Energy

Part Of Trump’s ‘Energy Dominance’ Plan Faces Resistance From Big Manufacturers

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Michael Bastasch Contributor
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A coalition of manufacturing corporations have challenged a core message of the White House’s “Energy Week” theme — making the U.S. a major natural gas exporter.

President Donald Trump wants to boost energy trade with developing countries, like India, that are hungry for U.S. shale gas. Big, energy-intensive manufacturers, however, oppose increased gas exports. His ultimate goal is U.S. “energy dominance.”

The Industrial Energy Consumers of America (IECA) sent a letter to Energy Secretary Rick Perry and Commerce Secretary Wilbur Ross Wednesday, arguing that exporting natural gas abroad “poses a significant long-term threat” to manufacturing.

IRECA represents large chemical, metal, paper, glass and cement manufacturers. These companies have been able to take advantage of cheap natural gas resulting from the fracking-induced energy boom.

The group has asked the Trump administration to halt approving liquefied natural gas (LNG) export agreement to countries the U.S. does not already have a free trade agreement with, like India.

“President Trump has clearly articulated a fair trade and ‘America First’ policy,” IRECA President told The Washington Post.

“I believe when he is confronted with the facts,” Cicio said, “he will support what we are recommending.”

IRECA’s opposition to gas exports isn’t surprising. IRECA members Dow Chemical Company, steel producer Nucor and aluminum producer Alcoa have opposed approving LNG exports for years now. They argue exports would raise gas prices and hurt manufacturing.

IRECA wrote that “utilizing natural gas in manufacturing, as compared to exporting it, creates eight times more jobs,” in their letter to the Trump administration.

Trump met with Indian Prime Minister Narendra Modi Monday to discuss increasing U.S. energy exports. Trump said he is “trying to get the price up a little bit” by approving more natural gas exports.

Higher prices isn’t good for manufacturers or consumers, but it’s great news for natural gas producers who will likely increase output. That could mean more jobs in the gas fields.

Exporting natural gas would likely raise domestic prices while simultaneously lowering international prices — gas tends to be much more expensive in countries that don’t have vast shale resources.

A 2015 Energy Department study on the effects of exporting LNG found the “[n]egative impacts in energy‐intensive sectors are offset by positive impacts elsewhere.”

The U.S. is already selling record amounts of natural gas to Mexico and the Middle East, and more shipments are expected to head to Asia in the coming years, especially Japan. India already has several agreements with U.S. companies to buy LNG.

Experts say the U.S. could become the world’s largest natural gas exporter by 2035, but that could happen sooner if Trump ramps up approval of LNG terminals and global economic growth picks up.

“India is one of the few large LNG importing countries that we estimate still has a decent amount of un-contracted demand in the coming years,” Anastacia Dialynas, an energy analyst at Bloomberg New Energy Finance, told Bloomberg.

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