Natural Gas Exports: Remove Government Barriers

COMMENTARY Energy Economics

Natural Gas Exports: Remove Government Barriers

Jun 17th, 2013 2 min read

Former Jay Van Andel Senior Policy Analyst in Trade Policy

Bryan served as an advocate for free trade through his research at The Heritage Foundation.

A June 18 House Energy and Commerce Committee hearing will focus on the future of liquefied natural gas (LNG) exports.

Currently, the U.S. can freely export LNG to another country only if it has a free trade agreement with that country. Requests to export to the rest of the world must be approved by the Department of Energy (DOE) on a case-by-case basis. This results in costly delays.

Other energy-producing countries are big fans of the restrictive U.S. policy. As American producers wait for DOE approval to export LNG, Canada is building a $16 billion terminal to export LNG to Japan and other countries.

Some groups argue that the government should block LNG exports to reduce U.S. energy prices. This is like arguing that the government should prohibit farmers from exporting grain in order to reduce U.S. food prices.

In reality, there is no such thing as “American” LNG any more than there is “American” grain. Our energy and food producers don’t operate in North Korea, where everything is owned by the state. In the U.S. we have privately produced energy, grain, and other products. Allowing those private producers to sell to anyone they want fits best with U.S. constitutional values.

We can do better. Legislation has been introduced to remove restrictions on LNG exports to Japan and our NATO allies. A more far-reaching option would be to treat LNG like all other U.S. exports by removing the DOE’s authority to derail them.

This piece originally appeared in The Daily Signal