Witnesses Explain that Economic Growth and Geopolitical Gains are Reason Enough to Allow LNG Exports
WASHINGTON, DC – The House Energy and Commerce Subcommittee on Energy and Power, chaired by Rep. Ed Whitfield (R-KY), today examined the impacts that exporting U.S. energy resources, particularly Liquefied Natural Gas (LNG), could have both here and abroad. Only a short time ago, the United Sates was facing a shortage of natural gas supplies, but thanks to private-sector innovation and new technologies, the U.S. is now the top natural gas producing nation in the world. This energy renaissance has created thousands of American jobs, lowered energy prices, and opened opportunities to increase our energy exports. Members discussed both the economic and geopolitical benefits related to LNG exports, including job creation, reducing the trade deficit, and shifting global power balances resulting from increased energy availability.
“America’s energy abundance is creating employment opportunities and growth at a time when little else in the economy is going as well – and that alone is enough reason to support domestic energy production. But while this energy abundance is a source of jobs at home, it can also be a force for good around the world.” said Chairman Whitfield. “Instead of being beholden to energy exporting nations, we are fast becoming one ourselves.”
“America’s natural gas boom is creating competitive opportunities domestically for manufacturing and technology as well as international opportunities to help our allies reduce their reliance on geopolitically unstable regions of the world,” added Energy and Commerce Committee Chairman Fred Upton (R-MI).
Mike Halleck, President of the Columbiana County Board of Commissioners, offered a local perspective of the economic benefit increased energy production has had on eastern Ohio, stating, “In a few short years, there have been over 7 billion dollars invested in our area. Over 39,000 jobs created with projections of 143k by 2020 and 266k by 2035. During 2012 the average wage in Ohio was 55k, while the wages for the oil and gas industry average was 81K.” Halleck argued that allowing the export of U.S. natural gas will allow this domestic production and job creation to continue to thrive, explaining, “While the lower prices are welcome domestically, we should not in my view make the prices so cheap through too much supply that we force the producers to lower production. Better yet, why not pursue exportation to countries that we have open trade with. It would seem to me that not only would this stabilize prices, but give the United States a different standing in the world and make a statement of energy independence.”
Amy Myers Jaffe of the University of California, Davis, outlined the implications of increased U.S. energy exports on America’s global standing. She said, “U.S. energy trade in particular can enhance American power and influence by strengthening our ties to important allies and trading partners and allowing us to help our allies in times of market instability while at the same time weakening the petro-power of some of our adversaries such as Iran and Russia. Additionally, by improving our balance of trade, energy exports not only give the United States an upper hand with China, which will be more highly dependent on foreign oil imports than we will, but also allow the United States the luxury to augment its strong influence as a donor to global institutions.”
Former Senators J. Bennett Johnston (D-LA) and Byron Dorgan (D-ND) also explained that the abundance of natural gas in the United States is a resource that this country can and should use to its advantage and suggested that the free market should make the decisions about energy prices and exports.
“The free market might not always lead to everyone’s definition of the sweet spot, but experience has shown that it is a better allocator and regulator than bureaucrats and politicians. We should heed the admonition of Adam Smith that demand begets supply: Allow the free market to allocate the nation’s newfound energy bounty,” said Johnston.
“We believe the market should make the decision about the exports of natural gas,” added Dorgan. “I think it’s far more likely that domestic prices will affect exports, than it is that exports will affect domestic prices.”
Whitfield concluded, “The real risk is if the U.S. does not take advantage of energy export opportunities. Failure to do so would be a lost opportunity, both economically and geopolitically. Increased production and trade in American energy benefits both our economy at home and our standing around the world.”