Page 4 - NorthAmOil Week 38 2021

NorthAmOil COMMENTARY NorthAmOil

US manufacturers call for

restrictions on LNG exports

The expansion in US LNG exports is putting the
squeeze on domestic industry, IECA has warned

US A major trade group in the US has urged the cheap gas to ensure sufficient margins, and this
government to take steps to curtail the coun- has led the group to adopt a somewhat contra-
try’s LNG exports, warning of high domestic dictory position.
WHAT: prices and potentially shortages later this year. Concerns that a surge in LNG exports could
IECA has called for The request revives a decade-long dispute over harm domestic manufacturing are not new.
restrictions on LNG the economic benefits of rising LNG exports Back in 2013, then CEO of Dow, Andrew Liv-
exports and a freeze on and the impact that they have on the domestic eris, warned in a speech to the Senate Energy and
new project permitting. industry that depends on low-cost gas for power Natural Resources Committee that “unchecked
and feedstock. LNG export licensing can cause demand shocks,
WHY: Industrial Energy Consumers of Amer- and the resulting price volatility can have sub-
The trade body has ica (IECA), representing chemical, food and stantial adverse impacts on US manufacturing
warned of high gas prices materials manufacturers with some $1 trillion and competitiveness.”
and potentially shortages in combined annual sales, warned in a letter to Back then the US LNG industry was still at
this winter, undermining US Energy Secretary Jennifer Granholm that a nascent stage of development. But since the
the margins of domestic “US consumers, the health of the economy and country launched exports of the super-cooled
industry. national security should take priority over LNG gas in 2016, the number of projects in the pipe-
export profits.” line has ballooned significantly.
WHAT NEXT: The government should also put a freeze The US already has 11.1bn cubic feet per day
Depending on how on new project permitting in the US Lower 48 (115bn cubic metres per year) of LNG capacity
tight the market gets, states, and carry out a review into whether these in operation, and a further 87 bcm of approved
the government could initiatives are in the public interest, IECA said. projects that are already under construction.
impose some temporary “We are certain they are not,” it said. IECA is seeking a freeze on an additional 247
measures to stem LNG bcm of capacity that has been approved but is
exports. But significant Hurting other economic sectors not yet under construction, along with 31 bcm
changes in legislation are Many of IECA’s members are involved in the proposed with applications pending and 56.8
unlikely. US chemicals industry, which has long been an bcm still at the prefilling state.
advocate of free trade, seeking the removal of “Excessive LNG export volumes are inflation-
tariffs, subsidies and other barriers to trade that ary and threaten the competitiveness of trillions
have hindered the export of their products. But of dollars of manufacturing capital assets, mil-
at the same time, IECA’s members also rely on lions of jobs and economic growth by driving

P4 www. NEWSBASE .com Week 38 23•September•2021