An influential group of US Senators has strongly opposed the idea of making large-scale exports of liquefied natural gas (lNG) to India, China and other nations, arguing that such a step would hurt the US economy, hitting both consumers and businesses hard.
In a letter to President Obama, 22 Senators, all Democrats except for one Republican and one Independent, said American families would be faced with skyrocketing energy bills, while the hundreds of thousands of jobs created in the manufacturing sector because of low natural gas prices would also be threatened.
"liquefied natural gas shipments to China, India, Japan, South Korea, and other Asian nations account for about 70 percent of the global trade of liquefied natural gas. Based on the contracts US exporters already have in place, Asia would likely be the primary destination of US natural gas exports as well," they say, contending the move is fraught with danger for the American economy.
But this growth of US natural gas exports "could lead to further increases in prices for American consumers and businesses, which may fundamentally reverse many of the economic benefits that have led to the current surge in manufacturing job growth in the United States".
"large-scale exports of natural gas to Asia could also jeopardize America's goal of achieving energy independence, a goal made more achievable by the recent increase in domestic gas production," they said.
The United States has benefited from rising supplies of natural gas and consequent lower prices since 2008. Citing a Boston Consulting Group estimate that affordable natural gas prices could lead to 5 million more manufacturing jobs in the US by the end of the decade, the Senators said: "We must ensure that we do not squander what is clearly an American competitive advantage right now for American manufacturers and for the American economy."The group's representation to Obama comes at a time when Republican and Democratic negotiators in Congress have been working towards moving the energy efficiency legislation, along with a vote on the controversial Keystone pipeline issue.
The American lNG industry is sensing a big opportunity with the Ukraine crisis that has nearly doubled natural gas prices. In contrast to the bipartisan group's concerns, the Centre for liquefied Natural Gas believes the US can provide lNG to the global market and simultaneously create thousands of domestic jobs.
"In order to reap these economic and geopolitical benefits, the US must not shy away from our role as a global energy leader," says Bill Cooper, president of the lNG body. The US Department of Energy (DOE) has approved only seven lNG exports permits since 2011, while 24 applications remain pending. "The president now has the opportunity to match rhetoric with action by telling DOE to cut through the red tape and expedite the review of pending lNG export applications. Seventeen of the 24 applications awaiting review need nothing more than DOE consideration to receive authorizations," Cooper wrote in Roll Call, the Capitol Hill journal.