America’s natural gas: Should exports be restricted?
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Event Summary

Recent rapid technological advances have put the US in a prime position to profitably export natural gas, yet opponents fear these exports will seriously harm US consumers and manufacturers. As a US House of Representatives Energy and Power Subcommittee hearing on US energy abundance got underway on Tuesday, a group of experts gathered at AEI to debate the same issue: the merits and follies of restricting US exports of liquefied natural gas (LNG).

AEI's panel exemplified the vigorous disagreement over LNG exports. Ken Ditzel of Charles River Associates supported export restrictions, concluding that while LNG exports benefit the US economy, the use of gas for domestic manufacturing benefits the US economy even more. NERA's David Montgomery advocated for unrestricted trade and ascribed the LNG controversy to a fight over economic rents. In his opinion, common sense should dictate free exports of a good that the US is superior at producing.

Purdue University's Wallace Tyner urged caution; in his opinion, a partial trade liberalization could have unforeseen distributional consequences. AEI's Claude Barfield pointed out that the issue lies at the intersection of economic and political interests. Indian Ambassador Nirupama Rao concluded the event by reminding the audience that the United States has been the principle advocate and beneficiary of a free global trading system for decades.
--Veronika Polakova

Event Description

US natural gas production has increased sharply because of recent technological advances in hydraulic fracturing and horizontal drilling. As a result, domestic natural gas prices have fallen substantially below international prices and are projected to stay low. This creates an opportunity for US gas producers to export significant quantities of gas profitably.

But critics fear that such exports would reduce domestic supplies and raise domestic prices, harming US consumers. They therefore argue that gas exports should be limited or prohibited. This event will explore the policy arguments from both perspectives and feature a luncheon address by Indian Ambassador Nirupama Rao, who has been an advocate for US natural gas exports.

If you are unable to attend, we welcome you to watch the event live on this page. Full video will be posted within 24 hours.

Agenda

9:45 AM
Registration

10:00 AM
Panel Discussion:
Claude Barfield, AEI
Ken Ditzel, Charles River Associates
David Montgomery, NERA Economic Consulting
Wallace Tyner, Purdue University
Moderator:
Benjamin Zycher, AEI

11:15 AM
Question-and-Answer Session

11:45 AM
Break

12:00 PM
Introduction:
Arthur C. Brooks, AEI
Luncheon Address:
Nirupama Rao, Indian Ambassador to the United States

12:30 PM
Adjournment

Event Contact Information

For more information, please contact Veronika Polakova at [email protected], 202.862.4880.

Media Contact Information

For media inquiries, please contact [email protected], 202.862.5829.

Speaker Biographies

Claude Barfield, a former consultant to the Office of the United States Trade Representative, researches international trade policy (including trade policy in China and East Asia), the World Trade Organization (WTO), intellectual property, and science and technology policy. His many books include “Free Trade, Sovereignty, Democracy: The Future of the World Trade Organization” (AEI Press, 2001), in which he identifies challenges to the WTO and to the future of trade liberalization.

Arthur C. Brooks is the president of AEI. Until January 1, 2009, he was the Louis A. Bantle Professor of Business and Government Policy at Syracuse University. He is the author of 10 books and many articles on topics ranging from the economics of the arts to applied mathematics. His most recent books include “The Road to Freedom: How to Win the Fight for Free Enterprise” (Basic Books, 2012), “The Battle: How the Fight between Free Enterprise and Big Government Will Shape America's Future” (Basic Books, May 2010), “Gross National Happiness” (Basic Books, 2008), “Social Entrepreneurship” (Prentice-Hall, 2008), and “Who Really Cares” (Basic Books, 2006). Before pursuing his work in public policy, Brooks spent 12 years as a professional French hornist with the City Orchestra of Barcelona and other ensembles.

Ken Ditzel is a principal in the energy practice of Charles River Associates (CRA), where he has provided project management, financial analysis, and market strategy expertise to the power generation, oil and gas, and manufacturing industries. He specializes in developing and examining future scenarios for natural gas, coal, oil, and electricity markets in a range of technology, policy, and economic environments. In these engagements, Ditzel uses CRA’s proprietary energy models and customized analyses to assess the impacts on clients’ asset portfolios and strategic direction. Ditzel also advises clients on intellectual property and litigation matters involving emerging and alternative energy technologies. Ditzel has authored a number of technical expert reports and managed economic damage assessments for such engagements. Before joining CRA, Ditzel served as a power generation industry expert at Booz Allen Hamilton in Washington, DC. Before joining Booz Allen, he was a power plant operations engineer at the Dow Chemical Company in Freeport, Texas.

David Montgomery is a senior vice president at NERA Economic Consulting, and led NERA’s study of the economic impact of liquefied natural gas exports commissioned by the US Department of Energy (DOE). He testifies frequently before courts, regulatory agencies, and committees of the US Congress on issues affecting energy markets and environmental policy. He and his colleagues at NERA developed the comprehensive models of the US and global economy and the world gas market that were used in the DOE study, and have used these models for investigating the economic impacts of policies as varied as cap and trade programs for greenhouse gases and federal regulations affecting manufacturing. Montgomery also advises clients on strategic responses to uncertainties about future environmental and energy policies. He held a number of senior positions in the US government before he entered consulting. He was assistant director of the US Congressional Budget Office and deputy assistant secretary for policy in the US Department of Energy during the Carter administration. He also taught economics at the California Institute of Technology and Stanford University.

Nirupama Rao assumed her responsibilities as ambassador of India to the United States in September 2011. She joined the Indian Foreign Service in 1973. In a diplomatic career spanning over three decades, Rao served in various world capitals, including Washington, Beijing, and Moscow. She acquired extensive experience in India-China relations, serving in the East Asia Division of the Indian Ministry of External Affairs at policy level capacities for several years, and later serving as India's first woman ambassador to China from 2006 to 2009. Her other ambassadorial assignments include Peru, Bolivia, and Sri Lanka, where she was also India's first female high commissioner. Rao served in Washington as minister for press and cultural affairs at the Indian embassy from 1993 to 1995. She also served as deputy chief of mission at the Indian embassy in Moscow in the late 1990s. Rao was designated New Delhi’s spokesperson of the Ministry of External Affairs in 2001, the first female Indian Foreign Service officer to hold this post. On completion of her ambassadorial tenures in Sri Lanka and China, Rao was appointed foreign secretary, the highest office in the Indian Foreign Service, where she served a two-year term through July 2011. Rao was a fellow at the Centre for International Affairs (now the Weatherhead Centre) at Harvard University in the early 1990s. She was also a distinguished international executive in residence at the University of Maryland at College Park in 1999–2000.

Wallace Tyner is an energy economist and James and Lois Ackerman Professor of Agricultural Economics at Purdue University. He has authored over 250 professional papers in these areas, including three books and more than 90 journal papers, published abstracts, and book chapters. His past work in energy economics has encompassed oil, natural gas, coal, oil shale, biomass, ethanol from agricultural sources, and solar energy. In June 2007, former senator Richard G. Lugar (R-IN) named Tyner an “energy patriot” for his work on energy policy analysis. In 2009 he received the Purdue College of Agriculture Outstanding Graduate Educator award and was part of a group that received the College Team award for multidisciplinary research on biofuels. In 2011, he served as cochair of the National Academy of Sciences Committee on Economic and Environmental Impacts of Biofuels.

Benjamin Zycher is a visiting scholar at AEI, the president of Benjamin Zycher Economics Associates Inc., and a senior fellow at the Pacific Research Institute. He is an associate in the Intelligence Community Associates Program of the Office of Economic Analysis, Bureau of Intelligence and Research, and US Department of State. Zycher served as a senior staff economist for the President’s Council of Economic Advisers from July 1981 to July 1983. While at AEI, he is finishing a monograph on the economic viability of renewable energy and is working on monographs on state spending limits and on energy policies and employment.

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