This week, AGA President and CEO Dave McCurdy participated in the National Journal’s Energy Insiders blog to respond to their question, “Is the (Energy) Price Right?” His response is posted below and you can also visit the National Journal Energy Insiders blog to view the entire comments thread.
“Energy solutions for the 21st century must address how we can balance our economic health with environmental needs. Yet today we seem stuck between ideological extremes. On the far left there are those who clamor for a narrow, high-cost energy solution, while the extreme right denies climate science and does not address the real challenges we face.
The answer lies in pursuing a clean energy strategy where government leans on market-based solutions allowing the consumer to choose. Today we face an extraordinary opportunity that lets us deliver solutions for our economy and our environment without compromising on either. Due to the homegrown technology that has unlocked our shale resources, we now have a domestic abundance of natural gas that is helping drive economic growth while improving the environment. While Europe has tried the high energy cost strategy by using price to affect behavior and government mandates to choose winners and losers, we don’t need to do either to achieve beneficial energy and environmental outcomes. We can have affordable energy prices while reducing emissions – and this is already happening through market forces alone due to our abundant supply of clean natural gas.
I recently returned from a global conference in China where it was overwhelmingly clear how my international counterparts in the energy industry and policy sphere view the current American energy bounty. The Chinese envy our circumstances – an abundant supply of clean, affordable natural gas would make great strides in reducing the deadly smog that is clogging China’s cities and countryside. They see the shale revolution in the United States as an international game-changer and envy the competitive advantage it provides our nation. We are standing on top of an opportunity that has profound implications for our energy future, and we must make sure we take the right steps to maintain this competitive edge.
Natural gas is the bright spot in our economy today. Along with saving Americans money on their energy bills, the industry is creating jobs and the low price of natural gas is boosting American manufacturing and business. Customers who heated their homes with natural gas during the 2011-2012 winter heating season saw average savings of 70 percent compared to those using heating oil and 32 percent compared to those using electricity, according to the U.S. Energy Information Administration. With the U.S. economy still struggling, we must try to avoid action that would place unnecessary stress on the middle class and we must be smart about government policies that attempt to drive up prices or subsidize favored projects. Thirty years in public policy have taught me that solutions and outcomes always come back to price. The most successful policies allow the market to choose.
The economic factors that encourage greater use of natural gas indirectly create positive outcomes for our environment. The U.S. Environmental Protection Agency recently released data showing that carbon emissions in the United States are continuing their downward trend, falling 3.8 percent between 2011 and 2012, while per capita economic output increased by two percent – and they attributed this in large part from power plants switching from coal to natural gas.
This is because natural gas is a clean and efficient energy source, and we are working every day to make it even cleaner and more efficient. Emissions from the natural gas value chain are low and getting lower, and AGA and its member companies are committed to gaining an accurate, data-driven picture of the emissions profile from natural gas distribution so that we can continue to make improvements. AGA collaborates with a range of stakeholders including the Environmental Defense Fund and the Center for Climate and Energy Solutions to determine how we can best secure a role for natural gas in a clean energy future.
We don’t have to look elsewhere. The United States leads the world in natural gas production. We have the infrastructure to support it too – our 2.4 million miles of natural gas pipelines are the envy of the world and the safest energy delivery system in the nation. Creating opportunities to better optimize our nation’s energy resources, supported by prudent regulation and policy making informed by science and facts, should be the goal of all stakeholders. We have room to grow demand for natural gas across all sectors while maintaining stable and relatively affordable prices. We need to seize this opportunity to invest in our energy future by expanding and upgrading our natural gas delivery infrastructure. Greater recognition of the benefits of natural gas in federal and state regulation, legislation, building energy codes, appliance standards and energy policy initiatives will open new doors to increased energy efficiency and energy security for our nation and its citizens.”