Top White House Nat’l Security Advisor Touts Clear Benefits of American Natural Gas

At the launch today of Columbia University’s Center on Global Energy Policy, a diverse group of thought-leaders and policy experts discussed the key and growing role that clean-burning natural gas will continue to play here at home and globally. The speakers included Pulitzer-Prize winning author Daniel Yergin, New York City Mayor Michael Bloomberg, White House National Security Advisor Tom Donilon, ConocoPhillips Chairman and CEO Ryan Lance, acting U.S. Energy Secretary Daniel Poneman, as well as others.

To be sure, natural gas was a foundational topic throughout the event, with Mayor Bloomberg underscoring the importance of science – not politics – informing policy decisions surrounding hydraulic fracturing.

And for those who missed today’s event, here are key excerpts from Mr. Donilon’s remarks (available in full here):

When President Obama took office, the energy picture looked decidedly different than it does today. Indeed, forecasters said that the U.S. would need to double its imports of liquefied natural gas (LNG) over the next five years. There was renewed talk of “peak oil.” Nearly every prediction about our energy future made five years ago has been turned on its head. U.S. innovation and technology are allowing us to tap unconventional energy resources.

To understand just how significantly and quickly the landscape has shifted, consider a few statistics:

  • Today the United States is the top natural gas producer in the world. Our natural gas production has grown by one-third since 2005, driven by the increase in shale gas, which now accounts for forty percent of our natural gas output.
  • The domestic price of natural gas has dropped from over $13 per million Btu in 2008 to around $4 today. Natural gas imports are down almost sixty percent since 2005, and we are exporting more natural gas by pipeline to Mexico and Canada.

We are just beginning to understand and appreciate the geostrategic impacts of these changes to the U.S. and global energy landscape, but let me set out a few that I see:

The new U.S. energy posture and outlook will directly strengthen the nation’s economy. There are not a lot of iron laws of history. But one is that, as the President has said, a country’s political and military primacy depends on its economic vitality. Our strength at home is critical to our strength in the world, and our energy boom has proven to be an important driver for our economic recovery—boosting jobs, economic activity, and government revenues. … IHS CERA estimates that shale gas supported direct and indirect employment for 600,000 Americans in 2010, a number that could double by 2020.

America’s natural gas boom is helping to spark a domestic manufacturing revival. Manufacturers in energy-intensive sectors have announced up to $95 billion investments across the U.S. to take advantage of low-cost natural gas. The largest investments announced have been in the chemicals sector which uses natural gas as a feedstock, but there have also been major announcements in other industries like steel, plastics, and glass. … The reduction in energy imports has a positive impact on our trade balance, helps lower domestic and global energy prices, and allows a greater share of the money Americans spend on energy to remain within the U.S. economy.

The development of a more global natural gas market benefits the U.S. and our allies. We have a strong interest in a world natural gas market that is well supplied, diverse, and efficiently priced. Increased U.S. and global natural gas production can enhance diversity of supply, help delink gas prices from expensive oil indexed contracts, weaken control by traditional dominant natural gas suppliers, and encourage fuel switching from oil and coal to natural gas.

A decade ago, market analysts forecast that the U.S. would need to import large volumes of natural gas by pipeline and LNG. Since then, domestic production has reached historic highs and domestic natural gas reserves have almost doubled. Gas supplies originally destined for the United States are being redirected to other countries.  

As it relates to the clear economic, environmental and national security benefits associated with safe, tightly-regulated American natural gas production, Mr. Donilon’s comments echo the findings of a recent study by the National Intelligence Council of the Office of the Director of National Intelligence.

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