A major opportunity lies before Pennsylvania to bolster American geopolitical strength, improve the global environment, and create enduring economic development at home — if reason and practicality reign over rhetoric and extremism in the dialogue about building a Philadelphia Liquefied Natural Gas (LNG) terminal.
Thanks to State Rep. Martina White, there is a deliberate and inclusive task force set up by law to study the feasibility of an LNG terminal and to explore how it can help Pennsylvania, the U.S., and our worldwide allies. The Philadelphia LNG Export Task Force is expected to produce a report by November laying out its findings.
Pennsylvania must be ready to act when it does. Without a doubt, activist opponents will surface, but it is important to understand several factors when assessing the Philly LNG opportunity.
The war in Ukraine fundamentally changed both the global LNG market and, more importantly, how President Biden’s administration views it as a policy and geopolitical tool. When Russia cut off gas to Europe, U.S. natural gas produced under the world’s most stringent and environmentally responsible regulations moved into Europe in a flotilla of tankers. America did not let her allies down. It did not take a government order, either — companies adapted to meet the new demand.
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This upended global demand and availability, leaving Asia — the single biggest growth demand market — short of what it needed. Our biggest ally there, Japan, is scrambling for more LNG and led an initiative at the Group of Seven meetings that gave LNG an important role as a future decarbonization pathway.
On the way to that decision made last month, the U.S. government made LNG a policy tool to help reduce costs and strengthen global energy security through energy dialogues with its biggest allies, the U.K. and Japan.
How do Philadelphia and Pennsylvania fit in this geopolitical strategic picture?
A Philadelphia export terminal would be the single fastest route to Europe from the U.S., shortening the trip time and the cost. Pennsylvania’s Marcellus Shale is the second-largest gas field in the U.S., and the state’s gas production is second only to Texas’s. And our environmental regulations are strong. An LNG terminal in Philadelphia will create good-paying, durable union jobs during construction and constant employment for decades. With a new build-facility, it can also be designed to serve the nascent but fast-growing hydrogen industry. And as shocking as it sounds, given there is no West Coast LNG export facility, the opportunity exists to export gas transported safely by pipeline from Rockies gas basins as well.
To those concerned that exports will increase domestic costs, it bears noting that gas prices in the last year — a year when the U.S. became the world’s largest LNG exporter — have fallen. A new study shows that even with increased LNG exports, domestic prices will remain low and could even drop lower, especially if adequate pipeline infrastructure is built to get gas to market. Again, that offers an opportunity to future-proof our gas industry by building with an eye toward clean hydrogen — also a Biden administration priority.
In short, the old model and tired old dialogue espoused against American energy has been superseded by events beyond our control.
We can control the future if we seize the opportunity in front of us and work via the inclusive, stakeholder-focused process the Philadelphia LNG Export Task Force is propelling.
Mike Butler is Executive Director — Mid-Atlantic for the Consumer Energy Alliance, the leading U.S. consumer advocate in support of affordable, reliable energy for working families, seniors, and businesses across the country.