Stopping LNG Exports Key to Preventing the Spread of Fracking

April 15, 2013

For people concerned about the harmful effects of fracking in the U.S., they should do whatever they can to prevent natural gas companies from exporting liquefied natural gas (LNG). Deborah Rogers—a shale gas industry expert, former investment banker and founder of Energy Policy Forum—underscores the importance of anti-export campaigns. She contends that stopping LNG exports is the most important step citizens can take to prevent shale gas companies from creating even larger industrial fracking zones in their communities.

Shale Gas and Oil Production Figures (Drill, Baby, Drill)

Here’s the nightmare scenario: LNG exporters, together with their gas-producing partners in the shale gas fields, are forced to take all of the necessary steps to ensure they don’t default on the terms of the contracts they signed with foreign countries and companies. In this scenario, shale gas drillers, already super-busy across the country, will significantly boost their fracking operations to satisfy both domestic and foreign demand, Rogers explained in a recent speech at the Stop the Frack Attack National Summit in Dallas, Texas last month.

Fracking is already disrupting communities and destroying ecosystems. Imagine the scope of environmental damage inflicted by the industry once gas-producing companies are required to fill supply orders from both domestic end-users and overseas buyers seeking to quench their growing thirst for natural gas.

In Pennsylvania and Ohio, for example, well pads, fracking operations and pipelines will begin to cover even larger portions of the states, both of which sit above prominent shale gas formations. Reluctant politicians in New York may eventually cave into industry pressure and open their state to fracking. Domestic natural gas prices are guaranteed to rise due to LNG exports creating a tighter supply-and-demand balance. When this happens, shale gas companies will likely become even more aggressive in their attempt to gain access to New York, given the incredibly huge profits at stake.

If all of the LNG export terminal developers get federal approval to send natural gas overseas and then get the financing to begin construction, it could result in a 45 percent to 50 percent increase in fracking, Deb Nardone, director of the Sierra Club’s Beyond Natural Gas campaign, said at the Dallas summit.

“I live in central Pennsylvania. It’s proposed to have 8,000 wells in the next handful of years that are fracked wells,” Nardone said. “That would mean 12,000 potential wells. My backyard is already devastated. I could only imagine what a 50 percent increase in fracking would mean for Pennsylvania.”

Even before Rogers made her pronouncement in Dallas, environmental groups such as Nardone’s were targeting LNG exports. Rogers’ call to arms amplified the notion that exporting huge volumes of LNG from multiple terminals in the U.S. would create a much greater fracking disaster.

That’s why the Sierra Club and other environmental groups are pushing the U.S. Department of Energy (DOE) and the Federal Energy Regulatory Commission (FERC) to conduct comprehensive studies of fracking’s environmental impacts, given the relationship between LNG exports and increases in shale gas drilling. Almost every industry observer—not just environmental activists—acknowledges that LNG exports will induce significantly greater levels of fracking.

“LNG exports, even if just a handful of these terminals get authorized, we’re looking at a significant amount of fracking that’s going to be necessary to meet both foreign and domestic demand,” Nardone said in an interview with EcoWatch.

In recent weeks, anti-fracking activists have directed their attention to President Obama’s nomination of MIT professor Ernest Moniz as U.S. Secretary of Energy. Moniz, if confirmed, is expected to green-light requests by companies that want to export domestically produced natural gas. Groups such as the Sierra Club and Food & Water Watch are using Moniz’s nomination to raise awareness about the connection between LNG exports and wide-scale fracking.

Along with fighting Moniz’s nomination, a coalition of environmental groups, including the Sierra Club, on April 8 petitioned the DOE to revise the Natural Gas Act and create a new policy to dictate how the agency reviews and processes applications to export LNG. The members of the environmental coalition want DOE to ensure that any updated policy guidelines are fully informed by “transparent and thorough economic and environmental assessment.”

The environmental groups are targeting DOE because they believe there is some wiggle room for the department to make decisions on LNG export authorization requests that address the public’s interest, not the industry’s interest. The National Environmental Policy Act “requires the Department of Energy to conduct an environmental assessment,” Nardone explained. “Legally we’re going to hold them accountable to it.”

FERC, as an independent regulatory agency, is less likely to respond to pressure from citizen groups. FERC’s commissioners and its staff are entrenched in the belief that the economic and financial benefits that come with the construction of natural gas infrastructure outweigh the environmental harm caused by the gas industry.

FERC has regularly rejected assertions by the Sierra Club and other groups that LNG export projects would induce the production of additional natural gas resources found in shale formations. The commission also has not agreed with assertions that the National Environmental Policy Act requires it to conduct an analysis of the cumulative environmental impacts of building liquefaction facilities at an LNG export terminal.

For the most part, whatever the natural gas industry wants, FERC gives it. If the industry wants to build natural gas pipelines that will require the cutting down of acres of forestland, FERC will promptly give its seal of approval. If the industry wants to build a compressor station in the middle of a community that opposes it, FERC will almost always side with the natural gas pipeline company.

This close partnership is proving beneficial to the natural gas industry as it seeks to transform its LNG import terminals into export terminals. Among the LNG export facilities approved by FERC, the Sabine Pass liquefaction project in Cameron Parish, Louisiana, is furthest along in its development. Along with FERC approval, Sabine Pass also has received authorizations from DOE to export LNG by vessel to both free-trade-agreement countries and non-free trade agreement countries. The liquefaction project will transform the Sabine Pass terminal into the world’s first bi-directional facility capable of exporting natural gas in addition to regasifying imported LNG.

Citizen groups and environmental organizations have pushed FERC to consider the relationship between LNG export terminals and shale gas drilling. In a report released in late 2012, the Sierra Club wrote that “incredibly” neither the DOE nor FERC has completed a full assessment of the environmental risks associated with LNG exports and the expanded gas production needed to support it.

“FERC, which focuses largely on terminal siting, refused to consider any of the upstream consequences of Sabine Pass’s plan to export 2.2 billion cubic feet of gas every day,” the Sierra Club said in the report, Look Before the LNG Leap: Why Policymakers and the Public Need Fair Disclosure Before Exports of Fracked Gas Start. “It did so even though Sabine Pass’s export application trumpets that the project intends to ‘play an influential role in contributing to the growth of natural gas production in the U.S.’”

Anti-fracking activists are tackling the LNG export issue from all angles, whether it’s applying pressure on DOE or FERC, urging state lawmakers and politicians to enact moratoriums and bans on fracking, or using nonviolent civil disobedience to block fracking operations. “There are significant ways that we can be holding our federal government accountable,” said Nardone.

Tags: Dave Hughes, drill baby drill, Fracking, LNG exports, policy, Sierra Club