Special Interests Trying To Stop Natural Gas Exports

One of the outgrowths of increasing federal regulatory powers is the tendency of some large companies to use the government to restrict competition and make themselves better off at the expense of other Americans.  The latest companies working to use the government to restrict competition and enrich themselves are Alcoa, Celanese Corporation, Dow Chemical, Eastman Chemical, Huntsman Corp., and Nucor Steel.

These companies, along with American Public Gas Association, have created a new organization called America’s Energy Advantage. The purpose of America’s Energy Advantage is to limit U.S. exports of natural gas. As America’s Energy Advantage’s website explains it, they believe in “[c]arefully considering the economic consequences before allowing unfettered natural gas exports.” They also want the federal government “to move cautiously on permitting natural gas exports.”

These groups want to limit free trade, but they do not want to appear to be anti-free trade. Instead they claim they want “[r]ules-based free trade and living up to trade commitments made under the World Trade Organization.” The reality is that they only bring up free trade to distract from the fact that limiting free trade is their goal.

Free trade in natural gas may lead to slightly higher natural gas prices, but the reality is that the U.S. is currently enjoyedhistorically-low natural gas prices as a result of a boom in production caused by hydraulic fracturing. In 2012, the average spot price of natural gas was less than $3 per MMBtu compared to over $6 per MMBtu a few years ago, with spikes over $10 per MMBtu.

There is nothing wrong with these companies wanting low-cost inputs, but what is terribly wrong is their desire to keep the price of natural gas artificially low through government actions to restrict trade by limiting customers for the natural gas. By doing so, the companies that make up America’s Energy Advantage would have lower costs but would benefit at the expense of those whose business it is to produce natural gas. Moreover, by advocating for government policies that limit consumption by competitors, they may in fact be producing higher natural gas prices for themselves and all consumers in the future.  In their pursuit of policies they think might keep gas prices low, they may succeed in destroying their own businesses and investments by causing gas prices to skyrocket.

Read more at the Institute for Energy Research. By Daniel Simmons.

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Comments

  1. When are we going to have a special interest group that really interested in AMERICA ?

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