The natural gas revolution is being televised, and what a glorious sight it is to witness. The global market is awash in this commodity right now, led by America’s ascent to energy king status. With the United States accounting for a bulk of market share, does this mean output has peaked? Hardly. In fact, the nation’s oil and gas companies are just getting started, and, thanks to a new pair of executive orders (EOs), production levels could soar to new heights in the next couple of years.
Trumpifying Natural Gas
Recently, President Donald Trump signed two executive orders that deregulate the natural gas industry. The EOs are meant to eliminate barriers to new and existing pipeline building across the country. By doing this, the nation can increase and enhance its energy infrastructure, remove roadblocks to current and future plans for transportation, and improve cross-country construction and commerce.
The first EO limits environmental reviews of energy projects and orders the Department of Energy and the Environmental Protection Agency to simplify a section of the Clean Water Act (CWA) that clarifies state authority over water quality permits. The second EO eases restrictions for interstate shipments and classifies liquefied natural gas (LNG) as other cryogenic liquids, allowing it to be transported via railroads.
According to President Trump, who was surrounded by engineers in Texas at the signing, the days of spending many years to receive a single permit “are gone”:
“In a few moments, I will sign two groundbreaking executive orders to continue the revival of the American energy industry, and will cut through destructive permitting delays and denials. Where it will take you 20 years to get a permit, those days are gone. We made a lot of progress in the last two and a half years, haven’t we? We took down a lot of barriers to production and the pumping.
“With the help of the incredible workers in this room, the United States is now the number one producer of oil and natural gas, anywhere in the world, anywhere on the planet.”
In the wake of the signing, senior administration officials defended the orders, averring that it will “provide a good, consistent, reliable path forward” between the public and private sectors.
[perfectpullquote align=”right” bordertop=”false” cite=”” link=”” color=”” class=”” size=”20″]Perhaps that should be the Democrats’ 2020 slogan: “Federalism: Only When It’s Convenient.”[/perfectpullquote]They also argued that the safety standards established four decades ago have very little impact on larger facilities today, mainly because of how advanced and environmentally friendly they already are.
The Interstate Natural Gas Association of America welcomed the move, noting that this reduces “procedural inefficiencies that can delay a process that already spans several years.”
States Get Trumped
Not everyone is pleased, including a handful of governors, environmental organizations, and legal experts.
The White House’s actions will have the greatest impact on the Constitution Pipeline, a 124-mile project that extends from Pennsylvania to New York. Despite being granted a federal permit in 2014, both states have suspended several key permits, alleging that firms have failed to abide by local laws and regulations, particularly those in the CWA.
Gov. Jay Inslee (D-WA) vowed to fight any federal intrusion into states’ rights to protect their water:
“No amount of politicking will change the facts — states have full authority under the Clean Water Act to protect our waters and ensure the health and safety of our people. Washington will not allow this or any presidential administration to block us from discharging that authority lawfully and effectively.”
Gov. Andrew Cuomo (D-NY) echoed his colleague’s sentiment, describing Trump’s executive action as “a gross overreach of federal authority.”
Now the Democrats care about states’ rights and federal overreach? Where were they during the reign of President Barack Obama? Perhaps that should be the Democrats’ 2020 slogan: “Federalism: Only When It’s Convenient.”
The Rise of Saudi America
A decade ago, the U.S. natural gas industry had very little influence on the world stage. That all changed with the shale revolution that has been brought to you by hydraulic fracturing, or fracking. The United States has turned into Saudi America, an energy-independent nation that no longer caves to the whims of OPEC.
Hydraulic Fracturing
And America is just getting started.
According to the Environmental Information Administration’s short-term energy outlook for 2020, average daily production will top 92 billion cubic feet (bcf), inventories will be 30% below the five-year average, and exports will soar to 7.5 bcf.
Domestic output has soared 60% in the last 12 years, demand from a whole host of sources is growing, and there will be an estimated 36 gigawatts of new capacity this year. The sector still has plenty of room to expand as explorers keep coming across new reserves, and additional foreign players are entering the market – Saudi Arabia plans to spend $10 billion on exploration and development.
Is it any wonder why the United States is now a net energy exporter?
Everybody Happy
In theory, everybody should be happy with the dramatic rise of natural gas in such a short period of time. Coal is being phased out, emissions are coming down, households have access to a cheap energy source, employment is projected to grow another 5%, and there will be billions in economic activity. It’s a win-win scenario, even for renewable energy because when wind and solar hiccup natural gas plants will spring into action and supply the energy, which masks their inefficiency. It’s here to stay – until another cheap energy source is discovered by the entrepreneurs of America.
