Carpe Diem

Chemicals are America’s second largest export category this year, but ‘Big Chemical’ wants to restrict natural gas exports?

Rank Export Category Year to Date (billions)
1 Automotive vehicles, parts, and engines $75.1
2 Chemicals $33.0
3 Petroleum products $28.3
4 Fuel oil $28.2
5 Civilian aircraft $25.7
6 Pharmaceutical preparations $24.4
7 Industrial machines $23.9
8 Semiconductors $21.0
9 Nonmonetary gold $20.4
10 Electric apparatus $20.1

The table above shows the top ten US export categories this year through June, according to trade data from the BEA. America’s second largest export this year is Chemicals, totaling $33 billion for the January to June period.

Doesn’t it seem a little inconsistent then that some of America’s largest chemical companies, including Eastman, Celanese, Huntsman, and Dow, who enjoy greater profits by selling billions of dollars of their products overseas, have joined forces in a protectionist coalition called America’s Energy Advantage (more accurately America’s Energy Advantage for Some Big Chemical, Steel, and Aluminum Companies Using Other Companies’ Cheap Natural Gas) with the sole goal to limit exports of America’s abundant natural gas?

The New York Times had an article yesterday about the controversy being generated by Dow Chemical’s CEO Andrew Liveris, who is “spearheading the campaign against increased exports of natural gas” through America Energy’s Advantage and by spending millions of dollars on lobbying. According to the NY Times, Mr. Liveris “has emerged as the principal opponent of unfettered natural gas exports.”

Quoted in the NY Times article is Charif Souki, the CEO of Cheniere Energy, a Houston-based energy company, who said “He [Andrew Liveris] wants free trade for everything he manufactures but no free trade for anybody else.”

It’s a good point. If “Big Chemical” — Dow, Eastman, Celanese, and Huntsman — enjoy greater sales and profitability by having access to foreign markets, then how can they logically, reasonably, and ethically advocate a position that would restrict access to those same foreign markets for other domestic firms — like US energy firms with abundant supplies of natural gas who have eager buyers overseas? If Big Chemical objects to “unfettered” exports of natural gas, shouldn’t those $33 billion of chemical exports this year also be objectionable and subject to some “fettering”?

7 thoughts on “Chemicals are America’s second largest export category this year, but ‘Big Chemical’ wants to restrict natural gas exports?

  1. Interesting issue—we have trillions of dollars to secure Mideast oil—and now we have extra fossil fuels to export?

    “Sure Shot” Dick Cheney said Iraq was about oil.

  2. If we print the international reserve currency, should we export anything?

    We can print money and buy whatever we need on globe markets.

    Why should we labor and invest to produce goods and services that foreigners then consume?

  3. Natty gas extraction probably “value” adds 1.25% to the economy.

    So if natty gas exports are 10% of production (right now 5% of current production gas been approved for export), value added increases to 1.37%, ceteris paribus.

    The counterfactual is the value added from natty gas domestic downstream operations in the absence of exports; the so-called re-shoring “chemical manufacturing” revival.

    With exports, that revival is dead on arrival. Just look at chemical industry industrial production numbers for proof.

  4. your sources are wrong

    real statistics:

    Total US exports (2012) $1.55 trillion
    1. Machines, engines ($215.2 billion)
    2. Electronic equipment ($162.1 billion)
    3. Oil ($137.5 billion)
    4. Vehicles ($132.9 billion)
    5. Aircraft, spacecraft ($104.3 billion)
    6. Medical, technical equipment ($87.5 billion)
    7. Gems, precious metals, coins ($71.7 billion)
    8. Plastics ($58.8 billion)
    9. Organic chemicals ($46.2 billion)
    10. Pharmaceuticals ($40.1 billion)

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>