That sage advice for the president and Dow Chemical comes from an editorial in the current edition of The Economist (emphasis added)
On America’s Gulf coast, massive industrial facilities stand idle. Miles of twisting stainless-steel pipes and huge storage tanks gleam uselessly in the sun. They are a reminder of the hundreds of billions of dollars that America has invested in terminals for handling imports of liquefied natural gas. Thanks to the boom in domestic shale gas, those imports are no longer needed. America produces nearly as much gas as it consumes, and will soon produce far more.
So the obvious thing to do with those idle terminals is to re-engineer them to handle exports. Instead of receiving shiploads of liquefied gas and re-gasifying it, they should be taking American gas, liquefying it and loading it onto tankers.
In America gas sells for around $3.40 per million British thermal units (mBTU). In Europe it costs around $12 and in gas-poor Asia it goes for as much as $20 per mBTU. Since it costs roughly $5 per mBTU to liquefy the stuff, ship it and turn it back into gas, America could be making a fortune from gas exports. To the extent that such exports displaced dirty coal, they would also help curb global warming.
The vocal lobby against gas exports unites environmentalists who object to fracking and many energy-hungry American corporations. They fret that allowing exports will raise gas prices for domestic consumers - like themselves, for instance.
Both groups’ objections are unconvincing. Greens claim that fracking pollutes the air and groundwater, but the evidence suggests that any such pollution is limited. Energy-hungry firms, such as those that operate gas-fired power stations or smelt aluminum, fear that higher domestic gas prices would hobble the revival of American manufacturing. Firms that both guzzle energy and use gas as a feedstock, such as Dow Chemical, are especially worried. But Mr. Obama should rebuff them, for two reasons.
The first is moral. Gas-guzzling corporations want to prevent the owners of the gas from selling it to the highest bidder. That is like lobbying the government to force your neighbor to sell you his house at a discount, rather than sell it to somebody else. It is pure rent-seeking, and should be resisted.
The second reason is economic. Gas prices in America are unsustainably low, and will eventually rise a bit whether exports are allowed or not. However, they will remain much lower than elsewhere, because other countries have failed to frack as deftly as America. If Mr. Obama prevents companies from exporting American gas, it will be left in the ground. The world will be a dirtier place, and America a poorer one.
MP: Kudos to The Economist for exposing Dow Chemical and its partners in the anti-export lobbying organization “America’s Energy Advantage for Some Big Chemical and Steel Companies Using Other Companies’ Natural Gas,” for their self-interested rent-seeking activities that would benefit Big Chemical and Big Steel, but would make America poorer and the world dirtier.