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Market-distorting energy subsidies vs. the market As energy consumers, Americans benefit most when all of the nation’s energy sources play a role in supplying the grid. Subsidies, like those recently pushed for nuclear plans in New Jersey, Ohio and Connecticut create a distorted market with an uneven playing field and do a disservice to energy consumers. While voters in key states like Pennsylvania, New Jersey, Ohio and Connecticut have made it clear in the polls that they don’t want to pay for nuclear plant bailouts, a recent IHS Markit study oddly suggests that the solution to market distorting subsidies to some energy sources is more subsidies. The study says that: Subsidies for specific generating technologies do not reduce, but rather shift, some of the cost of specific electric generation technologies. Federal subsidies shift some costs from consumer power bills to current or future consumer tax bills. In addition, some state subsidies shift costs from consumers with distributed generation resources to those without. Since subsidies shift costs, the result is the development of more subsidized resources than are cost-effective with a level playing field. As a result, an economic rationale exists for market interventions to offset the unintended consequences of the uneven playing field. Allowing the market itself to choose winners and losers in energy sourcing is the best approach to electricity generation for consumers. Factors like reliability, affordability and efficiency come into play, and unbiased markets allow for the innovation and competition that results in real solutions like lower prices and a better end-product. Natural gas was the leading energy source in the United States in 2016 with its growth attributed not to subsidies, but to the market. A recent study examined different energy sources to determine their reliability when supplying the future U.S. power grid. Study results show that “natural gas is uniquely positioned among energy sources to supply attributes – dispatchability, ramp rates, frequency response and others – that ensure the future reliability of the U.S. power grid.” These results demonstrate how natural gas provides a reliable source of energy, without subsidies that tip the market. While the idea is not to argue against other energy sources, the market and consumers alike can see the advantages offered by natural gas. And ultimately, the advantages offered to consumers by a market free of distorting-subsidies.

What is liquid natural gas? Changing natural gas to its liquid state makes storage and transportation of the resource much easier, as it shrinks in volume about 600 times. Liquified natural gas, commonly referred to as LNG results when natural gas has been cooled to a low temperature of -260 degrees F. Impurities are removed and the nontoxic liquid is clear, odorless and noncorrosive. The condensed liquid is transported by ship and when it reaches its destination, it is off-loaded into insulated storage tanks. Regasification is the process that converts LNG to its gas form, which then enters a pipeline distribution center and can be delivered to the consumer. Exports LNG exports from the United States provide the global market with a safe, alternative and reliable source of energy. And exporting natural gas offers economic benefits to the United States, including the thousands of jobs created by domestic production. It is estimated that the export of LNG could provide $10 billion to $31 billion to natural gas producing states. Demand for supporting equipment and goods and other materials like steel and cement benefits even non-natural gas producing states. Safety Over several decades, LNG and its exportation have been handled safely; more than 135,000 carrier voyages have occurred without major accident or security issues. LNG ships are designed to prevent rupture or leakage and they are equipped with numerous technologies for safety and accident prevention. To ensure safe handling and transport, LNG is regulated by the following federal agencies, among others: Federal Energy Regulatory Commission Department of Transportation S. Coast Guard Department of Homeland Security

How Do Natural Gas Pipelines Work? In the 1920s, natural gas was discovered in the United States’ Great Plains. Upon that discovery, the rate of pipeline construction increased sharply to accommodate a growing need for natural gas as a heating fuel in large Midwestern cities. Since then, the United States has developed a sprawling natural gas pipeline network, composed of over 300,000 miles of transmission pipelines, and more than 210 separate natural gas pipeline systems. This large system can transport natural gas to and from virtually any location in the lower 48 states through both interstate and intrastate pipelines. During the transportation process, natural gas passes through many physical transfers and processing steps. Natural gas is sourced from a producing well or field, and then sent through three main natural gas pipeline types: Gathering pipelines are small-diameter pipelines that move natural gas from a wellhead, to either a mainline transmission grid, or processing plant, depending on the quality of the initial product. Processing plants separate hydrocarbon gas liquids, nonhydrocarbon gases, and water from the natural gas before it is sent to a transmission system. Transmission pipelines are wide-diameter, long-distance pipelines that transport natural gas from the producing and processing areas to storage facilities and distribution centers. A number of compression, or pumping stations line transmission pipelines. These stations contain one or more compressor units that receive the transmission flow from a previous station, and increase the rate and pressure of flow to sustain the movement of the gas along the multiple pipelines it needs to travel to reach markets and consumers. Distribution pipelines, or local distribution lines, move gas closer to cities and residential areas, where local distribution companies reduce the pressure of the natural gas to a level that is suitable for residences and commercial establishments. Smaller service lines travel to the homes, businesses, or industrial areas in need of natural gas.
Is natural gas a type of clean energy? One of the major benefits of natural gas is that it’s a type of clean energy, offering environmental benefits over other fossil fuels like coal that include reduced CO2 emissions. In fact, CO2 emissions from natural gas are half of those resulting from coal. The increased reliance on natural gas over the past few years has resulted in the lowest CO2 levels the power sector has seen in nearly three decades. The U.S. Energy Information Administration attributes this benefit to the use of natural gas for energy production. Use of natural gas over coal is credited for nearly two-thirds of reductions in CO2 emissions from years 2006 to 2014. But, the environmental benefits do not end with CO2 emissions. As a source of energy, the use of natural gas will reduce other emissions including: NOx SO2 PM Acid gasses Hg Non-Hg heavy metals In addition to its environmental benefits, natural gas is helping the United States toward economic-related environmental and energy sustainability goals. According to the United States Department of Energy, “The clean energy industry generates hundreds of billions in economic activity, and is expected to continue to grow rapidly in the coming years. There are tremendous economic opportunities for countries that invent, manufacture and export clean energy technologies.”

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