Some of the largest US chemical makers and manufacturers which include Dow Chemical Co., Alcoa Inc., Eastman Chemical, Dallas-based Celanese Corp., and others have formed a new group called as “America’s Energy Advantage” to oppose the unlimited natural gas exports.
Natural gas is an important resource for the United States. It can be used in power manufacturing plants and also used as a component in American-made plastics and chemicals sold across the globe, rather than exporting them as a raw material, according to “America’s Energy Advantage” members.
In US, five years ago, to satisfy the energy needs of the country hungry for fuels, large number of giant natural gas import terminals was built. But the terminals were a waste, because cheap domestic natural gas was produced from an unexpected drilling in new shale fields from Pennsylvania to Texas. Now, the same companies are proposing to spend around $80billion to convert them into terminals to export some of the nation’s extra gas to Asia and Europe, where gas is roughly triple the American price.
The shale gas boom in US is an advantage to the country, since the manufacturing industrial sector uses 40% of US natural gas. But, the unlimited natural gas export will raise the prices of the gas dramatically and would in turn badly affect both the industry as well as the country’s economy, according to George Biltz; vice president of Dow Chemical Co. He also added that 5 billion cubic feet a day in total exports by 2025 could be tolerated.
But, according to the US Energy Department, the natural gas export would be a good business and also benefits the US by selling around 22.6 billion cubic feet of natural gas per day to countries that do not have free-trade agreements with the United States.
Unlimited exports would be a benefit to the country with $47 billion new economic activity. But, the main disadvantage is the increase of natural gas price due to the export which would severally affect the companies that are big users of energy produced by burning natural gas or are heavily reliant on the fossil fuel as a building block for producing chemicals, fertilizers and other products, according to a government-commissioned study.
The members of America’s Energy Advantage are united in opposing unlimited natural gas exports, but have not covered other issues such sustenance of domestic production and industrial growth.
Hence, it is termed as a short- sighted campaign with only few industrial users restricting the exports in an attempt to control prices, according to Jack Gerard, president of American Petroleum Institute. He also said that, the newfound abundance of natural gas resources is a an added advantage to all domestic manufacturing of US, since, they bring in lower energy costs, lower costs on raw materials and reduced heating bills. He also added that, restricting exports of energy as a ‘strategic resource’ makes no sense, and is therefore considered similar to unnecessary restriction of the export of chemicals, agriculture products or cars.