability to utilize energy as a weapon. If we can, through our exports, allow for a level of insulation — allow for a level of stability geopolitically — is this not a good thing for us?”

Because of the boon in hydraulic fracturing, or fracking — a drilling process in which chemically treated water is plunged underground to help shatter rock and free natural gas — the U.S. now produces more natural gas than any other country. Yet Russia, the second-largest producer, is the world’s top net exporter, followed by Qatar and Norway.

The reason is simple: U.S. law limits the number of countries to which energy companies can export. Companies are required to get “public interest” approval from the Energy Department if their potential buyers haven’t signed free trade agreements with the United States. That stipulation restricts exports to all European nations, along with China, India and Japan — where natural gas prices are the highest.

If Ms. Murkowski had her way, that law would be changed to include all counties that participate in the World Trade Organization, along with those that have free trade agreements with the U.S.

“Japan is coming to us here in the United States — and they’re not just coming to me as the ranking member — I know that they’re talking to anybody that will listen, and they’re saying: Can you please hurry it up on these export applications because as a nation, we keenly want to purchase U.S. LNG,” said Ms. Murkowski. “We are providing them with a resource that they desperately want, that they desperately need.”

Exporting natural gas would help build U.S. influence globally, leading to stronger ties with allies and help deter bad actors, such as Russia, that look to use abundant energy resources as a way to manipulate the geopolitical scene, she said.

Over the past 3 years, the Energy Department has used its discretion to approve only six applications to export LNG. It is sitting on 24 other applications, some of which have been pending for more than two years. Only one, Cheniere Energy’s Sabine Pass Liquefaction terminal on the Texas-Louisiana border, has received the final construction go-ahead from the Federal Energy Regulatory Commission. It is scheduled to begin operation next year.

Opponents worry that exporting natural gas or crude oil ultimately will drive up domestic prices because supplies will dwindle.

“We have crossed a line into an era when we could be massively exporting America’s natural gas, sending the jobs and consumer benefits abroad along with the fuel,” Sen. Edward J. Markey, Massachusetts Democrat, said in March, predicting higher domestic prices. “The level of exports approved is now more than every single American home consumes.”

Those in the manufacturing sector worry that if LNG exports are approved too hastily, market volatility could push up costs or make investment uncertain within that industry, which relies on natural gas byproducts.

“Exporting such a large volume of this strategic commodity will raise domestic natural gas and electricity prices for every American, undermine manufacturing competitiveness and cost the nation good-paying jobs,” America’s Energy Advantage, a coalition of industrial companies such as Dow Chemical Co. and Alcoa Inc., said in a statement.

Ms. Murkowski challenges that thinking.

“Just because you have a product leaving a country doesn’t automatically assume that you’re going to see an increase in price or that there will be a limitation of supply,” said Ms. Murkowski. “It takes you back to Econ 101: If you have a bigger market, a more stable market that is clearly available when you’re allowed to export, then that increases production domestically — which will work to reduce the overall price of oil. As the overall price of oil is reduced, then American consumers will see that benefit.”

Environmentalists are also concerned.

Increased LNG exports will “increase fracking and carbon emissions, put sensitive ecological areas at risk, and do nothing to address our country’s energy challenges,” said the Sierra Club. Exporting LNG to overseas markets would be a “dirty, dangerous practice that lets the industry make a killing at the expense of human health,” the environmentalist group said.

That argument undermines the technical advances the industry has made over the years, Ms. Murkowski said, challenging naysayers to visit Alaska’s North Slope, where horizontal drilling is at the forefront compared with older sites such as Alaska’s Prudhoe Bay.

“It’s important that everyone acknowledge the gains and the advances that we’ve made with the technology that allows us to reduce the footprint when it comes to exploration and production, to minimize our environmental impact in ways that are incredibly consequential,” said Ms. Murkowski. “I don’t think that the industry gets a lot of credit for how they are accessing these resources.”

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