Get Ready for Higher Prices Our Natural Gas Reserves Are Being Plundered For Export

[xchrom]

http://www.alternet.org/fracking/get-ready-higher-prices-and-less-energy-security-our-natural-gas-reserves-are-being



Unlimited export of U.S. natural gas would have enormous implications on the future of the nation's economy, environment and domestic energy choices. Yet a burgeoning chorus in Congress, on both sides of the aisle, is calling for the swift approval of 19 liquid natural gas (LNG) export permits.

The acceptance of these permits would unleash an unprecedented frenzy of domestic high-volume hydraulic fracturing, or fracking, just to meet daily production rates under decades-long contractual obligations. If accepted, the total of the permits currently under review by the Department of Energy for LNG export would be equal to 28.54 billion cubic feet (Bcf) per day, approximately 45 percent of what the U.S. is projected to consume daily in 2013, according to the U.S. Energy Administration.

Congressional supporters of unlimited exports argue that turning the U.S. into a major net exporter of LNG would not only boost our economy and create jobs, but also -- seeming to defy the basic tenets of supply and demand -- sustain low domestic natural gas prices, increase our energy security and propel us to energy independence. Some have even contended that such exports would smooth out boom-and-bust cycles and stabilize the price of natural gas.

By law, the Natural Gas Act requires the Department of Energy to grant export permits of LNG to non-free trade agreement countries only if such exports are deemed in the public interest. LNG exports to countries the U.S. has free-trade agreements with, such as Canada and Mexico, do not require a public interest determination.

[leveymg]

1. LPG and crude exports are the point of the Keystone Pipeline deal. We'll be sorry, but it'll make

those who own the tar sand fields and pipelines many more billions if they can sell to the growing world market (particularly China).

[marmar]

2. The pathological pursuit of profit.

nt

[JCMach1]

3. Nationalize the US oil industry

it's way past time...

[xchrom]

4. +1

[pampango]

8. That may be good policy but I'm not sure it would reduce exports of oil and natural gas.

There are several countries that have nationalized their oil and gas industries. Perhaps there is evidence that they export less of them as a result and I just have not seen it.

One could make the case that if the government owns the oil and gas in the ground, it would have a self interest in developing and exporting them to generate revenue for itself. That what several oil-exporting countries that have nationalized their oil industry, seem to do.

[JCMach1]

10. those countries don't use as much as we do...

[pampango]

11. Certainly true, but neither do they prove that nationalization necessarily reduces oil/gas

production and exports. Those countries do not need to produce that much gas/oil for their domestic needs since they don't use as much as we do, but governments (big and small) want the income that goes with increased production and exports.

[bahrbearian]

9. +2

[1-Old-Man]

5. I think the article creates then overstates a nonexistant problem

Its hard to even decide where to begin, but lets start with this, there is only one port in the US that is capable of supporting this export trade and it has extremely limited capacity. Fear of explosion has stopped other ports from setting up for this trade. Interestingly enough in recent years we have exported nearly exactly as much LNG as we imported and the ships that transport the liquid/gas actually use the clean burning cargo to power themselves; one of the LNG tankers will typically burn about 3% of its cargo during an Atlantic crossing.

[Laelth]

6. Informative post. Thanks. n/t

-Laelth

[PETRUS]

7. The generalize resource curse

I read this on interfluidity just moments before finding your post:

A useful way to understand the pickle we’re in, I think, is that we are suffering from the so-called “resource curse”. If you are unfamiliar with the phrase, “resource curse” refers to the regularity with which countries “blessed” with abundant natural resources end up as dystopian polities with dysfunctional economies. Nigeria has a lot of oil but no one wants to live there.

The resource curse is pretty easy to understand. It’s not associated with just any sort of natural resource. Switzerland has beautiful mountains and stuff that people would pay a lot of money for, but it is still well-governed. Accursed resources are of a very particular type. They are valuable tradable goods the extraction of which requires a small numbers of workers relative to the size of the economy as a whole. [*] Goods like this create a very strong tension between private property and social welfare. In the mythology of capitalist economics, “as if by an invisible hand”, the self-interested pursuit of private wealth promotes the general welfare precisely because we all require one another’s help. The butcher slaughters her beasts and the baker sugars his cakes, each with an eye to their own profit. But the butcher needs her carbs and the baker likes his meat, so the end result of their self-interested selling is mutual aid rather than mere accumulation.

This logic breaks down in an economy dominated by a valuable natural resource. Yes, the miners require meat and mead, but if they are small in number relative to the rest of the population, that won’t cost them very much. They are few mouths to feed, and the not-miners are many and lack bargaining power. What makes happy capitalism work, the silent tendon of the mythologized hand, is a kind of balance between individuals’ desire to accumulate and their need for the assistance of others. If there exists a very valuable natural resource, and if that resource can be privately controlled, there is no balance. Self-interested agents drop their butchering and bakering, and try to gain control of the resource. No magic force turns that into a positive sum game. Unless there are “very strong institutions” — whatever that might mean — the pursuit of wealth becomes a game with winners and losers. The invisible hand can manage no more than to lift a middle finger...

(More here: http://www.interfluidity.com/v2/4340.html)