Natural-Gas Exports Dominate Moniz Confirmation Hearing

Amy Harder

Tuesday’s confirmation hearing for President Obama’s nominee to be Energy secretary, Ernest Moniz, was dominated by the energy industry’s topic du jour: natural-gas exports.

Moniz tried hard to respond to questions on the issue from members of the Senate Energy and Natural Resources Committee without directly answering them, but his responses indicated that he would be more likely to support, rather than oppose, increased exports of natural gas.

“There are many factors,” Moniz said in response to a question from Sen. Debbie Stabenow, D-Mich., about how increased gas exports could affect the manufacturing sector, which uses gas as a feedstock and is benefiting from low prices. “For example, we really need an understanding and observing of what happens with elasticity of production when and if there are exports. Are we producing more gas? Are we producing more wet gas, which provides more for the manufacturing industry?”

With those comments, Moniz implicitly conveyed one of the main arguments put forth by proponents of natural-gas exports: If the government does not allow more exports, companies will not have the economic justification to drill for the gas at all.

The position that Moniz, a physicist who heads the MIT Energy Initiative, takes on this issue is critical. The Natural Gas Act of 1938 gives jurisdiction of natural-gas exports to the Energy Department, which places additional regulatory hurdles for companies seeking to export gas to countries that do not have free-trade agreements with the U.S. Right now, more than a dozen applications are pending before the agency, and committees on both sides of the Capitol are scrambling to address the flood of export requests.

In addition to Stabenow’s questioning, Moniz faced queries on this topic from panel Chairman Ron Wyden, D-Ore.; ranking member Lisa Murkowski, R-Alaska; and Sen. John Barrasso, R-Wyo. While Sen. Rob Portman, R-Ohio, didn’t ask about it, he did stress the importance of low natural-gas prices to his state’s manufacturing renaissance.

A 2010 report issued by MIT’s Energy Initiative while led by Moniz indicates he is a strong supporter of natural-gas exports. The MIT researchers, led by Moniz, go so far as to support a global natural-gas market, akin to the global oil market. Right now, natural gas is set at regional prices.

“The U.S. should sustain North American energy-market integration and support development of a global ‘liquid’ natural-gas market with diversity of supply,” the paper states. “A corollary is that the U.S. should not erect barriers to natural-gas imports or exports.”

These comments prompted the conservative Heritage Foundation, led by former Sen. Jim DeMint, R-S.C., to offer rare praise for Moniz. “Dr. Moniz’s perspective on an accessible natural-gas market bodes well for the future of natural-gas exports,” wrote Heritage experts Nicholas Loris, Jack Spencer, and Katie Tubb in an April 8 blog post.