Moniz sees half of QER spending on grid and gas improvements 

Source: Mike Lee, E&E reporter • Posted: Monday, April 27, 2015

HOUSTON — About half of the $15 billion in federal spending proposed in the Department of Energy’s Quadrennial Energy Review would go to modernizing the electric grid and providing incentives to replace aging natural gas lines, Energy Secretary Ernest Moniz said.

It will be up to Congress to find a source of funding, although about $350 million has been set aside for grid modernization in the Energy Department’s fiscal 2016 budget, Moniz said during a press conference at the IHS CERAWeek conference here. He also touched on the U.S. oil export ban, the Trans Pacific Partnership trade agreement and liquefied natural gas exports.

The Quadrennial Energy Review, released on Monday, calls for a combination of spending and tax credits over a decade to strengthen U.S. energy infrastructure and offset the effects of climate change.

“A lot more than that needs to be spent,” Moniz said. “That’s what we proposed in terms of federal spending … in many cases hoping to leverage much higher amounts of private-sector spend.”

One of the biggest proposals is $4 billion dedicated to natural gas distribution systems. Aging natural gas lines are both dangerous and a source of greenhouse gases, but it will cost a quarter-trillion dollars to replace them, Moniz said.

The proposed federal spending would be used to offset the impact on needy ratepayers, he said. Another $3.5 billion is proposed for the grid.

Oil exports are a frequent topic at the CERAWeek conference, which attracts energy companies from around the world. Sen. Lisa Murkowski, an Alaska Republican, opened the conference by saying it’s unfair to restrict American exports when the United States is considering allowing Iran to export oil to Europe as part of a nuclear deal.

Moniz said the U.S. and Iranian situations are “very different” and said there’s been little resolve in Congress to lift the ban.

“In a situation where we still import 7 million barrels of crude oil a day, I don’t think an overly compelling argument can be made on the basis of pragmatic economics,” he said.

The Trans Pacific Partnership could open up Asian markets to U.S. natural gas exports, and also to renewable-energy and energy-efficiency technology, Moniz said.

“We hope to see a very, very robust clean-energy technology market,” he said.

The Energy Department licenses companies to export liquefied natural gas, and the first for the United States is likely to be shipped as soon as this year. Moniz said it’s an example of how the U.S. shale-drilling boom is affecting the world economy.

“In this decade, we will be an LNG exporter on the scale of, say, Qatar,” Moniz said. “Even without the first LNG exports, we’ve already had a major impact because we would have been importing a lot of LNG right now.”