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US Lawmakers: LNG Exports Are Hurting US Consumers

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High domestic gas prices are prompting US lawmakers to question anew whether LNG exports are causing more harm than good.

“We’re not as insulated from high prices in natural gas as we once were,” US Sen. Joe Manchin (D-West Virginia) said at a Senate Energy and Natural Resources Committee hearing Tuesday.

Manchin, a key swing vote in the Senate, pressed the acting administrator of the US Energy Information Administration, Stephen Nalley, on whether higher overseas gas prices were incentivizing more exports, affecting prices at home.

“Are we exporting more at the detriment of the US consumer, that we’re going to pay a higher price here so that companies we allow to export their products can make a higher profit overseas?” Manchin asked.

“Clearly it’s putting a burden on US businesses and homeowners,” Nalley said in the exchange.

A US manufacturers group, the Industrial Energy Consumers of America, a longtime opponent of US LNG exports, has begun a fresh push to have the US energy secretary intervene to reduce US LNG exports.

Policy Bulwarks

A Washington restriction on natural gas exports would pose an awkward diplomatic problem. For years, US officials of both political parties have argued that US natural gas production is a boon for global energy security, and that the US is a reliable supplier. US officials also strongly criticize Moscow’s control over Russian natural gas exports into Europe.

The Biden administration has already tried to reassure sensitive markets that Washington isn’t planning to change LNG policy. "There's a natural gas shortage around the world, hence the need for the US to continue to export natural gas," White House spokesperson Jen Psaki said in October.

The fracking boom in the US saw an overhaul of US energy trade practices, with restrictions on oil and gas exports eased during the Obama/Biden administration.

New Scrutiny?

Sen. Angus King (I-Maine) said he planned to introduce legislation requiring the government review the domestic gas pricing impacts of each new LNG export facility before granting approvals. The US Department of Energy has long done studies on the impact of additional exports, but it typically does them on incrementally higher levels of exports, rather than on a project-by-project basis.

Rising US LNG exports, as more facilities come on line, are “going to be a real problem in three or four or five years,” King said. The relatively low US natural gas prices amount to an economic advantage, King argued, that the US is giving away through exports.

“We are literally subsidizing Chinese manufacturing by sending them our natural gas,” he said. “We are racing blindly into the future and cutting off our significant economic advantage.”

“I agree wholeheartedly,” Manchin chimed in.

Export Defenders

But a handful of lawmakers, including Sen. James Lankford (R-Oklahoma) and Sen. John Hoeven (R-North Dakota), pushed back on the idea, arguing that with fewer markets to sell into, US investment in upstream natural gas would dwindle over time and gas consumers around the world would compete for a narrower set of resources.

“I think that would discourage more investment in the future,” Lankford said. “My perception of the markets is, as we’re developing more facilities to be able to export, we’re also developing more facilities here ... if that went away — with the extremely low price you’ve seen for years now — none of that investment would have occurred and we wouldn’t be well positioned to continue to provide for our own needs.”

Topics:
LNG Trade, Policy and Regulation
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