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Export! Export! Export!
Since 2008, natural gas prices in the United States have plummeted to less than 4 dollars, while prices abroad remain significantly higher (See graph). This price disparity means US natural gas producers have a huge opportunity to sell natural gas abroad and invest profits in more domestic development. Limiting natural gas exports would be a blunder beyond description, and would have disastrous impacts on trade and energy policy for years to come.
Most agree that increasing exports is the right path. Here are just a few:
Real Clear Energy Editorial Board:
“The price differential is a magnet for U.S. exports. Building an LNG terminal and getting the required federal permits, however, is an arduous process. Already there is opposition in Congress, based on the premise that exporting gas will drive up the price to households and industrial users. The Department of Energy, on the other hand, argues that exports would probably only reverse the trend for shutting in wells because of low prices. And of course exports would do wonders for our balance of trade. Foreign policy experts are also saying that gas exports could break Russia’s stranglehold on Europe and improve our influence in the world.”
The Brookings Institute:
“The study recommends that U.S. policy makers should refrain from introducing legislation or regulations that would either promote or limit additional exports of LNG from the United States…Efforts to intervene in the market by policy makers are likely to result in subsidies to consumers at the expense of producers, and to lead to unintended consequences. They are also likely to weaken the position of the United States as a supporter of a global trading system characterized by the free flow of goods and capital.”
“America is in the middle of an appalling jobs crisis. Dramatically increasing the production of domestic hydrocarbons—oil, natural gas, and coal—offers the single biggest opportunity to generate jobs, especially those in the hard-hit middle class, and to create collateral financial benefits to state and federal treasuries. Not in nearly 50 years has the energy “ground game” changed so radically. But capturing these opportunities requires bold policies. This positive energy future isn’t inevitable. The United States could by default walk away from all these jobs and revenues, passing up the chance to become the major player in world energy markets. Should this happen, other nations will step in to fill the void.”
The Washington Post Editorial Board:
“It would be particularly perverse for the Obama administration, which has made an explicit commitment to increasing the nation’s exports, to preserve restrictions on natural gas exports. The government should permit energy companies to sell as much of the fuel as the economics warrant, whether in Germany or Germantown.”
The New York Times Editorial Board:
“Exporting natural gas is a controversial issue, with powerful forces on both sides. But we are persuaded by the report’s core finding that the benefits of selling gas to other countries would more than offset the modestly negative impact of higher prices for domestic users of the fuel.”