Biden's Gas Pains for America

A few days ago the U.S. domestic price of natural gas (known as the Henry Hub spot price) fell to a 25-year low of $1.68 per million BTU (MMBtu). It was only 20 years ago that domestic natural gas was routinely over $6/MMBtu year-after year, with prices sometimes reaching over $14.

Back in the mid-2000s the long-term government forecasts concluded that the U.S. was going to become dependent for as much as 20 percent of its natural gas needs by the year 2020, and thus the U.S. needed to start building liquid natural gas (LNG) import terminals so we could expand our imports—from guess who? Qatar was offering long-term supply of natural gas for $2 or less, and several American petrochemical companies dependent on gas for their product line planned major expansions in Qatar to take advantage of the abundant low-cost supply.

But then as funny thing happened: the directional drilling and fracking revolution occurred, which revolutionized domestic gas (and oil) production, and drove prices down consistently below $3 by 2015. The fracking revolution was a long time in development, but no one in Washington knew about it, or they would surely have done something to stop it cold. By the time the political class discovered what was happening in our domestic gas fields, it was too late prevent the gas revolution from becoming a fait accompli.

Suddenly the planned LNG import terminals were re-purposed to be export terminals for the bounty of American natural gas, and major chemical companies like Dow cancelled their expansion plans for Qatar.

Something's in the wind.

The political class in Washington, whipped by the climate cult inside the Democratic Party, is doing its best to get even for this fortuitous turnabout in our energy fortunes. The Environmental Protection Agency is pushing through onerous new regulations of methane emissions from gas wells that are intended to make gas drilling unprofitable in many cases. And as mentioned here previously, the latest big step is the move to stop the expansion of natural gas exports by strangling new LNG export terminals. This is one reason for the very low price of gas right now—the future of a promising export market is in serious doubt. (While gas in the U.S. is now under $2, gas in Europe and Asia ranges right now from $8 - 10.)

Now it emerges that Biden took this step after heavy lobbying from the Rockefeller family and other billionaire environmentalists. The Wall Street Journal reported that “Charities controlled by members of the Rockefeller family and billionaire donors were key funders of a successful campaign to pressure President Biden to pause new approvals of liquefied natural gas exports from the U.S.”

Beyond the policy stupidity this decision represents is what it tells us about Joe Biden and the Democratic Party. Biden’s political skill throughout his career has been to find the center of Democratic Party opinion and move with it. Thus he went from being a moderate civil rights skeptic and abortion opponent in the 1970s (along with Al Gore, Richard Gephardt, and many other leading Democrats of the time) to a progressive race-baiter and pro-abortion fanatic in recent years.

That Biden now bends to the will of wealthy environmentalists ratifies what everyone suspects about who has the most clout in the Democratic Party today. The irony is that once upon a time progressives were repelled by anything connected to the Rockefeller family. Maybe they still should be.