The Industrial Energy Consumers of America (IECA) on Wednesday called on the Trump administration to implement five policy recommendations, including a moratorium on further approvals of liquefied natural gas (LNG) exports to non-free trade agreement (FTA) countries, in an effort to protect the U.S. economy and consumers.
“Excessive LNG export approvals by the U.S. Department of Energy (DOE) to countries with which the U.S. does not have a free trade agreement is inconsistent with President Trump’s ‘America First’ and ‘fair-trade’ policies, and poses a significant long-term threat to energy-intensive trade-exposed industries’ competitiveness and jobs,” IECA said in a letter addressed to DOE Secretary Rick Perry and Commerce Secretary Wilbur Ross.
DOE’s approval in April of Golden Pass Products LLC to export up to 2.21 Bcf/d of LNG to non-FTA countries brought to 19.2 Bcf/d the total of non-FTA exports authorized by the department. At the time, DOE said domestic natural gas production was expected to continue increasing, with the U.S. Energy Information Administration (EIA) projecting an average dry natural gas production rate of 73.1 Bcf/d in 2017, the second-highest on record.
Federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA, the Natural Gas Act directs DOE to allow exports unless it finds that the proposed exports “will not be consistent with the public interest.”
Total LNG export approvals to FTA and non-FTA countries now equals 71.2% of U.S. 2016 natural gas demand, IECA said.
“This breathtaking amount of natural gas is committed under agreements for 20 to 30 years to foreign countries, and has exceedingly large negative potential implications for the U.S. economy, especially given the relatively small economic gains due to potential LNG exports,” said IECA President Paul Cicio. “Using natural gas in manufacturing creates eight times more jobs than exporting the gas.”
The EIA’s Annual Energy Outlook 2017, issued in January, “is forecasting Nymex natural gas prices will rise 87% by 2020, due in large part to LNG exports,” he said. “If future prices rise to global levels, the U.S. will have lost its competitive advantage and the incentive to invest in the U.S. would be gone, and onshoring by natural gas consuming manufacturing industries would also stop.”
Including Golden Pass, DOE has issued 25 authorizations for export to non-FTA countries totaling 7.01 Tcf of natural gas per year.
In addition to the proposed moratorium on further LNG export authorizations to non-FTA countries, IECA also called on the administration to monitor economic impacts of LNG export volumes, require re-permitting of LNG export applications that do not begin operations within five years, and not allow foreign governments to own in whole or part LNG export facilities or U.S. natural gas resources.
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