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US must exercise restraint on LNG exports

LNG Industry,

A bipartisan group of 22 US senators has urged US President Barack Obama to consider the possible impacts on American manufacturing and families that rely on natural gas for heating, when looking to approve new LNG export facilities.

Increased exports?

The group, led by Energy and Natural Resources Committee member, Debbie Stabenow and Foreign Relations Committee member, Edward J. Markey, addressed a letter to the President, in which they pointed out that families saw skyrocketing energy bills this winter in some parts of the country, faced with short supplies of natural gas and propane, shortages that could be exacerbated with increased exports.

They also highlighted the hundreds of thousands of US manufacturing jobs created over the last few years, in part because of low natural gas prices. Unlimited new exports of natural gas could raise prices for American families and manufacturers.

Letter extracts

“Families and businesses depend on affordable and reliable supplies of natural gas. This winter many parts of the country faced tight supplies of propane and natural gas and families were left to face high energy bills.

“Taking a longer-term view, the United States has benefited from rising supplies and lower prices for natural gas since 2008. Thanks in part to lower natural gas prices, America's manufacturing sector has created more than 600 000 jobs since 2010. The Boston Consulting Group concluded that affordable natural gas prices could lead to 5 million more manufacturing jobs by the end of the decade. 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.

LNG export approvals

“Recently, the Department of Energy approved exports of liquefied natural gas from a sixth export facility. This means that total approved exports, combined with existing and approved export pipelines, now exceeds the total amount of gas that is currently used in every single American home and commercial business.

“Liquefied natural gas shipments to China, India, Japan, South Korea, and other Asian nations account for about 70% 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.

Asian gas prices

“Natural gas prices in Asia are currently three to four times higher than those in the United States. Integration of US and Asian natural gas markets through US 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 jeopardise America's goal of achieving energy independence, a goal made more achievable by the recent increase in domestic gas production.

It is imperative, both for American jobs and for the environment, that the Department of Energy continue to consider the public interest and the cumulative impact of potential exports on US consumers and businesses before granting approval of natural gas exports to countries with which the United States does not have a free trade agreement.”

Supporting senators

The letter is signed by Senators Tammy Baldwin, Richard Blumenthal, Cory Booker, Barbara Boxer, Sherrod Brown, Susan Collins, Dick Durbin, Dianne Feinstein, Al Franken, Tom Harkin, Angus King, Patrick Leahy, Carl Levin, Joe Manchin, Edward Markey, Bill Nelson, Jack Reed, Jeanne Shaheen, Debbie Stabenow, Elizabeth Warren, Sheldon Whitehouse, and Ron Wyden.

Edited from various sources by Katie Woodward

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