Friday, January 11, 2013

Gas Users Form Alliance Against LNG Export

A number of domestic big natural gas customers have formed a new lobbying alliance called America's Energy Advantage to convince the public and federal decision makers to put the brakes on the export of liquefied natural gas (LNG).  The campaign, complete with slick web site, promises to "educate policy makers" on their argument against the export of natural gas.

Yay!  Another milquetoast-named lobbying group channeling buckets of money into PR and lobbying, just what I was hoping for in the new year.

The promised lobbying battle pits chemical manufacturers against oil and gas producers, which promises to be a battle of heavyweights.  I'll be interested in seeing the specifics of their arguments, but I can smell the hypocrisy from here.  Sounds like a bunch of big businesses asking the government to deny LNG export so the chemical manufacturers can keep their costs low and profitability high, all under the guise of job creation.  But in doing so they are asking the government to override the free market economy that makes our country great.

Ultimately, I think the LNG export market will be self-limiting, as rising prices will lead to increased production and reduced demand from utilities, thus undercutting some of the advantages of U.S. LNG.  Also, investors will have only so much appetite for the multi-billion dollar price tags for these facilities, so even if all of the applications are approved, only a handful will be constructed.

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