Washington: American petroleum industry has asked the government to give permit to export the country's natural gas, a move which can benefit energy-seeking developing countries including India.
"We have plenty of natural gas to meet our domestic needs and to export to strategic allies around the world," said Erik Milito, group director for upstream and industry operations of the American Petroleum Institute (API) early this week.
"We continue to urge the US Department of Energy to approve pending applications for authorisation to export," Milito added.
Early this month, API submitted its petition to the US Department of Energy seeking view form different stake holders in this regard.
"The arguments for exports are even stronger than before. An energy revolution is underway in the US. Uses of new technologies are showing that we have vastly more energy potential than we thought we had even just a short time ago," he said.
"The US is awash in natural gas with huge additional productive capacity that could be ramped up in relatively short order to fully supply domestic and likely export markets well into the future," Milito said.
Responding to the view expressed by the opponents of exporting natural gas, Milito said the case for more exports is clearer than ever, and consistent with basic principles of economics.
"Trade is good. Exports are good. And if we allow natural gas producers to export natural gas when they find opportunities to do so, American workers and our nation's economy will be better off," he said.
In its submission to the Department of Energy, API said the increase in supply potential undercuts the main argument of proponents of restricting exports, which is that DOE used outdated demand data in its analysis that said allowing exports would be beneficial.
"The most recent data from DOE confirms that supplies will be very robust. This implies there is more than sufficient natural gas to meet domestic and export needs with little adverse impact on prices - and that the net economic benefits of allowing exports are even greater than earlier thought, as analysis suggests," he said.
"Second, the costs of exports will restrain the amount of natural gas that is exported. Exporting natural gas involves significant costs in liquefying, transporting and regasifying."
"If US natural gas prices rise above a certain level, export markets will prove less attractive and less natural gas will be exported, which would put downward pressure on US prices," Milito said.
Even more downward pressure will come from the global market - from foreign natural gas producers who will be competing for the same business as US natural gas exporters," he said.
"Third, the potential increase in natural gas prices will be limited and not sufficient to make domestic manufacturers uncompetitive," argued Milito.
First Published: Thursday, February 28, 2013, 11:34