An Old But Still Mind-Boggling Story

I stumbled across a little factoid today while reading a piece by Kevin Williamson on National Review about free trade as a bedrock Republican policy and how that has become less of a bedrock policy in the age of Trump.  Williamson refers to the current tariff policies as the, "Wallace-Buchanan-Perot-Trump model of populist neo-mercantilism".  That's a label you don't see every day.

The part that made me fact check was this quote.

The Jones Act, an antediluvian anti-trade measure signed into law by Woodrow Wilson, has many unintended and destructive consequences, one of which is that Americans in the northeast and in Puerto Rico are being forced to import natural gas from Russia and the Caribbean at a time when the United States is producing jaw-dropping quantities of the stuff — but cannot get it from the places where the gas is to the places where the people are. This piece of old-fashioned crony capitalism hurts everyone from utility customers to manufacturers to farmers. [Bold added: SiG]

As America is taking over as the world's largest petroleum producing country, we need to import natural gas? From Russia?

As the title says, it's not a new story.  The easily found verificiation story is from March of '18 in the Washington Times.  The reason why this happens is also clearly stated.

Yet, even as we become a global energy superpower, political barriers prevent us from maximizing the benefits of the shale revolution.

Earlier this year, New England — located just a few hundred miles from the Marcellus Shale, one of the world’s largest natural gas fields — was forced to import a cargo of Russian liquefied natural gas. This was necessary because anti-energy activists have convinced local elected leaders to block new energy infrastructure, including pipelines that could bring American gas to the region. This is making households in the Northeast more dependent on imported energy, and forcing them to pay among the highest energy bills in the country. [Bold added: SiG]

They spend a bit of time and column space to explain that this is all a quite deliberate strategy called "keep it in the ground" from anti-progress groups.  The Conservation Law Foundation, a prominent anti-energy group in Massachusetts, and the Massachusetts Sierra Club have declared “No New Pipelines,” while the state’s attorney general thinks Russian Liquefied Natural Gas (LNG) is better for the climate than piping in American fuel.

Indeed, blocking access to affordable energy is one of the “Keep It In the Ground” campaign’s core strategies. “If we can forestall gas infrastructure being put in the ground and locking in that demand for the next 60 years,” said Sierra Club’s Lena Moffitt, “the hope is that renewables will come in and be cost competitive in all markets.” 

One might be tempted to say, "alright, so the greenies and Mass-holes don't want to build a pipeline to bring natural gas into their state.  Fine.  We can send it other ways."  Not quite.  At least, we can't ship it there by tankers that already leave the Gulf of Mexico to carry American LNG to other countries.  That previously mentioned Jones Act of 1920:

... prohibits cargoes from being transported between U.S. ports unless they are carried on American-flagged ships. The Jones Act attracted scrutiny last year when it prevented much-needed supplies from reaching Puerto Rico after it was devastated by Hurricane Maria. The Trump administration later temporarily waived the law to allow assistance to reach the battered island.

Because so much natural gas is being shipped from the US, there is a shortage of tankers (paywall warning) that carry LNG.  In the intervening year since this Washington Times article, an oil export terminal has come online in Maryland, Cove Point, and while it's certainly closer to New England than shipping from Texas or New Orleans "around the horn" of Florida and up the coast, the tanker shortage problem apparently remains.

For years, Texans have helped families in the Northeast meet their energy needs through existing pipeline infrastructure. Pennsylvanians who sit atop the Marcellus Shale are also well-positioned to help New Englanders meet their growing demand for affordable power. Clearly, the region needs more American energy — be it through pipeline or LNG — and less dependency on Russia.

As is often the case, both extreme environmental groups and costly federal regulations are standing in the way.

In the end, the situation in New England has nothing to do with trade policy and tariffs, but rather the same two things hurting Americans every day: extreme environmental groups and the Federal government.  Two things joined at the hip. 

Energy Information Administration map of the major natural gas fields in the US.  I've circled Massachusetts in red and you can see how close to the Marcellus and Utica Shale formations they are.  I'm assuming Fracking has been outlawed in Massachusetts, as it has in New York.  Otherwise, they might drill some wells and find that the gas fields extend into Massachusetts itself.  But then they couldn't send money to Vladimir Putin.  The Sierra Club, Conservation Law Foundation, and Massachusetts Attorney General bring vivid illustrations to the term, "watermelon socialist".  Green on the outside; on the inside they've got to send money to Russia.