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Environment

Gas Surplus Sparks Dispute

Resources: Senate hears differing views on how to develop, protect natural gas supplies

by Jeff Johnson
February 18, 2013 | A version of this story appeared in Volume 91, Issue 7

Gerard
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Credit: ACC
Jack N. Gerard, head of the American Petroleum Institute.
Credit: ACC

Evolving U.S. natural gas policies fueled by the nation’s new bounty from advanced hydraulic fracturing technologies drove a heated three-hour-long Senate hearing last week.

Witness after witness at the Energy & Natural Resources Committee hearing heralded the recent flood of natural gas from fracking as “a once-in-a-lifetime opportunity” and discussed policy options to encourage development of this resource. Driving the committee’s interest is an ongoing Department of Energy examination of proposals for some 20 terminals to liquefy natural gas, allowing export to global buyers.

Jack N. Gerard, head of the American Petroleum Institute, urged minimal government restraints, saying natural gas production from fracking supports some 1.7 million U.S. jobs, with more planned for the future.

Dow Chemical CEO Andrew N. Liveris also stressed jobs and income from the new surge of gas production. But he urged caution on exports and worried about harming a “manufacturing renaissance” in the U.S. springing from the cheap and abundant gas. A Dow study says more than 100 new U.S. chemical industry projects and $95 billion in new investments are attributable to the gas. Dow itself is investing $4 billion in new U.S. facilities, Liveris said.

Liveris
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Credit: Peter Cutts Photography
Andrew Liveris, Dow chairman and CEO.
Credit: Peter Cutts Photography

Natural gas exports have driven a wedge between different industry segments. Liveris called for a careful examination of how much gas should be available for export. He fears the price of U.S. gas might skyrocket and match global prices if much of the fuel is sent abroad, curbing the energy-cost advantages U.S. chemical firms and other manufacturers now enjoy in the global market.

Liveris and some other chemical company executives have taken issue with industry groups that want to ramp up liquefied natural gas exports, including the American Chemistry Council, a chemical industry trade association of which Dow is a member.

ACC recently noted the difference of opinion between some of its member firms and announced on Feb. 6 a new senior-level committee to discuss natural gas exports and determine whether consensus can be reached.

Conflicts coming from the gas bonanza were also stressed by Committee Chairman Ron Wyden (D-Ore.) at the Senate hearing, who said it was “time for a fresh look” at current natural gas policies and time to update them to match new conditions.

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