Opposition to US LNG exports could lead to ban: API economist

Washington (Platts)--17Jan2013/220 pm EST/1920 GMT


An industry economist on Thursday blasted opposition to expanding liquefied natural gas exports as a "knee-jerk reaction" to energy experts and, potentially, the start of an all-out export ban.

In a conference call with reporters, John Felmy, chief economist with the American Petroleum Institute, painted calls for limits on US LNG exports as "creeping regulation" which could lead to a ban and compel other nations to pursue trade sanctions against the US.

"What puzzles me about this whole situation is, in general, we as a country strongly support exports of everything but energy," Felmy said. "For some reason we get ourselves all wrapped up in a concern that energy is somehow a strategic commodity and we shouldn't export it and we shouldn't take advantage of the benefits that exports are."

Felmy said that restricting LNG exports "makes no more sense than unnecessarily restricting the export of chemicals, agricultural products or cars."

Felmy's argument was the latest in the ongoing fight over the Obama administration's looming decision over whether to expand LNG exports to countries the US does not have a free trade agreement with.

Under current law, DOE is supposed to quickly approve applications to export LNG to countries that have formal free trade agreements with the US. But in cases involving non-FTA countries, DOE must determine whether those exports are in the US' "public interest."

The fight has pitted oil and gas groups, like API, against groups such as the American Public Gas Association, aluminum producer Alcoa, steel producer Nucor and the Dow Chemical Company, who argue an expansion of LNG exports will unnecessarily cause natural gas prices to rise.

On Thursday, Tulsa, Oklahoma Mayor Dewey Bartlett sent a package of letters signed by 16 other mayors of cities in Texas, Arkansas, Oklahoma and Louisiana to Energy Secretary Steven Chu, urging him to speed up the approval of LNG export facilities.

"In our collective view, it is time to bring a renewed sense of urgency to the approval process," Bartlett wrote.

Bartlett wrote that there was trepidation that LNG exports facilities were being developed "aggressively" in Australia and Canada with government backing.

"In fact, it is estimated that more than 2 percent of the GDP in Australia will be tied to LNG exports after 2016," Bartlett wrote.

In a conference call with reporters Thursday, Bartlett said restrictions on LNG exports represent a "missed opportunity" for municipalities throughout the US who depend on energy jobs. Bartlett said a recent study found that 191,000 of Tulsa's 400,000 jobs were related to the oil and natural gas industry.

--Brian Scheid, brian_scheid@platts.com
--Edited by Jason Lindquist, jason_lindquist@platts.com

 

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