Most Americans favour natural gas [LNG2023]
Natural gas has a bright future in the US and globally despite some efforts to hinder its production and phase out its use, says the president of the American Gas Association.
In an interview with NGW at the LNG 2023 conference, Karen Harbert said politicians are getting onside with voters who prefer the fuel as a means of cooling their homes on hot summer days and heating them during frigid winter conditions.
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“Twenty-five states have passed legislation prohibiting the banning of natural gas use,” she said. “So, that’s half of the country and more than half the through- put of natural gas. Policymakers, based on input from their constituents and voters, have spoken. There’s other states that are considering the same thing.”
In a recent AGA poll, natural gas received 76% approval rating, while only 5% were against it and 12% had no opinion, said Harbert.
She noted that a court struck down a proposed ban in California, and the deci- sion is reverberating across the country. And, in Eugene, Oregon, the city council has scrapped a planned November plebiscite on an ordinance to ban gas as a power source in new low-rise buildings. The move resulted due to concerns about the ban’s legal validity.
Harbert said politicians are starting to listen to people who want a choice when it comes to power sources. President Joe Biden could be more supportive of the natural gas sector but the industry is moving at the pace at which it believes it can deliver energy safely.
“I think back to different global pinch points in global tension and global crises,” she said. “American industry has always stepped up to the plate in one way or another. We had the Marshall Plan. We marshalled all the things we needed to do to actually expedite the production of weapons, when we needed to do that. This is another inflection point. This time, it’s the energy industry that has stepped up to prove that it can be a big part of calming global tensions, and doing good service to our allies. And, I think that is changing the conversation.”
The Biden administration realises that natural gas and LNG, in particular, are important components in responding to the crisis in Ukraine. As a result, the American government is prepared to do what is necessary to support natural gas and LNG production, she said.
“I don’t think you’re going to see the Biden administration come out with a full-throated embrace of natural gas,” said Harbert. “That is not what the president ran on. He ran on a very climate-focused agenda. Sure, but things change, right? He didn’t anticipate a
war in Ukraine. He didn’t anticipate a pandemic, where we came through for everybody in America to be able to stay at home and change the energy dynamic completely. We were no longer supplying energy to buildings downtown because [office workers] weren’t there. It was then 24/7 At home, and we figured that out.”
“So, I would like to see the industry get more credit, but that’s not what they’re looking for. They’re looking to stay in business and supply their customers.”
She said it is essential to have natural gas and LNG available to supplant coal plants, put countries outside of North America on a lower emissions trajectory and address energy poverty in those nations.
“Because if you don’t address energy, poverty, they’re going to continue to use the most affordable, dirtiest fuel possible, and we have to figure out how to address that,” she said. “Natural gas is the solution.”
When it comes to the pace of American Gas Association President Karen Harbert permitting, pipeline builders are more frustrated than LNG facility developers. In the next five to seven years, she said, the US, Canada and Mexico were set to add 80mn tonnes/year of LNG to the global market.
“I mean, [LNG] could be the best green solution to climate change, ever,” she said. “And No. 2, it’s going to do a lot for the competitiveness of the US – and it’s the right thing to do.”
International Energy Agency forecasts of a drastic decline in natural gas are not impeding investment, she said. Producers are showing capital discipline and investors are playing catch-up in wake of a COVID-19 pandemic-induced decline.
“We’re less in balance in terms of supply and demand than we would like, but we’re not out of balance – that’s important,” said Harbert. “The other side of the equation is, the LNG facilities are becoming more modern, and modularised, which means they’re going to be more efficient and cost-effective to produce and they’ll be able to [be built] faster. And that will draw demand, which will obviously draw production. So, it’s a cycle there.”
Harbert does not expect financing efforts to be impeded by energy company shareholders’ concerns about environmental and social governance. She said natural gas and LNG producers will seek to reduce emissions throughout the supply chain.
“There’s an economic incentive, there’s an environmental imperative and a customer expectation,” she said.
As a result, producers will be able to offer profitable investments to corporate finance committees under a favourable investment timeline between now and 2050.
“We’re going to be there and we’re going to be turning a profit – and we’re going to be growing,” said Harbert.
This feature was originally published in the LNG2023 Daily, produced by NGW during the LNG2023 conference in Vancouver July 10-13.