WPC '13: Exxon makes plea for US exports of LNG
By Ben DuBose
HOUSTON -- The president of ExxonMobil Chemical made a strong stand Wednesday in support of US natural gas exports, decrying opposition efforts as protectionist and defying logic.
Speaking at the IHS World Petrochemical Conference, Stephen D. Pryor continued Exxons war against industry rivals such as Dow Chemical that say the US would be better served by exporting manufactured goods rather than raw materials.
Protectionist pleas are often wrapped in pious appeals to nationalism, the ExxonMobil Chemical president said. The real agenda is to unlevel the playing field and stifle competition.
As an industry, we must vigorously oppose protectionist measures that limit access to markets around the world.
ExxonMobil is one of several companies seeking permission from the Obama administration to build a natural-gas export terminal in Texas.
Mr. Pryor cited the US-EU free trade agreement and the Trans-Pacific Economic Partnership as examples of positive free-trade initiatives, noting that the American Chemistry Council (ACC) trade group supports both.
On the other hand, he contends that blocking LNG exports would undermine efforts to build closer trading ties.
These proposals to block LNG investments justified by artificial price gaps represent a selective and harmful departure from free market and free trade principles, Mr. Pryor said, leading into a series of rhetorical questions.
For example, why should the EU drop tariffs on American chemicals made from US natural gas if the US blocks exports of that gas in liquefied form?
Likewise, how can US secure sanctions against China for restricting exports of rare earth minerals without inviting sanctions on the US for restricting exports of natural gas?
How can the US ask Japan, a close ally still suffering from energy shortages, to stop importing oil from Iran, if we prevent Japan from importing gas from the US?
Mr. Pryor said he also believed that opposing LNG exports would be harmful to domestic policy.
It would return the US to the era of price controls in 1970s and 1980s, he said. Those price controls then on natural gas produced a tremendous drop in production, as well as supply shortages. That caused price spikes and overall diminished economic activity.
The eventual deregulation of natural gas in 1980s created free market conditions that spawned the age of unconventional oil and gas, he continued. The voices back then that opposed deregulation are wrong, just as they are wrong today for advocating new controls on natural gas.
Mr. Pryor said that studies he has seen project no significant increase in the price of US natural gas if LNG exports are approved.
Thats because LNG exports would prompt increased supply and production from Americas ample resources, he said.
Critics allege that Dow and other similar companies are seeking to retain the advantage of cheap gas-derived ethane feedstock, which has been cited as the foundation for new US petrochemical proposals.
The point is this, Mr. Pryor concluded. Protectionism and price controls defy economic logic, defy historical experience and undermine prosperity and progress, both here and abroad.
Free markets and free trade are extraordinary engines that are proven to stimulate investment, create jobs and build closer ties among nations.
The conference continues through Thursday at the Hilton Americas in downtown Houston.
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