Ever since the US began churning out huge amounts of cheap natural gas a few years ago due to advances in shale-drilling technologies, many exploration-and-production companies, lawmakers and other stakeholders have been vigorously lobbying the Obama administration to allow large-scale exports of liquefied natural gas.
But recently, the US’ largest and most influential pro-business group — the US Chamber of Commerce — has been touting a new argument for why the Obama administration should allow unfettered Is US breaking the law by restricting LNG exports? exports of LNG to higher-priced markets in Asia, Europe and elsewhere. In essence, the chamber’s argument boils down to this: prohibiting such exports would be illegal. More specifically, the chamber argues that barring any LNG exports would violate the free-trade commitments that the US has made as a leading member of the Genevabased World Trade Organization.
Christopher Guith, a chamber vice president, said it would be hypocritical — not to mention illegal — for the Obama administration to restrict LNG exports given that it has already filed WTO complaints against China for limiting sales of rare earth metals and other raw materials that are used in energy applications. “We’ve already brought an international trade complaint against China for doing precisely what is happening right now with LNG, which is picking one country over another,” Guith, who heads the policy shop at the chamber’s Institute for 21st Century Energy, said in an interview.
Under current US law, the Energy Department must quickly approve applications to export LNG to countries that have formal free-trade agreements with the US. But DOE can restrict or entirely block would-be LNG exports to non-FTA countries if it determines they are not in the US’ “public interest.”
Guith said allowing DOE to exercise that kind of “discretion” between FTA and non-FTA countries constitutes “a violation of WTO obligations.”
Bruce Josten, the chamber’s executive vice president for government affairs, echoed that view at a recent event at his group’s headquarters across the street from the White House in Washington.
“We can’t go around the world lecturing and encouraging other countries to open up their markets and then turn around and close ours on a raw material that we have boatloads of,” Josten said.