Chris HopkinsEvery U.S. president since Richard Nixon has espoused a policy to make America energy independent. Clearly, none has delivered, and realistically no government intervention could do so. Today, however, thanks to imagination, technology, and free enterprise, the United States stands upon the threshold of functional independence by the end of this decade. Want some good news? Check out the American oil and gas industry.
Last Friday, the Obama administration approved the second application in as many years for a natural gas export license. That’s right, exports. And many more projects remain in the pipeline (so to speak) awaiting evaluation of the implications for domestic consumers of gas, including chemical manufacturers and utilities.
Only a few years ago, natural gas supplies were limited, prices hovered around $12 per million BTUs, and U.S firms were building plants to import liquefied natural gas (LNG) for re-gasification and distribution to customers like utilities and power plants. Today, with abundant supplies and prices hovering near $4 per million BTUs, many of these facilities are awaiting approval to reverse the process. These first two permits in Sabine Pass, La., and Freeport, Tex., authorize the collection of domestic gas for liquefaction and export to customers in Japan, Korea, Spain and India.
The process involves cooling the gaseous fuel to minus 260 degrees Fahrenheit, condensing it into liquid form and substantially reducing the volume of a given energy content. The super-cooled liquid is then loaded aboard transport vessels that function essentially as giant Thermos bottles, making long-distance shipment of natural gas economically feasible. Meanwhile, the combination of horizontal well drilling and hydraulic fracturing has dramatically increased the known U.S. reserves of the fuel, creating a glut of supply and portending economic benefits to exporters, manufacturers, and utility customers here at home.
And the good news is not limited to natural gas. The same revolutionary technologies have increased the production of oil in the United States by nearly 50 percent in five years, leading to a 30 percent reduction in imports of crude from the rest of the world. And perhaps most astonishingly, America has gone from being the world’s largest importer of refined energy products (gasoline, aviation fuel, etc.) to the world’s largest exporter in a span of two years. Who could have predicted that?