Senate committee tackles energy policy in first hearing

Experts testify on natural gas exports, fracking

Estimated fossil fuel reserves in the U.S. Courtesy USGS.

By Bob Berwyn

SUMMIT COUNTY — The U.S. Senate Energy and Natural Resources Committee this week tackled the question of an American energy policy in the context of the country’s natural gas boom by trying to find some bipartisan common ground on issues like fracking and liquid natural gas exports.

The fracking boom, along with other new technologies, has put the U.S. on the verge of becoming the world’s leading oil producer, ahead of Saudi Arabia. The U.S. is already exporting significant amounts of natural gas, with more export mega-projects poised to come online.

By some recent estimates, the natural gas boom could give the U.S. a reliable energy supply for 100 years or more, helping the country achieve a long-sought goal of energy independence.

In their opening statements, Republican members of the committee tellingly never mentioned fracking and cautioned against adopting what they call one-size-fits-all regulations, while Democrats sought to address emerging public health and environmental issues associated with intensive fossil fuel development, including climate change.

Colorado Governor John Hickenlooper was among the witnesses testifying before the senate panel, explaining that his state’s natural gas boom is also fueling a resurgence in manufacturing.

“The real transformation here is, we can see a natural gas supply that lasts 100 years … We’re finding more, and it’s getting cheaper,” Hickenlooper said, explaining that the Colorado is trying to develop a national model for natural gas extraction, including “a comprehensive and rigorous regulatory environment without stifling growth.”

Along with that, the governor emphasized Colorado’s push to do more research on the environmental and health impacts of franking and drilling, including several studies planned for this year.

And despite paying lip service to research, Hickenlooper twice referred to “drinking” fracking fluid during his testimony, a demonstration that has been criticized as favoring cheap publicity stunts over science-based decision making.

But national fracking rules could give the energy industry more certainty and help reassure the public as the country ramps up fossil fuel development.

“We need national safeguards to protect the public,” said Natural Resources Defense Council president Frances Beinecke, explaining that, in three decades of working on environmental policy, she’s never seen an issue as contentious as fracking.

“People want to know their water and air is safe, that their children are healthy,” Beinecke said, pointing out that some energy development operations are exempted from existing environmental regulations (such as EPA loopholes for groundwater protection).

Beinecke also cautioned that, despite its perceived environmental benefits (lower greenhouse gas emissions), natural gas is still a fossil fuel, and that any effort by Congress to develop a national energy policy must include a path toward a clean, renewable energy future.

“We must get these protections right because we might not get a second chance,” she said.

Sen. Maria Cantwell (D-WA) said an energy policy must also address climate change, with policies that reflect the true price of carbon and the cost of disaster relief stemming from climate-related impacts.

The committee’s ranking Republican, Alaska Sen. Lisa Murkowski autioned against national regulations.

“We should be careful before adopting blanket rules … we have different geology around the country,” Murkowski said, moving on to address the potential regulation of the liquid natural gas industry, especially as it relates to exports.

With a proposed $65 billion LNG project pending in Alaska, Murkowski said she doesn’t want Congress to reinvent the wheel and urged her colleagues to understand the role of the market, as well as the geopolitical and trade benefits of exporting LNG.

On the other hand, DOW Chemical chairman and CEO Andrew Liveris warned against unfettered exports of LNG from the U.S.

“The fact is, if we shipped half or more overseas, it would severe unintended consequences across the economy, including higher gas and electricity prices … it could cause domestic manufacturers to ship factories overseas,” Liveris said, adding that it could amount to shipping away a huge economic advantage.

Developing the resource domestically by using natural gas as the base material for more advance products adds value to the economy by a factor of eight, he said.

“Liquid natural gas should not be shipped overseas to be burned in Japanese cooking ovens. Keep it at home, use it for manufacturing and you get 8 times the value,” he concluded.


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