EnergyFactor By ExxonMobil | Pespectives has a new home

A clarion call for free trade – and a warning if we fail to heed it

International trade emerged as one of the salient issues of 2013, particularly with regard to commercial flows of energy products such as natural gas, coal, and oil. There’s every reason to expect the prominent public policy discussion over energy trade to continue in the new year.

For that reason, I want to draw attention to an important piece on energy-trade issues that people might have missed during the hustle and bustle of the holidays.

On December 23, Lou Pugliaresi of the Energy Policy Research Foundation authored a must-read op-ed in The Hill that explains what citizens and policymakers should focus on as trade discussions progress in 2014.

The headline – “Don’t let protectionism strangle America’s energy renaissance” – provides an insight into what is at stake and what the self-interested motives are of some of those opposing free trade.

Pugliaresi looks most closely at America’s Energy Advantage.  AEA is an advocacy group for protectionism, which I discussed last year.  AEA continues to petition the government to artificially restrict liquefied natural gas (LNG) exports. Pugliaresi calls the group’s argument a “misguided effort to protect their market share,” writing:

The irony is that restricting LNG exports will not only damage America’s potential as a major producer of energy, but also impair growth in the value-added manufacturing that the members of AEA seek to protect.

Faced with a saturated domestic market, the natural gas industry is voting with its pocketbook. Investments in natural gas are down more than 50 percent in two years.  Less investment by the industry means less demand for goods like steel and concrete, and less production of ethane and propane stripped from wellhead natural gas that underpins the revival in our chemicals sector.

Moreover, the op-ed points out something we have mentioned in this space before – namely, that experts like those at IHS calculate that unconventional energy development supports millions of American jobs and contributes hundreds of billions of dollars to the U.S. economy each year.

Pugliaresi’s essay ends with a clarion call for free trade that officials in Washington should heed in 2014 – and a warning about what may happen if they don’t:

U.S. policymakers should fight protectionist measures and support America’s role as a reliable trading partner to our allies. We otherwise will cede the global market to competitors and deny our energy industry the opportunity to realize these economic and employment benefits for the nation.


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