More than 100 members of the House of Representatives have called on Energy Secretary Steven Chu to approve exports of liquefied natural gas (LNG), and ExxonMobil and America’s Natural Gas Alliance (ANGA) followed suit. But a group representing natural gas municipal utilities urged the Obama administration to reject the export applications that are pending at the department.
“The growth of the natural gas industry drives job creation, increases tax revenue, royalties and supports domestic manufacturing. However the continued growth of this industry is reliant on steady demand…which we believe can responsibly include the export of LNG,” wrote the coalition of 110 House members, both Democrats and Republicans, in a letter to Chu Thursday.
“We are pleased that the NERA Study commissioned by DOE supports this, indicating the export of LNG will provide economic benefits to our nation,” the lawmakers said.
Comments were due Thursday on the NERA Economic Consulting study, which found the U.S. would gain “net economic benefits” from allowing LNG exports (see Daily GPI, Dec. 6, 2012). It was the second DOE-commissioned study on the issue. The first report came in January 2012, and concluded that LNG exports could increase domestic gas prices paid by residential, commercial and industrial customers by a range of 3-9% (see Daily GPI, Jan. 20, 2012).
According to ExxonMobil, “Although the NERA study is very thorough, we believe it is somewhat conservative in its findings. In our view, the U.S. natural gas resource base is likely even more productive than assumed, and there are added benefits of LNG exports for increasing employment and capital investment during a weak economic recovery in the U.S…[B]y exporting LNG, the U.S. economy can reach full employment faster than it can without exports.”
Since there is an extensive domestic supply chain for the oil and gas industry “a larger portion of the dollars spent here stay here and support American jobs.”
The domestic economy also will get a boost from the massive investments in LNG export terminals. ExxonMobil estimates that for “the NERA scenarios of 6 bcfd and 12 bcfd of exports, new investments could total $30 billion to $60 billion or more. These facilities will stimulate manufacturing demand because they require equipment, specialty piping and other goods produced in the U.S.”
“We encourage the DOE to adhere to its tradition of embracing free trade principles by avoiding artificial limits on U.S. exports of LNG,” the producer said.
“Hindering the free trade of natural gas is in direct opposition to longstanding U.S. free trade principles, World Trade Organization agreements, and the Obama Administration’s advocacy for increased U.S. exports…[The] international trading system breaks down when countries implement artificial trade barriers to benefit specific domestic business interests at the expense of the broader national economy.”
The company pointed out that it has a foot in both camps, as a producer and prospective LNG exporter and end user of natural gas with plans for building a world scale petrochemical plant expansion at its Baytown, TX complex.
A feature not captured by the NERA study is that increased natural gas production likely will mean an increase in natural gas liquids (NGLs) which will benefit U.S. chemical plants.
However, the American Public Gas Association (APGA), which represents 950 publicly owned distribution system in the U.S., blasted both studies, saying they “exaggerate the benefits, downplay the potential harms, and fail to consider the foregone opportunities entailed by LNG exports,”
The DOE “should, in the exercise of its public interest discretion, look beyond these studies to consider the profound tradeoffs that will result from a policy that permits the aggressive export of a valuable fuel source in the U.S. rather than supporting its expanded use domestically.
“The DOE must either reject the various LNG export applications before it or at a minimum place prudent limits and conditions on such exports in order to mitigate these harms and prevent the United States from squandering the almost unlimited potential domestically of the abundant natural gas supplies resulting from the so-called ‘shale gas resolution,'” the APGA told DOE.
APGA has protested each export application pending at DOE. “Those protests point out…that the United States is at a crossroads; it can take the path toward energy independence and a manufacturing renaissance or it can reflexively approve LNG exports, with the associated greater profits for the affected companies, but it cannot have it both ways.”
The ANGA producer group believes some opponents of LNG exports are using faulty facts to justify their positions. “A small number of companies …are seeking to limit the export of LNG. America’s Energy Advantage [AEA], a coalition backed by a few large domestic natural gas users, defends its position based on estimates for natural gas demand that are 50% higher than DOE estimates and a flawed [analysis] of the impact of U.S. natural gas exports on domestic prices,” the group said.
“Their position, in opposition to LNG exports, is fundamentally contrary to basic economic principles,” ANGA noted.
Huntsman Corp. earlier in the week joined America’s Energy Advantage, a coalition of U.S. manufacturers and others opposed to proposals from LNG exporters to permit the unlimited export of domestic gas. Also opposed to LNG exports, Midland, MI-based Dow Chemical Co., said it opted to leave the National Association of Manufacturers when the association placed the interests of oil and gas producers above the interests of its manufacturer members (see Daily GPI, Jan. 24).
Associations representing interstate natural gas pipelines and gas distribution lines have expressed their unwavering support for U.S. sales of domestically produced gas to foreign countries. The American Gas Association (AGA), a group of gas distributors, “does not oppose the exportation of natural gas as LNG,” wrote Andrew K. Soto, AGA senior managing counsel, in comments submitted on the second DOE report released in December (see Daily GPI, Jan. 25).
Â©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |