This morning the Senate Energy and Natural Resources Committee will hold a hearing on the Opportunities and Challenges for Natural Gas. A number of witnesses are scheduled to testify about the future of America’s natural gas, the environmental factors surrounding its production and use and its future as an export commodity.
The recent boom in natural gas production — some analysts estimate there is enough recoverable gas in the United States to meet current and future needs for the next century — has led to lower prices and producers looking for new markets. It has also led to resistance from several environmental groups. The Senate hearings are important because of the large natural gas reserves on public lands and federal approval from the Department of Energy is required to export liquefied natural gas (LNG).
On the environmental front, many of the questions about the safety of hydraulic fracturing, the method that has allowed operators to access tremendous reserves of hydrocarbons, including natural gas, have largely been put to rest. Despite what you may hear, fracking has been used for more than 50 years and without any ill effects whatsoever in the vast preponderance of cases. In light of those facts, a strange alliance has been forged among several groups like the Sierra Club, the Natural Resources Defense Council and the American Public Natural Gas Association, who now seek to limit exploration and production of natural gas by fighting the exportation of LNG. Thinly disguised as an effort to keep prices down for American consumers, their efforts are aimed at slowing the exploration and production of natural gas rather than protecting American consumers.
The DOE is tasked with approving exportations of LNG or refined products to our trading partners, but producers want those exports licenses expanded to other countries as well. New markets mean more potential for exploration and production. Despite the fact that natural gas is one of the cleanest, efficient and most plentiful sources of energy, the Sierra Club and similar organizations do not like hydrocarbons of any kind.
Five years ago natural gas prices reached more than $13 per thousand BTUs. New exploration and production techniques including improved fracking brought so much gas on line prices plummeted and now hover around $3.25. Low prices have meant fewer rigs operating. During the first week of February of last year, according to Baker/Hughes, there were 14 rigs drilling for gas in Nacogdoches, Shelby and San Augustine counties. This year there were three. An export market would bring more opportunities for exploration and production in East Texas. It would help our balance of trade. It would create jobs for Americans.
Last year, DOE Secretary Steven Chu said exporting natural gas means wealth comes into the United States. That statement is something a number of people did not expect to hear from Mr. Chu but it was the truth.
We hope the Senate Energy and Natural Resources Committee recommends the Senate become fully engaged in the production of natural gas and more importantly the exportation of LNG. It will be good for the environment, good for the United States and good for East Texans.