Huffington Post: The Big Lie on Natural Gas Exports
Last week the Department of Energy gave approval to the Freeport LNG export terminal. Combined with an earlier approval at Sabine Pass, the U.S. has now committed the first 2.4 billion cubic feet of natural gas it produces each day over the next 20 years to foreign consumers -- because under these LNG contracts exporters will be able to offer higher prices than any domestic user, regardless of the price of gas that results. These two terminals alone will divert enough energy to replace a half million barrels a day of oil.
You may find these facts surprising, even implausible. I don't blame you. You have been massively misled.
The current media conversation about whether oil and gas exports are in America's interests makes the lead up to the Iraq War look like public policy on truth serum. All informed participants know -- and almost all conceal -- that the primary purpose of building export infrastructure like the Keystone Pipeline or LNG terminals is to raise energy prices in North America. What is mystifying is why almost all of America's political class is willing to support a set of policy decisions whose outcomes will be to impoverish most Americans and weaken the nation.
Without policy permission to build out massive export infrastructure -- Keystone and the Sabine Pass LNG Terminal being only the first -- North America's increased production of oil and gas will, as economic theory would predict, yield cheaper prices. Globally, however, OPEC cartel power will keep prices up. Oil and gas interests in North America want to share in the windfall profits created by the OPEC cartel and its prices. They can only do this by raising U.S. prices to OPEC levels. OPEC is a cartel. It profits from price-fixing which would be illegal if it took place within the U.S. (or Canada or the EU.) Why should we raise U.S. oil and gas prices to OPEC levels? Why should North American producers benefit from manipulated prices which would be illegal if set by oil and gas companies themselves? MORE