Banning natural gas exports

Does this even reduce emissions? Nobody seems to know or care.

The Biden administration announced last week that it would pause approval of 17 planned liquid natural gas export facilities, pending a review of the greenhouse gas emission implications of their construction.

Their plan, stated in this way, is pretty unobjectionable. Increasing LNG exports will generate modest economic benefits for the United States of America by increasing natural gas production and natural gas exports, which will mean some jobs in the gas extraction sector. The exports will also improve America’s terms of trade and make some imported goods cheaper. LNG exports will also presumably lower the global price of natural gas, which will increase the amount of gas that is burned globally. To the extent that cheaper gas displaces coal and oil, that will make global greenhouse gas emissions lower. But to the extent that it leads to more aggregate energy use, it could make climate change worse.

So there are a lot of important questions to ask about LNG exports and climate change:

• How much does blocking the terminal actually reduce global natural gas consumption rather than redirecting it from the US to Qatar or Russia?

• How much does increased gas consumption displace coal and oil? Or is it simply burned in addition to coal and oil?

• Based on the answers to the questions above, what is the net impact of these LNG terminals on greenhouse gas emissions?

• What is the economic value to the United States of increased natural gas exports?

• What is the economic value to the world of cheaper natural gas?

If you had answers to those questions, you could then do two different cost-benefit analyses. One is what is the social cost to the United States of America of the higher emissions (if any) versus the economic benefits? The other is what is the social cost to the world of the higher emissions (if any) versus the economic benefits?

One certainly can’t object, in principle, to the idea that the government should run these numbers and try to reach a decision.

That said, I think it is clear that the climate advocacy community is not asking for a sober-minded calculation. I’ll just quote Jillian Goodman’s writeup for Heatmap, which I think is extremely telling in two respects:

“Um, I think we all just won,” wrote Bill McKibben — perhaps the project’s staunchest foe — in a newsletter sent out just a few hours later. “Yes,” he wrote, “there are always devils in the details. And it doesn’t guarantee long-term victory — it sets up a process where victory is possible (to this point, the industry has gotten every permit they’ve asked for). But I have a beer in my hand.”

That possible breaking of historical precedent partially explains why McKibben is so exhilarated. Another reason has a lot to do with an analysis of the climate effects of U.S. LNG exports, released in November by energy analyst Jeremy Symons. Among his most incendiary findings was that, if all 17 export terminals were approved, the emissions related to the fuel that would flow through them would exceed the annual greenhouse gas emissions of the entire European Union.

Two points on this:

1. McKibben defines victory as blocking LNG exports. He knows in advance which way he wants the analysis to turn out.

2. The movement has reached its decision on which way it should turn out based on Symons’ analysis, even though Symons doesn’t even purport to estimate the net impact on emissions.

I think this is bad. And generally speaking, it’s a bad idea to spend a lot of time listening to the ideas and priorities of activities who are this cavalier about their policy analysis.

I also have to say that any time I write a piece like this one from earlier in the month about how I wish Democrats would get real about the politics of climate change, I get a ton of immediate pushback. The climate advocates tell me that everyone knows the voters don’t want to make big sacrifices for climate change, that’s why the whole climate agenda was reoriented around jobs, industrial policy, energy security, innovation, and so forth. And I think that’s great. The Inflation Reduction Act really was centered around those things (thanks to Joe Manchin).

But this kind of thing is the tell. The actual revealed preference of the climate movement is to take an arbitrary hammer to any fossil fuel project that they see, in such an arbitrary way that they want to do it before even knowing whether the project raises emissions. And when I say that this kind of thinking is a problem politically, that’s what I mean: A group of people who know that they should be trying to create politically sustainable decarbonization via jobs, growth, innovation, and energy just can’t restrain themselves from seizing on regulatory loopholes and prejudging the outcomes of complicated policy analysis.