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How Much Natural Gas Should the U.S. Export? How Much Natural Gas Should the U.S. Export?

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How Much Natural Gas Should the U.S. Export?

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Most Republicans are inclined to oppose any type of restriction on exports of natural gas, given that it runs counter to Republican free-market principles. But some lawmakers, mostly Democrats, say they’re worried that if the country exports too much natural gas, the low prices U.S.-based manufacturers and electric utilities have been enjoying for the last few years will shoot back up. (AP Photo/James MacPherson)(AP Photo/James MacPherson)

The Energy and Commerce Committee’s leaders and aides are unsure how to tackle one of the biggest debates in the energy space right now: natural-gas exports.

The Natural Gas Act of 1938 gives jurisdiction over exports to the Energy Department, which creates additional regulatory hurdles for companies seeking to send gas to countries that do not have free-trade agreements with the U.S. Many of the countries that want America’s shale gas the most, such as Japan and many European nations, have no such agreements.

 

To export gas to these countries, companies must complete a lengthy Energy Department regulatory-review process to determine whether the export terminal is in the country’s “national interest.” More than a dozen such permits are currently pending; only one project, operated by Cheniere Energy in Louisiana, has received approval.

Congress probably doesn’t have enough political will to change the 1938 law right now, but that gridlock hasn’t stopped lawmakers from examining the ramifications of exporting natural gas.

Most Republicans are inclined to oppose any type of restriction on exports, given that it runs counter to Republican free-market principles. “I don’t think you’re going to see anyone advocate we export all of our natural gas,” Energy and Power Subcommittee Chairman Ed Whitfield, R-Ky., said in an interview earlier this year. “We have such an abundance of it [that] I don’t think many people would be overly concerned if small amounts of that would be exported. It would certainly help our trade deficit.”

 

Whitfield’s subcommittee plans to hold a hearing on the issue this spring. But legislative intervention in the process, whether by the House or Senate, seems elusive at this point.

Some lawmakers, mostly Democrats, say they’re worried that if the country exports too much natural gas, the low prices U.S.-based manufacturers and electric utilities have been enjoying for the last few years will shoot back up. “We have the ability to get cheap energy … and that allows our manufacturing to start up again,” said Rep. Henry Waxman, D-Calif., the committee’s ranking member. But he has not taken a specific position on the issue.

This article appears in the April 18, 2013 edition of NJ Daily as How Much Natural Gas Should the U.S. Export?.

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