Group urges caution on U.S. LNG exports

Jan. 11, 2013 at 1:43 PM
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WASHINGTON, Jan. 11 (UPI) -- A group of major U.S. manufacturers have formed a coalition to lobby against "unfettered" natural gas exports, which they say would harm the nation's manufacturing growth and cost jobs.

"America's Energy Advantage," launched Thursday, includes Dow Chemical Co., Alcoa Inc, Celanese and steelmaker Nucor Corp.

U.S. officials should "move cautiously on permitting natural gas exports in order to measure impact on price, security and jobs," the group says.

"The shale gas boom in this country has really brought a competitive advantage to the United States," George Biltz, Dow's vice president of energy and climate change, was quoted as saying by the Houston Chronicle, adding that the industrial sector uses 40 percent of U.S. natural gas.

Unfettered exports "would raise prices dramatically, would have a very negative effect on this industry and a massive ripple effect economically," he said.

A rush on natural gas exports, the coalition says, threatens some $80 billion in planned investments in new U.S. plants and assembly lines.

"The revolution in natural-gas production creates a real opportunity to reinvigorate our manufacturing sector," said Nucor Director of Public Affairs Jennifer Digginsr. "Nucor is urging our policy makers to proceed with caution" on exports.

While coalition members are all against unlimited natural gas exports, some have different expectations for export limits.

Blitz, for example, says 5 billion cubic feet a day in total exports by 2025 could be tolerated; American Public Gas Association, which represents publicly owned gas systems, is opposed to all exports.

Jack Gerard, head of the American Petroleum Institute which represents oil and natural-gas companies, called the coalition's efforts to restrict LNG exports "misguided."

"Short-sighted efforts by a few industrial users to restrict exports in an apparent attempt to control prices would deprive American families of the wider benefits of lower costs and increased job creation," Gerard said in a release.

"America's newfound abundance of natural gas resources is a boon to all domestic manufacturing through lower energy costs, lower costs on raw materials and reduced heating bills," he said.

An independent study conducted for the Department of Energy by NERA Economic Consulting issued in December concluded that LNG would benefit the U.S. economy and would not cause any major adverse effects on U.S. household wealth, employment or industrial competitiveness, Platts news service reports.

The Energy Department has said the study would help inform its reviews for the proposed exports.

But in a letter Thursday to Energy Secretary Steven Chu, U.S. Sen. Ron Wyden, D-Ore., the incoming chairman of the Senate Energy and Natural Resources Committee, called the study "seriously flawed," saying it used outdated information for the nation's gas demand, thus underestimating the effect of exports for U.S. consumers and major industrial users.

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