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Letter on H.R. 6 opposing US natural gas exports

Hydrocarbon Engineering,

Below are extracts from the letter sent by the APGA to the US Committee on Energy and Commerce as they speak out against US natural gas and LNG exports.

‘The American Public Gas Association strongly opposes The Domestic Prosperity and Global Freedom Act, H.R. 6. Though well intentioned, this legislation will fail to achieve its desired purpose of reducing Ukraine and other Eastern European nations’ dependence on Russian natural gas and will increase the price of our domestic natural gas here at home hurting homeowners’ budgets and businesses’ bottom lines.’

‘H.R. 6 will not ensure that Ukraine or any other country that is heavily dependent upon Russian energy will ever receive US natural gas, much less receive it in a timely fashion. This is due to the fact that US LNG exports, which cannot occur until the necessary export facilities are constructed later in this decade, will be sold by private firms to the highest bidder without any consideration of US geopolitical interests. Natural gas exports will be sold wherever these firms can obtain the highest price. Exporting firms answer to dollars, not diplomats.’

‘Even in the unlikely event that the international market for natural gas dictated that the price is highest in Ukraine, LNG exports from the US would not arrive there for several years at the earliest, which is well beyond the necessary timeframe for assisting them during their current crisis. This is in part because Ukraine, unlike its likely Asian competitors, currently has no LNG import facilities or plans for such, and therefore no capacity to receive US gas in the near future. And the recent Russian takeover of the Crimean region on the Black Sea diminishes the likelihood that LNG import facilities will ever be built by Ukraine.’

‘There is an approach that accomplishes Representative Gardner’s well intentioned outcome without the various downsides and risks that are associated with H.R. 6. The US should be exporting the drilling technology that has enabled producers in our country to tap into our huge shale reserves. There are likewise vast shale reserves in Europe, including the Ukraine, assuming the World Trade Organisation (WTO) countries are willing to invest in the technology to access those reserves and also to permit drilling for shale gas reserves. There is certainly no good reason why the US should undertake a domestic LNG export policy that has numerous downsides for American gas consumers when many of the very countries we seek to help are capable of helping themselves by accessing their own domestic shale gas reserves.

‘In lieu of exporting our affordable premium fossil fuel, Congress should focus on adopting policies that encourage greater domestic demand for natural gas and greater emphasis on exporting drilling technology to WTO and other countries that have the capability to access natural gas reserves. It is a much better choice, in both the short and long term, to accelerate the transition in the US from imported oil to domestic natural gas to fuel our transportation sector, revitalise our manufacturing industry, and improve our balance of trade.’

Edited by Claira Lloyd

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