In anticipation of the Department of Energy's long-awaited macroeconomic study on the impact of exporting liquefied natural gas, stakeholders on either side of the debate are intensifying their lobbying. During today's OnPoint, Bill Cooper, president of the Center for Liquefied Natural Gas, discusses his organization's new campaign focused on influencing the public and political discussions on LNG exports. He also weighs in on likely scenarios for how DOE may proceed with permitting.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Bill Cooper, president of the Center for Liquefied Natural Gas. Bill, thanks for joining me.
Bill Cooper: Thank you.
Monica Trauzzi: Bill, CLNG has launched a new initiative to help promote and accelerate the push to export liquefied natural gas out of the U.S. How are you hoping to influence the public and political discussions on LNG exports?
Bill Cooper: Well, the purpose behind the initiative is to get some fact-based information about LNG exports and the benefits that LNG exports can bring to the country. What we have seen before we launched the initiative, of course, is a lot of misinformation that needed to be corrected, and so the main goal is to provide that information for those who are interested, particularly the policymakers.
Monica Trauzzi: So zeroing in on the Hill, specifically which policymakers are you focused on, who do you want to target, who do you want to talk to?
Bill Cooper: Well, certainly anybody that has an interest in it, we'd like the opportunity to educate them about the benefits of exports, but certainly committees of jurisdiction and lawmakers that are in the shale gas areas of the country.
Monica Trauzzi: There's a large group of members of Congress that are opposed to exports, specifically those in areas where the chemical industry is strong, because they're afraid that by exporting LNG, natural gas prices will go up, and the chemical industry will be forced to export jobs. How do you respond to that?
Bill Cooper: Well, I think that was the fear initially, but as those folks learned more about the markets themselves and the feed stocks that the petrochemical industries need, we're finding out that that opposition tends to wane, as the information is available to them. So that's part of our goal as well.
Monica Trauzzi: Sen. Wyden recently sent a letter to Energy Secretary Chu, asking him to explain how DOE exactly is going to proceed with its decision on LNG. We don't know a whole lot about the logistics of what DOE is going to do. Why do you think DOE has been so mum on the issue?
Bill Cooper: Really don't know. We have been in contact with DOE off and on since last November, when they announced the two studies that would inform them in this -- in their processes. We really don't know the reasons for the secrecy behind it. I'm sure they're valid. We just hope that the process will be moved forward and allow these applications to move to their fruition.
Monica Trauzzi: And the release of this report has been punted a couple of times. Do you suspect --
Bill Cooper: A time or two.
Monica Trauzzi: A time or two. Do you suspect that that was politically motivated, that they were trying to push this past the election so that it wouldn't become an election issue?
Bill Cooper: Well, I think DOE would say that they're just trying to get the study right. They want it to be correct and they want it to be accurate, because they understand the magnitude of the decisions that they face. But I'm really not in a position to speculate much beyond that.
Monica Trauzzi: Energy analyst Kevin Book has said a likely scenario is that DOE will move forward with permitting four or five major projects, placing a limit on total exports. Would that be a fair and balanced approach to moving the industry forward in an acceptable way, while also mitigating any potential price spikes?
Bill Cooper: No, I don't think so. We think that the way the law is crafted in the Natural Gas Act, the regulations that DOE has on the books today, and the way DOE has applied that in the past, suggests that these projects in the absence of evidence from the opponents to suggest that it's not in the public interest, and that being the statutory buzz words, that all the applications should be approved.
Monica Trauzzi: So this should be an all or nothing approach?
Bill Cooper: Well, we wouldn't say -- we wouldn't say nothing, because the applications that have been filed to date meet the statutory criteria to be approved, and there is no credible evidence introduced in those cases by opponents to those applications. So I guess we would argue that it should be all. We wouldn't say nothing.
Monica Trauzzi: So the reason why there's so much interest in exporting LNG is because our natural gas supplies are so abundant in the U.S., but how can we move forward with this idea of exporting our resources when certain shale plays are still in question? We don't know what all the different states with natural gas reserves are going to do in terms of hydraulic fracturing. There are a lot of unknowns right now. So are we walking a little too quickly moving forward with LNG exports when there's still uncertainty on the shale gas front?
Bill Cooper: No, not at all. What we do know is that every expert that has looked at the supply picture here in the United States has said that we have an ample amount of natural gas supply and production, not only to meet our current needs, but also to meet other demand growth areas here, as well as being able to support exports with minimal price impacts. Now there's always going to be something in the future that we don't know, so that's why the Natural Gas Act provides a mechanism for the regulator, in this case DOE, to be able to come back later and modify its authorization if it thinks there's an adverse effect on the public need for the gas.
So what we say is that we ought to move forward with the facts as we know them today, and then if down the road in the future that dynamic changes so that it is an adverse impact on the American consumer, then the regulator can take the appropriate action at that time instead of trying to predict the future.
Monica Trauzzi: What do you think the sweet spot is for natural gas pricing in the U.S.?
Bill Cooper: People are all over the map on it. I would hesitate to even try to pick a number.
Monica Trauzzi: Some people say $3, $4, that seems about right.
Bill Cooper: Well, certainly $3 or $4 is not -- would not have a negative impact on the economy, that's for sure.
Monica Trauzzi: OK. We'll end it there. Thank you for coming on the show --
Bill Cooper: Thank you.
Monica Trauzzi: -- and nice to see you again.
Bill Cooper: Good to see you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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