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Gas Exports Turn Contentious

Energy: Chemical makers’ opposition to natural gas exports splits the business community

by Alexander H. Tullo
January 28, 2013 | A version of this story appeared in Volume 91, Issue 4

Credit: Center for Liquefied Natural Gas
Chemical executives worry that LNG tankers will carry away their competitive advantage.
The 283 meter LNG ship Methane Rita Andrea at sea. The hull is similar in appearance to a cruise ship, but it has a large orange structure festooned with pipes instead of cabins.
Credit: Center for Liquefied Natural Gas
Chemical executives worry that LNG tankers will carry away their competitive advantage.

A growing number of chemical makers are arguing that newly abundant natural gas extracted from shale in the U.S. should be used to spur manufacturing growth at home instead of being sent overseas.

The largest U.S. chemical company, Dow Chemical, has left the National Association of Manufacturers (NAM) over that group’s support of liquified natural gas (LNG) exports. Dow also has called on the carpet the American Chemistry Council (ACC), a leading trade association, for its views on the matter. Several chemical firms, meanwhile, have joined a new coalition, America’s Energy Advantage, that is opposed to unlimited LNG exports.

Recently, U.S. petrochemical makers have enjoyed an advantage over foreign competitors thanks to the low price of natural gas from shale. More than 20 natural gas export facilities are now being proposed in the U.S. If the units go into operation, some chemical executives fear that domestic natural gas prices will rise, undermining their firms’ competitiveness.

However, NAM and ACC haven’t held this position. “If the U.S. were to go down the path of export restrictions, even more countries would quickly follow suit and could easily limit U.S. access to other key natural resources,” NAM wrote on its blog earlier this month. “We would oppose legislation that attempts to restrict exports of natural gas,” ACC said last year.

Dow will not confirm rumors that it is threatening to bolt from ACC as well, although the firm tells C&EN that it will “take whatever action seems most appropriate.”

ACC appears to be recalculating, saying it has “plans to further discuss this issue to ensure that the views of all members are fully represented and the implications fully understood.” ACC refers to Dow as one of its “highly respected members.”

America’s Energy Advantage includes chemical makers Dow, Celanese, Eastman Chemical, and, most recently, Huntsman Corp. “Completely unfettered U.S. exports may enrich a few LNG exporters in the short term,” says Huntsman CEO Peter R. Huntsman, “but real, sustained, and broad-based growth in the U.S. economy will come from a balanced approach.”



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