Some of the nation’s largest chemical makers and manufacturers on Thursday united as a new coalition to lobby against a wholesale rush to export America’s new natural gas bounty, which they say threatens some $80 billion in planned investments in new U.S. plants and assembly lines.
Dow Chemical Co., Alcoa Inc., Eastman Chemical, Dallas-based Celanese Corp., and others formed the new umbrella group “America’s Energy Advantage” to tout the benefits of limiting natural gas exports just as the Obama administration nears big decisions on the issue.
“The shale gas boom in this country has really brought a competitive advantage to the United States,” said George Biltz, Dow’s vice president of energy and climate change, noting 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.”
The group hopes to cast/is casting natural gas as a strategic resource for the United States that is better used to power manufacturing plants and as a component in American-made plastics and chemicals sold across the globe than exported as a raw material.
Jennifer Diggins, director of public affairs for steel producer Nucor, urged caution.
“We need to be smart and take a balanced approach in using our valuable resources,” Diggins said. “We have an opportunity here _ one that should be considered an advantage for our domestic players.”
The Energy Department is weighing applications from more than a dozen companies to sell up to 22.6 billion cubic feet of natural gas per day to countries that don’t have free trade agreements with the United States.
Energy producers argue exports would be good business, broadly benefiting the United States and lifting natural gas prices enough to sustain a domestic drilling boom.
A government-commissioned study issued in December concluded that even unlimited exports would broadly benefit the U.S. with up to $47 billion in new economic activity. But that net positive benefit would come with some casualties, including price increases for companies that are big users of energy produced by burning natural gas or are heavily reliant on the fossil fuel as a building block for producing chemicals, fertilizers and other products.
Sen. Ron Wyden, D-Ore., the incoming chairman of the Senate Energy and Natural Resources Committee, who has been critical of natural gas exports, on Thursday called the report “seriously flawed” and cautioned the Energy Department against relying on it.
The founding members of America’s Energy Advantage are united in opposing unlimited natural gas exports, but haven’t come together on some specific policy questions _ such as whether there’s a sweet spot with just enough exports to sustain domestic production as well as industrial growth.
Dow’s Biltz said he believed 5 billion cubic feet a day in total exports by 2025 could be tolerated. But another coalition member, America’s Public Gas Association, which represents publicly owned gas systems, opposes all exports.
A poll commissioned by the coalition found that most _ 80 percent _ surveyed American voters believe companies should not be allowed to export natural gas without restrictions. The survey of 1,000 registered voters, conducted by MWR Strategies, also found that even among those who support exports, 52 percent support some limits on those foreign sales.
It’s not clear how the Energy Department might approve some applications while cutting off others, although analysts widely believe the agency will consider pending license requests on a first-come, first-served basis.
Current law presumes that exports of natural gas are in the public interest, so rejecting them requires a demonstration that the foreign sales would harm the public. The Energy Department could conclude some exports are in the public interest initially, and deny future licenses on the grounds that at a certain point, those exports would harm the U.S.
The energy industry hit back against the coalition’s pitch on Thursday.
American Petroleum Institute President Jack Gerard called the push a “short-sighted” campaign “by a few industrial users to restrict exports in an apparent attempt to control prices.”
“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. “Restricting exports of energy as a ‘strategic resource’ makes no more sense than unnecessarily restricting the export of chemicals, agriculture products or cars.”
Bill Cooper, president of the Center for Liquefied Natural Gas, insisted that exports would help sustain economic growth nationwide by stimulating domestic energy production.
“America’s new-found natural gas supplies are so abundant that we can meet our needs here at home and enhance America’s competitiveness in the global marketplace by selling some to our trading partners at the same time,” Cooper said.