America’s energy renaissance is being stifled by poor pipeline capacity, but President Trump’s trillion-dollar infrastructure plan can remove pipeline bottlenecks and grow our nation’s energy production. The key is making sure policymakers are aware of the challenges and opportunities regarding our present pipeline situation.
In 2016 natural gas overtook coal to become the leading source of American electricity generation. The economics of lower natural gas prices were the primary reason for the ascendancy of natural gas power, spurred largely by technological advances in fracking and directional drilling. Prices by region vary, however, due largely to pipeline bottlenecks.
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People in the Northeast, while generally benefiting from low-price, low-emission natural gas, often feel painful price spikes during winter cold snaps. Natural gas is not as easily stored as coal. With a shortage of natural gas pipelines, natural gas prices can jump dramatically during severe winter cold snaps that cause a spike in electricity and home heating demand.
Forbes.com contributor Jude Clemente documented earlier this week how the Federal Energy Regulatory Commission (FERC) recently approved nearly 40 major pipeline projects. Now policymakers need to ensure that the pipelines are built.
Budget hawks may question the wisdom of a trillion dollars in new infrastructure spending, but if Congress approves such spending, policymakers should ensure the money goes to productive use. New natural gas pipelines easily qualify.
Policymakers also must eliminate anti-science environmental opposition. New York policymakers, for example, are blocking the construction of a much-needed pipeline that would deliver low-cost natural gas from Pennsylvania. Environmental activists assert debunked environmental claims to justify blocking the pipelines, while simultaneously ignoring the obvious environmental advantages of low-emission natural gas. Such opposition harms our economy and the environment.
New pipelines would not only alleviate northeastern U.S. price spikes during winter cold spells, but they would also give American energy producers greater access to foreign markets. American energy producers can produce and sell natural gas at half the price of the world’s leading exporter – Russia – yet limited pipeline and export terminal capacity prevents American energy producers from delivering gas to overseas markets. Eliminating these bottlenecks will bring more foreign money into the United States, supplementing the economic advantages of more pipelines lowering domestic natural gas prices.