An Open Letter To Rick Perry On Natural Gas Exports
https://www.forbes.com/sites/jamestaylor/2017/04/19/an-open-letter-to-rick-perry-on-natural-gas-exports/#5224c0fd6a06APR 19, 2017
Dear Secretary Perry,
Last week you received a letter from a special interest group, the Industrial Energy Consumers of America (IECA), imploring you to expand the power of government to prevent energy producers from building natural gas export terminals. The letter also asked you to create new layers of bureaucracy and regulations to stifle what little natural gas exports currently occur. I hope and trust you will not be tempted to expand government and curtail economic freedom as the special interest group desires.
High Demand for American Natural Gas
America is positioned to become the OPEC of natural gas. Our vast natural gas resources together with our technologies and efficient production allow us to produce and sell natural gas at a much lower price than other leading producers. Russia, for example, leads the world in proven reserves and exports, but the price of Russian natural gas is twice as high as the price of American natural gas. The world is clamoring for clean-burning natural gas, and Russia rather than America is getting rich off this demand because the United States has only one operational export terminal.
The IECA, a special-interest trade group whose members purchase and use large quantities of natural gas, seeks to have government block the construction of new export facilities – and impose new restrictions on existing exports – because the trade group believes stifling exports and preventing overseas customers from offering to buy U.S. natural gas will keep prices low. The trade group then argues that government intervening on its behalf is good for America’s national interests as well as its own interests. The trade group’s arguments fail to stand up to logic and facts.
Exports Bring Net Economic Benefits
Many abundant natural gas resources are being left in the ground because supply saturates domestic demand and it is not economical for energy companies to produce more natural gas for a limited quantity of customers. Allowing energy companies to access foreign demand will do little to raise domestic natural gas prices because the demand can be met through increased production of easy-to-access resources. Rather than forcing more customers to chase limited supply, allowing energy producers to market their products overseas will incentivize energy producers to produce more easy-to-access natural gas. The IECA sees American natural gas production as a limited economic pie for which customers must fight each other for access. Instead, American energy companies can easily expand natural gas production if they are allowed to sell natural gas overseas....
