It is encouraging to see increased American development of energy having a worldwide impact. However, such impact should not come at the expense of subsidies and loans footed by the American taxpayer or special deals. Exelon, the largest nuclear energy company in America, has a diverse energy production portfolio. They also are involved in liquefied natural gas production and solar energy. With the current natural gas glut, prices are quite low, which has cut into Exelon's profits. These low prices also make natural gas power plants competitive with Exelon's nuclear plants. Never fear for Exelon though! The Obama administration is on the way! As an article at Crain's Chicago Business reports:
Exelon Corp. got a win last week when the U.S. Energy Department allowed a group of investors to build a facility in Texas that will export liquefied natural gas to countries without free-trade agreements with the U.S.
Don't see the connection? Every cubic foot of natural gas that's liquefied and shipped overseas is a cubic foot that doesn't get sold at rock-bottom prices to gas-fired power plants that compete with Exelon's nuclear plants. Low gas prices enable gas-fired plants to sell electricity cheaper, bringing down prices in wholesale power markets.
Exporting to non-free-trade countries requires special permission from the Department of Energy. Heated debate over the policy has erupted in recent months. Natural gas producers are pushing for more freedom to export, while environmental groups and big gas users like Dow Chemical Co. defend the current restrictions.
Some see last week's decision on the Texas facility as a sign President Barack Obama is leaning toward a looser export policy. It's a little early to draw that conclusion. Rather than articulating a broad policy shift, the administration says it will evaluate proposed non-FTA export facilities on a case-by-case basis. Until Friday, the DOE hadn't approved one since 2011. Nineteen applications are pending.Seeing the implication that President Obama is going to loosen policy on anything related to non "green" energy development is a surprise. There is perhaps reason to evaluate such special situations for export to non-free trade countries, but when a company like Exelon receives a deal, it is suspect. Exelon has a reputation for being an energy giant, but it also has a reputation for its ties to President Obama.
As a Senator, Obama watered down an anti-nuclear energy bill to help Exelon. Why? In 2008, Exelon was Obama's four largest donor. Additionally, Exelon has spent tens of millions of dollars for lobbying since President Obama took office. This lobbying has paid off. An Exelon acquired solar energy company received a $646 million loan from the Department of Energy in 2011 to build a solar energy plant.
It is exciting to see that natural gas production is booming in such a way that producers have opportunity to energize America and have opportunity for export. It is discouraging that "case-by-case" export opportunities are going to companies who have the political connections and clout to continue to receive special deals.
Crossposted here and here.