US Seeing Gains in Gas Market, Experts Tell Senate

Dennis Arriola, executive vice president of Sempra Energy, testifies Thursday before the Senate.

WASHINGTON (CN) — Senator Lisa Murkowski of Alaska said Thursday that the U.S. faces a narrow window to becoming a global leader in the natural gas market.

The U.S. was a net exporter of gas for the third year running in 2019, shipping to 36 countries, mostly in Europe and in Asia next. 

Steven Winberg with the Department of Energy testified this morning before the Senate Committee on Energy and Natural Resources that natural-gas production has transformed the nation, creating countless American jobs and reducing carbon emissions. 

“Natural gas has proven to be and will continue to be a vital part of the Trump administration’s commitment to an all-of-the-above approach to energy,” said Winberg, who serves as the assistant secretary for fossil energy.

Winberg was joined on today’s witness panel by Dennis Arriola, executive vice president of Sempra Energy, who said his company has a multibillion-dollar plan to ramp up production.

Though it takes 21 days on average today for a U.S. natural gas tanker to reach Asia from the Gulf of Mexico through the Panama Canal, Sempra aims to cut that travel time to 12 days or less by opening two new facilities in Mexico. 

Natural gas could be a “game changer” for the U.S. trade deficit, Arriola said, highlighting that 10 countries in Asia hold 80% of U.S. debt — and they all need cleaner fuel.

“It is a comparably low cost,” Arriola said. “And it emits 50% of the carbon dioxide of coal, and it also compliments the growth of renewable resources like wind and solar.”

While receptive to the forecast of economic growth, the committee recognized that China may soon increase domestic natural gas production and undercut the demand for U.S. supply.

“They may do exactly what we did in this past decade in terms of our ability to ramp up,” Murkowski said. 

Melanie Hart from the Center for American Progress said the U.S. Energy Information Administration has already estimated that China may have more natural gas reserves than the U.S.

She warned that China does not plan on being energy dependent, though currently exports little of its own reserves.

“Beijing is determined to turn that around and to follow the U.S. example,” Hart said. “We should not underestimate the probability that that determination will become reality given the amount of money that they are willing to invest in doing so.”

Senator Joe Manchin, the committee’s Democratic ranking member, said China has offered to invest $83 billion to develop natural gas production in his home state of West Virginia but failed to provide details on the deal.

Hart called such lack of information sharing typical of Chinese investment offers. She called on Congress to help the American people to understand the risk of dealmaking with China and Russia.

Talks between Alaska and three Chinese firms are already underway to bankroll pipelines in exchange for 75% access to Alaskan natural gas. A third deal backed by Chinese and Russian investors is underway in Texas.

“These are state-owned enterprises,” Hart said. “We see how the Chinese Communist Party is leveraging American business … in a bid to bring the U.S. to heel.”

Murkowski, who earlier in the hearing noted her state can ship natural gas to Asian markets in as little as a week, said Hart raised legitimate concerns.

“Alaskans are clearly eyes wide open as they have looked to how they can move their natural gas,” Murkowski said. “We certainly don’t want the Chinese to have control.”

Senator Angus King from Maine said he did not believe the soaring natural gas market would not hit U.S. consumers with higher prices.

“I think we are making a historic, historic mistake unless we put some controls, some limit based upon science and data, on this trend of what appears to me to be unlimited export of natural gas,” King said. 

But Republicans on the committee emphasized the economic gains to continued increased production.

Senator Gardner of Colorado took his time for questioning to voice frustration with neighboring states like California.

“You have production jobs and economic opportunity that you can develop in states like Colorado, Wyoming, Utah that is basically being held up by anti-energy regulations on the West Coast,” Gardner said. 

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