|Rank||Top 10 US Exports, 2012||Millions|
|1||Automotive vehicles, parts, and engines||$145,992|
|2||Fuel oil and Petroleum Products||$117,134|
|5||Industrial machines, other||$46,128|
As a US-based corporation, Dow Chemical benefits significantly from international trade and globalization. In 2011, more than two-thirds of the company’s $60 billion in global sales were in foreign markets, and roughly half of its assets and employees were outside the US. The US chemical industry’s exports last year of $83.5 billion ranked as America’s third largest export category, as Dow and other US chemical companies took advantage of global demand for their products (see table above). The second largest export category in 2012 was America’s petroleum-based products like jet fuel, kerosene and heating oil, which were exported at record-high levels last year, thanks to America’s new energy abundance of shale resources.
With booming export markets for America’s chemical and energy products, and with Dow Chemical being a shining example of an American company reaping significant benefits from export markets and globalization, you would think that Dow would naturally support other American companies that could likewise benefit from exports markets and global trade. Or even if it didn’t publicly support other companies taking advantage of export markets, you wouldn’t think that Dow would publicly oppose the attempts by other companies to have access to the same foreign markets that Dow enjoys, would you? Well, think again.
As the WSJ points out today, companies like Dow claim to “love American exports” but are selfishly engaged in rent-seeking because they now “hate certain American exports,” like America’s abundant natural gas, when those exports might affect Dow and their allies’ bottom lines, here’s an excerpt:
Everyone loves American exports, or at least claims to, so it’s worth highlighting the big business lobbying underway to limit the export of U.S. natural gas. Couched in the usual language about “energy security” and domestic jobs, the effort is as pure a special-interest play as you’ll find.
The lobbying goes under the flag of America’s Energy Advantage (MP: Or more accurately America’s Energy Advantage for Some Big Chemical, Steel and Aluminum Companies Using Other Companies’ Natural Gas), which is led by Dow Chemical, with an assist from the likes of steel and aluminum producers. Now that America’s shale-gas boom has reduced the domestic price of natural gas—which manufacturers use as a feedstock and to power their plants—these companies want the Obama Administration to limit or block exports of liquefied natural gas.
Specifically, they want the White House to limit the number of LNG export terminals. The U.S. currently exports no LNG, although 16 proposed facilities are seeking Department of Energy approval. A December report commissioned by the Energy Department found that exports would provide net economic benefits in more jobs, tax revenue and investment.
Dow Vice President George Blitz tells us the company is “pro-free-trade” and is simply looking for the “sweet spot” in the export market. He means sweet for Dow but sour for everyone else. Dow recently withdrew in a huff from the National Association of Manufacturers because NAM to its credit continues to support gas exports. The American Chemistry Council is also sticking to its free-trade principles on exports.
The last thing American business needs is politicians deciding when and where companies can sell their goods. U.S. gas supplies are vast, and production was increasing so rapidly a year ago that prices fell to $2 due in large part to an unusually warm winter. If demand for U.S. LNG takes off, natural gas prices will rise, which will lead to more production.
The plea from Dow and friends for government limits on exports is short-sighted—and embarrassing.
MP: The US is already exporting chemicals and petroleum products at record levels. For Dow and other companies to suddenly and selectively object to exports of natural gas seems disingenuous and embarrassing, as the WSJ points out. Dow and its allies apparently don’t want limits on chemical exports, and aren’t calling for limits on hydrocarbon fuels like fuel oil and the other petroleum products that are selling overseas at record levels. To selectively call for limits ONLY on exports of natural gas clearly exposes Dow, Nucor and Alcoa as self-interested rent-seekers deserving of a gold medal. It’s truly shameful that companies like Dow are now wastefully spending resources to make the case that they are somehow entitled to the abundant natural resources that other US companies extracted from miles below the ground, that they didn’t invest a penny of their own capital to produce, and that they didn’t employ a single worker to develop.