Bipartisan Energy Bill Is the Right Move for the Economy
U.S. energy policy is a topic that will never go stale. The energy industry is critical to our nation, and it continues progressing through advances created out of American spirit, perseverance, and innovation. One recent example of America’s entrepreneurial spirit is the first shipment of liquefied natural gas (LNG) from Louisiana currently sailing to South America. This monumental moment exemplifies the major force that U.S. energy holds at home and across the world. As a result, when lawmakers in Washington attempt to modernize policy influencing this sector, they must act carefully and thoughtfully, without undue partisanship.
After initially stalling last month, the Senate is poised to once again take up S.2012, “The Energy Policy Modernization Act,” (EPMA), a bipartisan energy bill aimed at addressing 21st century challenges facing our nation’s energy industry. And though this important legislation was tied up over a funding controversy regarding the Flint, Michigan water crisis, it isn’t completely dead – and fortunately Senators from both parties have agreed to pursue providing aid to Flint outside of this critical piece of legislation.
Since passage of the last energy bill almost a decade ago, American technology and innovation has dramatically changed how we produce and use energy. In order to take full advantage of these changes, comprehensive energy legislation with collaboration from both parties must be addressed sooner rather than later.
The shale revolution pushed the U.S. into a new role of global energy leadership – one not held in quite some time. Last year, we recaptured the world title for oil and natural gas production, capping a remarkable transformation from a position of alarming foreign dependence to one of domestic abundance. But in order to properly leverage this change for the greater good, we must modernize a number of federal policies.
What many don’t realize is that in order to keep the momentum of our energy boom going, Washington must remove uneconomic barriers to investment in the industry. One such barrier would be removed by a provision buried deep in S. 2012 that would streamline the federal approval process of U.S. liquefied natural gas exports.
Growth in domestic natural gas resources has taken place under an antiquated regulatory framework that limits the full potential benefits of our energy resources. Under current law, there is no deadline for the Department of Energy (DOE) to make a final approval decisions on LNG export applications to non-free trade agreement nations. And though the administration has stated its intent to prioritize commercially viable projects, many applications have remained in limbo at DOE for many months. These regulatory roadblocks could jeopardize billions in U.S. investment with benefits for communities across the country.
Removals of barriers to U.S. energy exports—including both the recent greenlight to export crude oil and continued efforts to ease restrictions on natural gas exports—could benefit the U.S. economy substantially. In fact, two reports commissioned by the DOE to examine the impacts of increased LNG exports on the U.S. economy found that the macroeconomic benefits were overall positive, with the most recent report released in December concluding that the highest volume scenario examined could add $7–$20 billion annually in gross domestic product (GDP) over the period of 2026–2040.
Additionally, LNG exports will also allow the U.S. to strengthen its economic and security ties with foreign nations. And I have discussed in the past, one issue that sometimes gets lost in this complex debate is the legality of these DOE delays. As a member of the World Trade Organization (WTO), the U.S. is obliged not to restrict exports. In fact, the U.S. has successfully challenged Chinese restrictions of rare earth exports before the WTO. Delaying or limiting exports of natural gas not only contradicts fundamental and long-standing U.S. policy in favor of free trade, it undermines our global leadership position and breaches our commitment to WTO rules.
The attempt by bipartisan leadership in the Senate to modernize federal energy policies shows a broad-based commitment to supporting economic growth through one of the greatest blessings in the past 20 years: energy abundance. We must not let this historic opportunity pass us by. The recent shipment of LNG to foreign neighbors should be a valuable lesson in energy innovation. If we’re serious about ensuring a long-term American energy renaissance that yields a stronger economy, then we must encourage lawmakers to once again move forward on this historic collaboration and secure our energy legacy and to stop harming the U.S. economy by restricting LNG exports.