The US LNG export debate is analogous to what’s happening with US gasoline.
US LNG exports and the gasoline situation
By Joseph Chang on 26 February, 2013 in Economy and economics, Goverment/International Policy, Petrochemicals
Very interesting comment from Jim Cramer on CNBC’s Mad Money last night on US gasoline prices – that part of the reason they are high is because US refiners are choosing to export gasoline.
The US is producing much more oil from shale formations, and more gasoline. Yet local gasoline prices are high and rising, pinching consumers. Why? Partly because refiners are choosing to export that gasoline.
The US has moved from being a net importer of gasoline just a few years ago, to a net exporter.
Now you could say – listen, we have all this new oil from shale and more gasoline production. Why not keep it in the US to keep prices low for consumers? But it’s a free market. Refiners can sell into the local market OR export if they can get more money. The government can’t restrict gasoline exports in any way!
Chemical CEOs are trying to halt the building of LNG export facilities with the “public interest” provision in the Department of Energy’s remit for exports to non-FTA countries. But once they are built, there will be no way to restrict LNG exports – just the same as gasoline.
Also see Dow Chemical CEO Andrew Liveris’ op ed in the Wall Street Journal: http://online.wsj.com/article/SB10001424127887323495104578312612226007382.html
About Joseph Chang
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