Why Gas Exports Won't Be the New Keystone
The fight has plenty in common with the pipeline brawl. But there's one crucial difference.
Are gas exports really the next Keystone?
Media outlets from The Wall Street Journal to The Nation have been making the comparison of late, and it's not hard to see why.
Over the past few weeks, the crisis in Crimea has escalated the argument over exporting liquefied natural gas, putting pressure on the administration to pursue a policy that backers say could ease Europe's reliance on Russian fuel. Green groups — including prominent anti-Keystone forces such as Bill Mc- Kibben's 350.org and Michael Brune's Sierra Club — have been pushing back hard.
But how do the two battles really stack up? There are similarities, to be sure, but if taking on Keystone is like fighting a 500-pound gorilla, the gas-export clash is more like playing Whac-A-Mole.
The parallels are obvious. Both fights center on politically charged Obama administration decisions related to fossil fuels. Both involve domestic-energy policies that can't be untethered from diplomacy. With the proposed Keystone pipeline to bring crude oil from Alberta's tar sands to Gulf Coast refineries, at issue are relations with Canada, which is spending all kinds of diplomatic capital to get President Obama to yes. With gas exports, Russia's annexation of Crimea has prompted growing interest in whether the fracking-enabled U.S. gas boom can be eventually transformed into exports that help wean Europe off Russian energy — an idea at the center of three hearings on Capitol Hill over the past week.
And both involve a complicated, heated dispute over how to measure the greenhouse-gas footprint of big energy projects. With Keystone, activists' arguments that the project is a disaster for the climate turn on whether the pipeline would be a catalyst for expansion of carbon-heavy oil-sands projects in Alberta. A recent State Department analysis basically said the stuff will get developed one way or the other, making Keystone quite unlikely to create a spike in emissions. With gas exports, environmentalists are pressing Obama administration regulators to look beyond the huge carbon advantage gas holds over coal when burned as a power source. They argue that leaks of methane (a potent climate-cooker) from gas wells and distribution, the carbon footprint of the energy it takes to supercool the gas for liquefaction, the shipping itself, and the burning of the fuel abroad all add up to an emissions profile just as bad as coal's.
But despite all that, there's one critical difference between the two debates.
Keystone is an all-or-nothing battle that will, eventually, come to a head: Either the project will be permitted or it won't. After all the lobbying from both sides, the White House will have to make a single, highly charged choice.
Gas exports, in comparison, are a multifront battle, and that presents a challenge for green groups. "You don't have ... a single decider. It doesn't end up on the president's desk," said Ross Hammond of Friends of the Earth. "It is, for sure, more challenging to oppose these without having that sort of binary, yes-or-no decision."
In short, on Keystone, it'll be yea or nay. On gas exports, the Obama administration is wading through roughly two dozen individual export proposals stacked up at the Energy Department — a process that provides the president with a bureaucratic buffer.
The administration has thus far responded to the rhetoric on both sides with restraint. It notes that approving the current export applications would have little impact on the immediate crisis in Eastern Europe, since in most cases ships would not set sail for years. But it has also been increasingly supportive of the idea that U.S. resources are a strategic lever, and that U.S. gas is one tool available for aiding Europe.
In comments to Bloomberg, Energy Secretary Ernest Moniz said the department might give "additional weight" to geopolitical factors when considering export projects. A senior administration official told reporters traveling with Vice President Joe Biden in Eastern Europe last week, "The United States is obviously reviewing and considering what we can and should do domestically to serve both our interests and the interests of our European partners."
And in Brussels this past Wednesday, the president himself sent an additional sign to supporters of exports, noting that the proposed U.S.-E.U. Transatlantic Trade and Investment Partnership would make it easier to send U.S. gas to Europe.
"Once we have a trade agreement in place, export licences for projects for liquefied natural gas destined to Europe would be much easier, something that is obviously relevant in today's geopolitical environment," Obama said after meeting with E.U. leaders, Reuters reported.
Most important, the administration has already begun to take action on the issue — without casting its decisions on exports in policy terms. Over the past year, the Energy Department approved a string of applications to export gas to nations that lack formal free-trade deals with the United States. The latest came Monday, when the Energy Department offered Veresen conditional approval of the Jordan Cove gas project in Oregon, which the company hopes can begin sending gas to Asian and South American markets in five years.
All told, one gas-export project has won full federal approval; six others, including Jordan Cove, are partway there but still have various administrative hurdles to overcome.
The Obama administration, in other words, is making policy one step at a time.
"The president has just a great solution. The solution is, we approve the permits one facility at a time and then we are not having a massive policy shift," said Amy Myers Jaffe, a pro-export energy expert with the University of California (Davis). "They don't have to say anything," she said. "Just take the action."