Natural Gas: Everything is connected to everything.

President Biden stopped plans for 17 new natural gas export facilities.

U.S. climate activists called it a win. 

Maybe. Sort of. 

Reducing natural gas exports is a mixed-blessing win for Biden. It makes organized climate activist groups in the U.S. happy. It will reduce natural gas prices in the U.S., which will make make consumers happier, if they recognize Biden's hand in that. But it will make some energy workers less happy. Those include people in New Mexico and Pennsylvania, two states Biden needs to win, and those workers know whom to blame. 

There are other mixed consequences. Reducing U.S. exports of natural gas lowers prices for Americans -- good -- but it shifts some of that market back to Russia. That increases the economic and strategic interdependence of Russia, India, and China. It also makes the world price of natural gas higher for Europe, our allies in the effort to help Ukraine stay independent. All that is bad.

The primary reason for the Biden administration's move is climate. Theoretically, it makes renewable energy more competitive in most of the world, since it raises the world price of natural gas, although it makes renewables less competitive in the U.S., where we have the technological capacity to weigh the tradeoffs and make choices. Those are mixed market signals. The export ban sends a two-part signal to growing economies like India's and China's, causing them to decide to build coal plants with 50-year lives rather than natural-gas-based energy facilities. They need to consider long-term reliable sources that would justify port and transmission infrastructure needed to receive liquefied natural gas. Worse, we are not reducing overall global greenhouse gas emissions. We are sending the emissions offshore, where environmental regulations are more lax. Not good.

Natural gas is far from perfect, but it is far cleaner and safer than coal -- the world's leading method for generating electricity. 

Our World in Data

Natural gas is a bi-product of shale oil production. There is a mismatch between production and consumption locations. Natural gas has negative value at many oil shale sites. The image below shows where natural gas is being flared off because the producers cannot get it to market. The bright spot in the center of the image is the Bakken oil shale deposits in western North Dakota. Further south is an intense yellow and orange spot, the Permian Basin oil shale of West Texas and New Mexico. Below and to the right of that is an orange swoop, the Eagle Ford oil shale field.

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Pipeline infrastructure is notoriously hard to site. The Keystone Pipeline connecting Canadian energy with U.S. pipelines drew national attention. A pipeline that would have sent mid-continent natural gas through southern Oregon on its way to a liquefaction plant for export to Asia from the port of Coos Bay, Oregon, drew bi-partisan opposition locally. Rejecting those pipelines was a "win" on the scoreboard of climate activists, but the excess natural gas did not disappear. It lights up the night sky.

Banning natural gas exports cuts both ways on inflation. Cheaper natural gas in the U.S. will make American-produced fertilizers and plastics less expensive, improving our competitiveness. It is a pro-U.S. move. But many American supply chains involve foreign manufacture, and this raises the price of traded goods worldwide. Bottlenecks and inefficiencies in trade tend to raise prices overall, as we saw in events as big as the Covid disruption and as singular as a ship stuck sideways in the Suez Canal. 

Biden's decision is consequential, but it reveals an ongoing limitation for Biden and Democrats. Biden has many skills, but narrative-shaping is not one of them. The people hurt by this decision -- energy workers, construction workers, oil companies -- will tell their story. Republican officeholders will announce that Biden helped Russia and hurt energy-producing states. The benefit side of this two-sided coin needs a narrator. Biden isn't doing it well. Kamala Harris isn't doing it at all. A Democratic primary succession struggle might have given visibility to people saying that we need more of this kind of America-first energy policy, and have brought it to widespread attention. That didn't happen.

Democrats fret that while things are objectively good in the economy, few people feel it or believe it. The economy is, indeed, objectively good and getting better. But some stories are complex and need a persuasive narrator to put it all together.

I don't hear one. Democrats have less than a year to find their voice.

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