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Unchecked LNG Exports Harm U.S. Consumers and Businesses

Dave Schryver, Executive Vice President, American Public Gas Association

Dr. Economides' February 27th article that appeared in Energy Tribune titled, "Hands Off: Why the Free Market Should Control the Valve to US Natural Gas Exports," (February 27, 2013) gets the facts wrong and is more than moderately misleading. As representatives of non-profit, publicly-owned gas distribution systems nationwide and their consumers, as well as a proud member of America's Energy Advantage (AEA), the American Public Gas Association (APGA) feels compelled to set the record straight.

Despite making passing reference to AEA and some of its members, throughout his article Dr. Economides chooses to narrow the universe of those who have serious concerns about exporting a substantial percentage of our daily natural gas production to only the Dow Chemical Company. His narrative of "the free market" vs. Dow is inaccurate since the reality is that Dow is far from being alone in opposing unchecked LNG export and actually supports the export of LNG.

Dr. Economides ignores AEA's growing membership base, which currently consists of Alcoa Inc., APGA, Celanese, Dow, Eastman, Huntsman, and Nucor. Simply put, AEA is diverse and growing, as other companies are starting to realize the potential and far-ranging adverse impacts of unchecked LNG exports.

While APGA and its members are not involved in international trade, AEA is pro-free trade and is not the archetypal, self-interested proponent of a "command and control" system that Dr. Economides implies in his writing. AEA supports a policy of exporting LNG that appropriately takes into account the needs of domestic consumers, manufacturers, and our country's continuing quest for energy independence.

If the U.S. pursues a policy of unchecked LNG exports, the consequences, in our view, will be harmful for consumers and businesses. The affordable and stable natural gas prices currently enjoyed by consumers in the U.S. are a product of newfound shale gas resources and the fact that the market is largely limited to North America.

LNG exporters understandably want to arbitrage the low U.S. prices in the international market and make huge profits. The problem is that while this will produce revenues and jobs in the natural gas sector, it will, as the NERA Economic Consulting study on exports concluded, hurt virtually every other sector of our economy, including agriculture, energy-intensive sectors, electricity, natural gas consumers, motor vehicles, manufacturing, refined oil products, and services as they all experience declines in wage income, capital investment, and employment. AEA believes that the U.S. will be better served by pursuing a balanced LNG export policy which recognizes the needs of domestic consumers of all types, as well as those of producers and exporters.

Unfortunately, rather than engage in an intelligent debate about the pros and cons of unchecked LNG exports, Dr. Economides chooses to try to win the debate not on the merits but rather by demonizing individual members of AEA. AEA believes that exports of LNG are not a zero sum game. We are confident that when the Department of Energy (DOE) conducts its "national interest" determination, as required by the Natural Gas Act, it will find that consumers, businesses, and the larger national economy will be better served by a balanced policy of LNG exports. But, whichever way DOE leans, we trust the Department will be wise enough to look past the sound and fury of Dr. Economides.