In 2016, the first LNG cargos were shipped and growth in U.S.LNG exports has been considerable.
This has made material contributions to narrowing the U.S. trade deficit. According to the EIA, natural gas trade accounted for 5% of U.S. energy import value and 22% of energy export value in 2020; this resulted in an annual surplus of $26 billion.
In August 2022, the monthly U.S. LNG trade surplus peaked at $4.95B. That month the trade deficit was $67B ($261B exports, $328B imports). Without LNG trade, the August 2022 deficit would have been $72B, or 7.5% higher.
On Tuesday, March 7, 2023, concurrent with CERAWeek in Houston, the leadership of several prominent energy trade associations and think-tanks convened a half-day meeting with senior G7 energy delegates dubbed The Joint Energy Security Forum. Ahead of the deliberations that will lead to and be a part of the G7 leadership meeting on May 19-21, 2023 in Hiroshima, Japan, the Forum discussed the importance of natural gas in meeting global energy security and climate-related goals, especially in the context of Russia’s maligned use of its natural resources.
Washington Times reporter Sean Salai pursues the Montgomery County, Maryland imminent natural gas ban story. With a population of 1.1 million, Montgomery County is Maryland’s largest county and adjacent Washington, DC. In December 2022 and seeking to mitigate GHG emissions, the County Council unanimously passed legislation to ban natural gas heating in new buildings beginning in 2026.
The leadership of the U.S. House Energy & Commerce Committee (E&C) under Chairwoman Cathy McMorris Rodgers are hosting a series of roundtables in order to help establish its agenda for the 118th Congress. Critically, some of these roundtables are focused on Energy. The first one was held on January 10th, 2023 with the theme of “Unaffordable Energy Costs” (the link is here). The second, with the broad theme of Energy Security, took place on Thursday, January 26th, 2023.
EPRINC’s President Lucian Pugliaresi presented at this E&C Roundtable. His remarks and associated charts can be found here. The Committee also invited David Gattie, Associate Professor of Engineering, University of Georgia, and Senior Fellow, Center for International Trade and Security, Pat O’Loughlin, President and CEO, Buckeye Power, Inc. and Ohio Rural Electric Cooperatives, and Dr. Edmund O. Schweitzer, III, Founder, Schweitzer Engineering Laboratories. The recording of the Roundtable is accessible at this link.
EPRINC has been at the forefront of U.S. policy discussions relating to Energy Security. During the early 1970s and under the leadership of John Lichtblau and Larry Goldstein, EPRINC (then known as PIRINC) were critical in informing leadership of the U.S. Congress on the importance of the establishment of the Strategic Petroleum Reserve as a key component of America’s energy security apparatus/architecture (choose one).
Per its mission, EPRINC has continued to be involved in energy policy discussions, security and otherwise, providing its perspective on the need for efficiency and matching benefits to costs. More recently, beginning in November 2021, EPRINC has presented testimony four times on a broad range of energy matters (RFS, leasing on public lands, cost challenges of the Energy Transition) to the U.S. Senate’s EPW Committee as well as the U.S. House E&C and Natural Resources Committees.
Based on the expertise that EPRINC presented at these Hearings, EPRINC received further inquiries from commercial and governmental entities for comment, perspective, and data on the energy matters of the day.
The Institute of Energy Economics Japan (IEEJ) in Tokyo and the Energy Policy Research Foundation, Inc. (EPRINC) in Washington DC have hosted an in-person workshop on December 15-16, 2022 in Washington, DC. The workshop, Global LNG, Energy Security, and the Transition, brought together a small group of policymakers, practitioners, and experts from the U.S., Asia, and Europe to chart a path forward to address fundamental challenges of meeting rising global requirements for LNG, new threats to energy security, and measures to cost-effectively address the challenges of the energy transition. The workshop supported the six-year joint effort of IEEJ and EPRINC on the role of LNG in sustaining global energy security and worldwide requirements for new energy supplies.
Prior to the Russian invasion of Ukraine, world energy markets were experiencing sustained shortages and rising prices from years of underinvestment in oil and natural gas production. Today, pricing pressure on LNG continues to rise well above historic trends from rising demand in Europe as the continent searches for alternative sources to replace lost supplies from Russia. Of special concern in the current market environment for Asia is the severe cost constraints in using LNG. The rapidly rising cost of LNG is especially troublesome for the developing world in Asia as sustained high prices will incentivize continued reliance on coal and petroleum liquids. High prices for LNG will undermine initiatives throughout Asia to pursue Net-Zero aspirations.
Securing adequate new supplies of LNG for the world market requires overcoming a series of unique financial, policy, and regulatory challenges. LNG projects require large-scale financial commitments binding sellers and buyers for much as 20 years for projects to reach final investment decision. In many cases, aspirational goals seeking to abandon so-called legacy fuels and leap directly to the renewable fuels and low carbon technologies of the future can be counter-productive and undermine long-term progress to Net-Zero outcomes. The energy transition will be both long and difficult. LNG and natural gas offer numerous opportunities for both the developed and developing world to enhance energy security, accelerate the transition away from coal, and make substantial progress in achieving lower carbon emissions. International financial institutions, public financial institutions and private banks will have to work together to ensure that LNG development can proceed with adequate long-term commitments and sufficient investment to bring substantial volumes of new supplies to the market.
Venue and Discussion Topics
Our excellent venue, the Cosmos Club, permitted extensive opportunities to discuss the broad challenges of energy supply and geopolitical stress points. We identified five subject areas to focus the panel presentations and discussions. These were:
Additionally, EPRINC and the Embassy of Japan in Washington DC cohosted a dinner to facilitate more discussion between participants the evening of December 15.
On Wednesday, November 9 at noon, EPRINC President Lucian Pugliaresi and EPRINC Fellow Trisha Curtis participated in a Heritage Foundation panel called “What Will Happen to Energy in the Next Congress?” The panel, hosted by Heritage’s Diana Furchtgott-Roth, was described by Heritage as follows:
“The soaring price of energy concerns all Americans, from high costs at gasoline pumps to exorbitant electricity bills. The solution is under our own feet. The United States has energy reserves of oil and natural gas that would allow us to lower prices by increasing production of energy and pipelines, which are needed to move the resources across the country. So, what might the next Congress do to lower energy prices?”
The video of the event can be found on the Heritage Foundation website, here.
EPRINC Fellow Tristan Abbey has written this open letter titled “Did Biden Break the Strategic Petroleum Reserve?” The letter was sent on October 27, 2022 to Senators Joe Manchin and John Barrasso, chairman and ranking member, respectively, of the U.S. Senate Committee on Energy and Natural Resources.
The letter calls for a bipartisan investigation into the operational impacts of the White House’s “historic 180-million-barrel drawdown” focusing on the following quetisons:
EPRINC President Lucian Pugliaresi has co-authored an article published on October 25, 2022 in RealClear Energy entitled “Bad Energy Policy Ideas Never Die“. In it, they discuss their concerns with recent public policies related to energy that have been proven to be major issues that will be difficult to recover from. A quote from the article with their proposed solution is below:
“To the fearful leaders in our country: step out on your turf and support the domestic oil and gas industries in ways that will build investor confidence and calm markets. There simply is no other way to meet the future without a strong domestic base for energy and materials. Others will take note, including troublemakers we face now and those we’ll face in the future.”
Members of the Organization of Petroleum Exporting Countries (OPEC) have recently made the decision with other oil producers (OPEC+) to slash production by 2 million barrels a day. The move—seen as led by Saudi Arabia and Russia—immediately sent oil prices higher, defies entreaties by the Biden administration for production increases to ease inflation and stabilize the global economy, and could provide a vital cash lifeline to Vladimir Putin’s war efforts in Ukraine.
JINSA held a discussion of the factors that contributed to this move, what it signals about Saudi relations with the United States, Russia, and other world actors, why the Biden administration was unable to prevent the production cut, and what the United States should do next. EPRINC’s Larry Goldstein participated and provided his insight based on his years of experience and expertise on the matter.
A transcript of Larry’s comments can be found here. The video of the event is below
A story in today’s Wall Street Journal (September 14, 2022) points out that the while U.S. consumers are getting a reprieve from high gasoline prices, a large jump in electricity and natural-gas costs are increasing their energy bills as winter approaches. The index for electricity in August climbed 15.8% over the same month a year ago, the biggest such 12-month increase since 1981. The story goes on to point out that electricity price increases have been driven by rising prices for natural gas, which powers about 37% of U.S. electricity production and that heating and cooking costs have increased 33% over the last 12 months.
A recent article published in Commonwealth Magazine by EPRINC Trustee Larry Goldstein and former Congressman Joe Kennedy highlight the dire circumstances faced by many low-income Americans as we head into winter. A main source of assistance for low-income families is the federal Low-Income Home Energy Assistance Program, or LIHEAP. The program is now facing a 50 percent funding cut at a time skyrocketing energy cost. Rising energy costs also highlight’s the importance of sustaining adequate production of legacy fuels until low-cost and low-carbon alternatives are freely available to consumers.
On Wednesday, June 22, 2022, the U.S. House Energy & Commerce Committee’s Subcommittee on Energy held a hearing titled, “Legislative Hearing to Strengthen Energy Infrastructure, Efficiency, and Financing.” Under consideration were several pieces of legislation including the “Securing America’s Critical Minerals Supply Act” (H.R. 1599), the “Energy Accountability Act” (H.R. 5292), the “Guaranteeing Resilient Installations for Defense Act” or the “GRID Act” (H.R. 8053), and the “Tribal Energy Investment Act of 2022” (H.R. 8068). Along with the legislation, Subcommittee Members pursued broader themes focusing on the recent increases in transportation fuel prices. EPRINC President Lucian Pugliaresi was invited to testify along with five other experts from trade associations, universities, and think tanks.
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