E&E TV recently had a debate among several politicians and Washington-based energy policy wonks, about the wisdom of exporting liquified natural gas. I thought I was leather-skinned as to how dumb our elected Congressional representatives are. Perhaps it was because the voice of reason in the group came from an energy industry lobbyist, Bruce McKay of Dominion Energy; I usually don't feel I learn very much from that demographic. Nor do I feel that California Democrats, a little too smug in their safely liberal districts, lend much value-added to any serious debate, but I usually find them less offensive. Even in this group of modest intellectual endowment, however, the shocking ignorance of Representative John Garamendi stands out, and warranted a special coming-out from my cocoon to denounce his brand of energy nativism.
Here is Garamendi, during the debate, on whether we should export liquified natural gas:
Don't do it. Don't do it. Gas is a strategic asset that America has. It's one of the few things that we really have in abundance, at least at the moment, and our industries are depending upon that natural gas at a reasonable price. We start exporting, we're going to drive that price into the world market price, which is at least twice as high as the current domestic price.Later, Garamendi, repeating himself, says:
[T]he real key here is that we do have this extremely important strategic asset, one that does allow us to do things that we couldn't do before and if we open the strategic asset to the world market, it will clearly double.Why is Garamendi so passionate about not exporting energy? Oh, it has to do with locating a plant in his home district!
This is a strategic asset. It allows us, for example Dow Chemical, to come back to America to rebuild its chemical plants and to expand its employment base in America. [T]hat the natural gas industry would want to drive Dow Chemical, one of the great American industries, out of the United States simply to fatten their bottom line. That is not acceptable. Dow Chemical, in fact, is increasing, in my own district, its production, its employment and rebuilding a plant that's been there for years and years. They were going to go offshore, but with the price of natural gas they're coming back and my people are working. My people are working.Let me be clear: I generally don't care for the energy industry. And the roughshod manner in which hydraulic fracturing is spreading across the land like a wildfire ought to give everyone pause. But if we can do a better and cleaner job of extracting natural gas, then it is crazy to deny that the world trades, and to forbid exports. When John Garamendi sees fracking, he does not see energy independence, he does not see relief from fiscal problems at the federal and state level (you would think a Californian didn't need to be reminded of this, but in Garamendi-World, this is apparently irrelevant), and Garamendi also does not see the manifold environmental problems currently associated with fracking (I am careful not to say they are proven, but let's be serious, they are almost certainly responsible for contaminated groundwater). Garamendi sees a Dow Chemical plant enjoying Soviet-style and Chinese style taxpayer-funded subsidies so that people in his district can work. Only against such heroically anachronistic thinking could Texas Republicans and energy lobbyists sound and look reasonable. Here is Dominion's Bruce McKay, from that same debate:
[R]ight now gas is about two and half dollars and that may be enjoyable for good consumers at the moment, but I think most sophisticated industry observers and consumers know that that's not sustainable. We have seen, just in recent weeks, a number of big producers pulling back, laying down their rigs and saying they can't justify it. So, there will be some rationality brought to supply and demand, but $2.50 seems below what is sustainable.If the Garamendi knaves have their way, we will have low energy prices in the US, and for a while a competitive advantage for energy-hogging industries like Dow. It could take that kind of industry 10 or 15 years to hollow out, for Garamendi's district to start looking like Youngstown, Ohio, but it will happen. Trying to protect your home district from foreign competition in an increasingly global world is a recipe for disaster. Garamendi wants to be governor of California some day. You all need to remember this when he runs.