A bi-partisan group of 22 American senators have expressed reservation on the export of natural gas to Asian countries such as India and China, arguing that such a move by Obama Administration would result in an increase in cost for consumers and businesses at home.
“Natural gas prices in Asia are currently three to four times higher than those in the U.S. Integration of U.S. and Asian natural gas markets through U.S. exports could lead to further increases in prices for American consumers and businesses, which may fundamentally reverse many of the economic benefits that have led to the current surge in manufacturing job growth in the U.S.,” the senators said in a letter to Mr. Obama.
They said the “large-scale exports of natural gas to Asia could also jeopardize America’s goal of achieving energy independence, a goal made more achievable by the recent increase in domestic gas production”.
The senators urged Mr. Obama to consider the impacts on American manufacturing and families that rely on natural gas.
In the letter released to the press on Friday, they pointed to the hundreds of thousands of American manufacturing jobs created in the last few years, in part because of low natural gas prices.
“Thanks in part to lower natural gas prices, America’s manufacturing sector has created more than 600,000 jobs since 2010. The Boston Consulting Group study concluded that affordable natural gas prices could lead to 5 million more manufacturing jobs by the end of the decade.
“We must ensure that we do not squander what is clearly an American competitive advantage right now for American manufacturers and for the American economy,” the senators group said.
The senators said that the recent approval for export of liquefied natural gas from a sixth export facility has meant that the total approved exports now exceed the amount of gas currently being used in every single American home and commercial business. This could lead to what the Department of Energy study in 2012 indicated that domestic prices could increase by up to 54 per cent, the senators said, adding that it would translate into more than $60 billion a year in higher energy costs for American consumers and businesses, they said.