Yesterday I discussed two important contributions to our national discussion on natural gas exports. The first was a forthcoming macroeconomic study from ICF International that projects job creation and economic growth if we expand liquefied natural gas (LNG) exports. And the second was a new energy policy report from the Bipartisan Policy Center that fully endorses American leadership in global trade in fossil fuels like coal and natural gas.
I also want to draw your attention to an important policy brief just issued by the Peterson Institute for International Economics. This policy brief provides further evidence for why natural gas exports present such a valuable economic opportunity for the United States.
More than that, the Peterson Institute paper is a valuable read because it provides one of the best distillations that I have seen of the legal and regulatory issues involved with natural gas trade issues.
It details the history of U.S. trade law regarding natural gas, going back to the 1938 Natural Gas Act’s “public interest” requirement for exports.
It also touches on America’s involvement in the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO), giving appropriate context to the decision facing the federal government on the LNG export applications pending before the U.S. Department of Energy.
The Peterson Institute draws several lessons from its read of trade rules and the cases that have shaped them:
- Using export restraints runs contrary to the central U.S. stance on exports, a stance that dates to the drafting of the Constitution;
- Restraining exports while permitting unlimited domestic consumption of natural gas would amount to a violation of WTO rules; and
- Restricting LNG production or exports would undermine future investment in the domestic natural gas industry.
Check out the Peterson Institute’s Liquefied Natural Gas: An Opportunity for America policy brief here.