A group of U.S. senators, including Sen. Richard Blumenthal of Connecticut, is targeting natural gas exports as a culprit behind rising prices and asked the Biden administration to halt the shipments.
The 10 lawmakers — from New England, Michigan and Minnesota where their constituents are enduring a cold winter — asked U.S. Energy Secretary Jennifer Granholm to consider stopping natural gas exports.
Liquefied natural gas exports are reducing the surplus for the U.S. market, the senators said. And projections of “exponentially increased U.S. exports will cause real harm” to American families struggling to pay their home heating bills, the lawmakers said.
The senators include Democrats Elizabeth Warren and Edward Markey of Massachusetts, Jack Reed and Sheldon Whitehouse of Rhode Island, Tina Smith of Minnesota, Debbie Stabenow and Gary Peters of Michigan, Patrick Leahy of Vermont and Independent Angus King of Maine.
Natural gas prices have jumped nearly 20% since 2020, according to the U.S. Department of Energy, crimping the budgets of U.S. consumers. Rising energy prices also are a key component of inflation that’s higher than at any time since 1982 and are an issue in this year’s House and Senate elections.
The senators know they are are wading into the crisis over Russia’s threats against Ukraine. Russian leader Vladimir Putin is using his nation’s gas supply as a weapon against European trading partners as he seeks to tamp down opposition to his military buildup on the border with Ukraine.
In their letter to Granholm they said they “understand there are geopolitical factors and global and regional markets to consider.”
“This includes recent calls for U.S. exporters to provide additional volumes of natural gas to Europe amid increased threats of a Russian supply disruption,” the senators said. “However, the administration must also consider the potential increase in cost to American families because of higher export volumes.”
Mark Green of the American Petroleum Institute posted on the industry group’s website Monday that the lawmakers should instead support increased natural gas production and construction of natural gas pipelines, processing stations, power plants and other parts of the energy infrastructure.
“The senators’ go-to solution is to go after U.S. exports of liquefied natural gas, especially troubling with the Russia-Ukraine situation and with energy supply challenges across Europe,” he said.
Liquefied natural gas has been a growing market since 2016, said Mike Doyle, a senior equity analyst at Edward Jones. Prices in the U.S. are high, but they have soared in Europe, partly due to threats by Putin, he said.
“You can sell it for a lot more in Europe than in the U.S. right now,” he said.
The U.S., once dependent on oil imports, is now the biggest exporter of natural gas.
Blumenthal said the U.S. should curtail its natural gas exports, but can still sell to trading partners such as Germany, which is dependent on gas imports from Russia.
His request for federal intervention is his second in recent months. He and others in November urged President Joe Biden to tap the strategic oil reserve to help push down gas prices that were then about $3.50 a gallon in Connecticut. Biden agreed, and prices declined, but then rose again on global oil markets for reasons not unlike those now affecting natural gas: a cold winter and the Russia-Ukraine crisis.
The average price at the pump is now $3.44, according to AAA.
“History shows that increasing the supply of commodities like gasoline and natural gas lowers prices,” Blumenthal said. “The laws of supply and demand do work in commodities markets. Not all the time.”
Intervention last year had an effect “and I think the same would be true with natural gas,” he said.
Stephen Singer can be reached at ssinger@courant.com.
