Carpe Diem

In 2011, some US chemical companies supported market forces for natural gas, but now want government intervention

In 2011, Congress was considering legislation that would encourage more natural gas-powered vehicles on American roads by providing various subsidies for the production and use of natural gas-powered vehicles. In response, a group of American manufacturers, chemical companies and agricultural organizations sent this letter to the House leadership expressing their strong opposition to bipartisan legislation that was being considered then - the “Natural Gas Act” (H.R. 1380) – which would have provided subsidies for natural gas vehicles.

In the first paragraph of the letter, the signers “urged Congress to allow the market to set supply and demand for natural gas instead of picking ‘winners’ and ‘losers’ through legislation.”

Some of the companies that signed that letter in 2011 are now members of America’s Energy Advantage, which is now asking for exactly the opposite treatment from Congress when it comes to natural gas exports.

According to its website, America’s Energy Advantage believes in:

1. Carefully considering the economic consequences before allowing unfettered natural gas exports.

2. Encouraging the federal government to move cautiously on permitting natural gas exports in order to measure impact on price, security and jobs.

3. Educate policymakers on the potential risks to the U.S. economy of unfettered natural gas exports.

Bottom Line: It now appears that some of the companies that signed the letter in 2011 supporting market forces and opposing government intervention in the natural gas market are now asking for Congress to circumvent the market for natural gas and pick winners and losers through government policy by restricting or limiting natural gas exports.

Flip-flop?

6 thoughts on “In 2011, some US chemical companies supported market forces for natural gas, but now want government intervention

  1. Not a flip-flop at all. In the first letter they are discouraging the use of natural gas in vehicles so that increased demand doesn’t raise the price of their raw materials.

    In the second they’re discouraging the export of natural gas so that reduced domestic supply doesn’t raise the price of their raw materials.

    The words are different, their intent is still the same.

    • The whole point is that their intent was the same in both instances but that they argued the opposite side of free markets depending on the situation. Very hypocritical to support free trade and be against government intervention when the government action is against your interest, but then asknfor government intervention at a later date because you want the government to intervene in the market to help your interests.

      This case of the chemical companies lobbying the government is a perfect example of why government should not be involved in the markets. If governments do not meddle in markets then these companies would not lobby for self serving government intervention and the markets would determine the best outcome for the consumer.

      As it stands now, the companies with the best lobbying effort and/or deepest pockets can buy the most effective government intervention to promote that company’s own interest. Invariably that government intervention leads to a much less efficient outcome than the free market would have created.

  2. I am shocked—shocked!—that American chemical companies put profits before ethics.

    Shocked!

    Well, except for the publicly held chemical companies

    The managements of those companies have a fiduciary responsibility to seek highest profits possible, regardless of free trade ideologies, ethics, morals, or other side issues.

    They are, by law and charter, amoral organizations, bound only to honor the law.

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