New Report Raises Concerns that Energy Export Delays Could Violate Trade Agreements

December 4, 2013

The National Association of Manufacturers this week released a new report which found the Obama administration’s “unreasonable” delays in approving export projects for liquefied natural gas (LNG) and coal could conflict with World Trade Organization (WTO) agreements. A key provision of the WTO agreements bans certain export restrictions, and the report, authored by former WTO Appellate Body Chairman and former Democratic member of the House James Bacchus, concluded, “the implementation of U.S. rules in ways that unnecessarily impede exports of LNG and coal likely violate WTO trade rules.”

Through his analysis, Bacchus found, “In the case of LNG, the chief obstacle confronting export projects is a federal determination of whether the export of gas is consistent with the ‘public interest’—an ambiguous and discretionary threshold. In the case of coal, federal law imposes no significant restrictions on the export of coal itself; however, coal export projects are confronting delays related to analysis of their potential environmental impacts. In both instances, the implementation of U.S. laws and related delays in licensing and permitting are impeding these projects and risk running afoul of our international obligations under the WTO.”

NAM’s study shines a new light on the regulatory barriers blocking the export of American coal and natural gas. The Energy and Power Subcommittee has been examining barriers to exports and the need for updated policies as America enters a new age of energy abundance. The subcommittee has heard from market analysts, American manufacturers, and foreign leaders about the tremendous benefits U.S. energy exports could bring to our domestic economy and around the globe.

NAM and other stakeholders have urged the federal government to allow the free market to govern exports rather than distorting legal and regulatory barriers. House Energy and Commerce Committee Chairman Fred Upton (R-MI) stated previously at a hearing, “The cumbersome federal approval process is out of step with where we are as an energy-producing nation today. … The private sector has made rapid progress in unlocking our energy abundance. What the American people now need is a regulatory process that can keep up with this evolving energy landscape.”