Rafael Anchia Files a Bill to Help Texas Export its Natural Gas

Categories: Legislature

Anchia.jpg
Rafael Anchia
State Representative Rafael Anchia of Dallas filed legislation Friday that he hopes will position Texas to lead the sustainable age. He describes it as a launching point for a dialogue in the Legislature, a "shell" of a bill that will eventually drive workforce development for the next generation of jobs in renewable energy, and promote foreign direct investment in our natural resources and energy-related small businesses. It's a refreshing and admirable aspiration in a state whose default policy often seems to be that fossil fuels are inexhaustible. But it's the bridge he's chosen to get us there that is bound to make odd bedfellows in the opposition.

A key component in HB 3853 is the export of natural gas -- a commodity we have plenty of, but one whose going price has shriveled since the shale boom glutted the market in 2008. Domestic demand hasn't been able to absorb the excess, but a liquefied natural gas export terminal, like the one the Department of Energy approved in Sabine Pass, Louisiana, could tap into energy-starved markets in Asia and Europe, buoying prices and, Anchia hopes, sluggish gas production activity in Texas.

"Chairman Anchia has taken a position that LNG (liquefied natural gas) exports are good for the economy," says Scott Flukinger, Anchia's legislative counsel and deputy director for the Committee on International Trade and Intergovernmental Affairs. "We have abundant natural gas. It's part of our tool box in our energy economy to make that fuel available to buyers abroad. There was a time when we thought we'd have to buy it from other people. We're in a good place now. His objective is to equip Texas to take advantage of that opportunity while it lasts."

It's a means to an end, Flukinger says, since the money for Anchia's vision would come from the oilfield clean-up fund.

But it's bound to meet stiff opposition, and not just from the usual suspects in the anti-fracking movement. The chemical industry, which uses natural gas as a feedstock, has opposed LNG exports.

For consumers, it may mean higher electric bills, because such a large swath of Texas power generators run on natural gas. In an analysis last year, the Energy Information Administration calculated exports could raise the price of natural gas at the wellhead by 57 percent over the next 20 years or so. This could translate, EIA predicts, into higher coal usage among power generators.

What's more, exports could result in a slight increase in natural gas imports. Flukinger says Anchia wants to be "responsive" to these concerns.

"We will be having hearings on both international energy markets and global climate in the upcoming weeks and will take testimony on important issues surrounding both renewable and conventional energy sources in Texas," Anchia says in an emailed statement. "At that point, we will determine next steps, if any, on this or related bills."


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8 comments
MikeWestEast
MikeWestEast

I do not see the logic in using state funds to create a market that will raise our prices.  At the same time, the government should not get in the way if a business wants to build something to access that demand.  People that work in government do not have the capability to make these investment decisions.  Stay away, use your funds on some other need, and let people that know these businesses run them  If someone claims to need funds to get something done, tell him to man up and shoo him away.

ThePosterFormerlyKnownasPaul
ThePosterFormerlyKnownasPaul topcommenter

The OFCU is a dedicated fund for cleaning up oil and gas wastes at orphan well sites.  The fund has a tremendous backlog of projects.

It is and will be a big mistake to use these funds for anything else other than clean up work.

scottindallas
scottindallas topcommenter

As usual, you are all wrong.  This is a bill to get access to the clean up fund.  Export of Natural Gas is not economical.  It's VERY expensive to chill or compress the NG to become LNG and then to ship it.  Further, those ships are expensive to run and maintain, so the farther they go, the less economical.   Natural gas can be effectively transported through pipelines, but LNG is a niche business.  Europe is not energy starved.  Russia is it's principle gas supplier, Algeria is number two.  Algeria does have a vast LNG export business, but that LNG just has to cross the Mediterranean.  Crossing the Atlantic, or as the story suggests, crossing through the Panama Canal, and across the Pacific isn't cost effective either.   

Since LNG export is not economical, you need to look at the other details.   This is the money quote, "It's a means to an end, Flukinger says, since the money for Anchia's vision would come from the oilfield clean-up fund."  I'm not ideologically opposed to Fracking as some here are.  You need to be careful, cause it's fucking up your reasoning.  The economic benefits of Fracking have been a boon for the economy, that can't be disputed.  I do have concerns about the sustainability, and the durability of those Fracking wells, it seems their yields fall off much more sharply than they want to admit.  

Anyway, LNG is not economical, this is about something else.  I don't think Anchia knows he's full of shit, the lobbyists have no doubt hatched this "ingenious" plan to get access to that clean up fund.  You people need to not jump offsides so quickly, and really pay attention to what the real angle is.  It's conceivable that Japan would represent a market for some natural gas, though that's likely to be short lived.  And, Japan would be better served getting NG from Asia.  China must have ample reserves, if they've yet to tap them, and Russia no doubt does.  South Korea would like a gas pipeline as well, and much discussion is ongoing to bring a pipeline from China through N Korea into to S Korea.  

It's much easier to export fracking technology than it is to export natural gas.  Why do we imagine that our surplus due to this new tech won't turn into a global surplus due to the same tech? 

director21
director21

Anchia has proven to be just another fraud representing himself as a "man of the people" when the only people he actually cares about are those who contribute megabucks to political campaigns. At the Sunset Commission hearing on TCEQ and the Railroad Commission of Texas last year he said what we wanted to hear, but apparently he did not hear what we had to say. Now, the truth is out and it appears that he and his staff are as clueless as they were before many of us spent a lot of apparently wasted time trying to inform them about the natural gas issue.

Texas truly does have the best politicians money can buy. Unfortunately, our side does not have enough money to get the right ones.

TXsharon
TXsharon

It is shocking to see this from Anchia, especially after the townhall meeting in Arlington late last year where he heard about 80 people tell their stories of impacts from fracking. I have to believe that he doesn't understand this bill and if enough of us call he will change course. If he doesn't, then he might be in the wrong political party. 

I did speak with his legislative person yesterday and he was incredible uninformed. He kept talking about national security and didn't seem to understand the irony of this bill and those statements. 

Gangy
Gangy

Yes, he will be hearing from us quite loudly.  How can he encourage the PERMANENT reduction of our fresh water supply and endanger the lives of the citizens in his district and in many parts of Texas?!  I'll have to take a look at his donor list.

anon
anon

@director21 does this bill allow additional drilling activity? or does it simply allow us to export what we're already producing? I don't see the logic in preventing us from getting the best price for something we are already producing. the reality is, shale gas is going to be produced in the near term in great quantity. what you're confusing for backstabbing is pragmatism and a nuanced view of issues. not everything can be a line in the sand. 

director21
director21

@anon@director21 Exactly who are you referring to when you say, "I don't see the logic in preventing us from getting the best price for something we are already producing." I am not getting one penny from selling that gas. Are you?

And no, this bill does NOT allow ANY drilling. It has nothing directly to do with drilling, though it does promote it because you cannot export what you do not have.

Now, let's just look at the facts and leave all the bullshit aside. In the US today there are ZERO LNG export terminals. There has been ONE import terminal approved for conversion to export (Chenier at Sabine Pass on the Gulf of Mexico.) There are six other existing import terminals that have applied for permits to convert to export capability, but none has yet received approval.

According to industry experts, it will require 23 export terminals to send enough gas overseas to make a significant impact. That means at least 15 new export terminals have to be build from the ground up.

Conversion of an import terminal to export capability requires about 5-7 years and about $7-10 Billion. Building a new export terminal from scratch requires at least a decade, probably longer, and about $10-15 Billion. Wall Street is starting to run away from natural gas. And, we are probably at least a decade away from having any significant export capability.

Russia has natural gas reserves that dwarf those in the US. China has natural gas reserves that dwarf those in the US. China already owns 68% of Chesapeake Energy, which they acquired for the technology, not the gas or leases. Both Russia and China are working fast and furious to develop their own production and export capabilities unfettered by little things like environmental regulations, fair labor practices or competitive fairness.

Long before US exports have a prayer of reaching European or Asian markets both Russia and China will be able to offer gas at much lower prices with a fraction of the delivery cost, which will eviscerate any hope of US exports.

It is not pragmatic to pretend that some future market exists that probably will never exist. That is "playing ostrich" where you bury your head in the sand thinking nobody sees you while they walk up behind you and kick you in the ass. Unless you know Anchia, and have heard his public and private conversations with us about this subject, you are not in a position to rate what he said and what he has done.


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