Exporting Gas = Exporting Jobs

In 2011, for the first time in 62 years, the United States became a net exporter of oil products. To consumers who are watching their family budgets being crushed by rising gas prices, this is a shocking development.

American drivers are increasingly unhappy that the price of gas is fueling record profits for big oil companies, sending trillions to OPEC nations like Iran, and keeping an oil market casino open for Wall Street speculators. Now, Americans learn that their oil, produced on land paid for by their tax dollars, is being sold to China, Brazil and other nations so that big oil companies can make even more profits.

But ask an American manufacturer of steel, plastics, fertilizer, chemicals or other products about “gas prices” and they’ll flash a smile. That’s because they’re thinking about natural gas prices, which are hovering at 10-year lows. That’s because, unlike oil, natural gas is a domestic market, and America sets her own price.

Right now, America’s natural gas is about six times as cheap as it is in Asia and four times as cheap as Europe. That is a competitive advantage for U.S. companies, leading to an American manufacturing renaissance. Nearly 500,000 manufacturing jobs have returned to the U.S. in the last two years and cheap natural gas is a major reason why.

What’s the number one way this progress could be stopped? By exporting America’s natural gas.

The Department of Energy has already approved one export terminal, and has eight more under consideration. If all of these export terminals were approved and full export capacity utilized, the Energy Department says natural gas prices could rise by up to 54 percent. And those price increases are just the result of approvring the firsteight terminals. If subsequent export applications are approved, natural gas prices in the U.S. could go even higher.

Right now, major oil companies are also nearing agreement on a plan to send American natural gas from Alaska to China. So in addition to cheaper Chinese labor and predatory Chinese trade practices that put American manufacturers at a competitive disadvantage, Chinese companies would also have low-cost American energy. If China won’t give us their rare earths to put into our solar panels and cars, why should we send them our cheap natural gas? That would be a one-way ticket to manufacturing oblivion.

Oil and gas companies will claim that natural gas is getting too cheap to keep drilling. Yet as prices have dropped, natural gas production has risen and consumption has followed. In the first few months of this year, there was a nine percent increase in American production of natural gas compared to last year.

As a result of these low prices, utilities are switching from coal to cleaner burning natural gas, buses and trucks are switching from imported oil to domestic natural gas, and companies are building more factories in America. Heating with natural gas now costs half as much as heating with oil, which has led to nearly 500,000 households in the northeast to switch to natural gas for home heating in the last four years. These markets will continue to grow. Natural gas companies should focus more on gas exploration instead of consumer exploitation through exports.

I have introduced bills that would call for a “time out” on the exportation of America’s natural gas. Because if we go down this path and export America’s natural gas to foreign nations, I fear we will once again need to export American men and women abroad to deal with energy-related conflicts. We should keep America’s natural gas here in America, where it can benefit our industries and our consumers.

By: Rep. Ed Markey
Source: National Journal