Friday, April 26, 2013

Fearing Iran entry, US congressmen favour export of natural gas to India

Top American lawmakers have strongly favoured export of US natural gas to India, in the absence of which, they said, the energy starved nation might be forced to join the Iran-Pakistan gas pipeline.

During a Congressional hearing on export of US natural gas, the lawmakers argued that it is in the national security interest of the US to export the excess natural gas to its allies like India and Japan and also to its European allies so as to reduce their dependence on Russian gas.

\"Without US natural gas, the Indians might have to participate in the Iran-Pakistan gas pipeline. We have given the Indians a reasonable alternative. We should use it,\"

Congressman Ted Poe said.

Chairing a Congressional hearing on \"Natural Gas Exports: Economic and Geopolitical Opportunities\", Poe said, \"Liberalising our natural gas export policy will provide certainty to allies and economic partners around the world that the United States is an advocate of free trade.\"

Congressman Brad Sherman said it was in national security interests of the US to provide secure natural gas supplies to its allies and to prevent India from turning to Iran for a natural gas pipeline.

Indian Ambassador to the US Nirupama Rao, in an editorial in The Wall Street Journal this month had said that export of US natural gas to India \"would provide a steady, reliable supply of clean energy that would help reduce India\'s crude oil imports from the Middle East and provide reliable energy to India\".

Poe said cheap US natural gas exports would reduce the Russian stranglehold on European market and give the US more political clout at the expense of Russia.

\"In the Pacific, allies like Japan and Korea pay very high prices for natural gas. They would be immediate importers of cheaper US natural gas if we were allowed to sell it to them,\" he said.The US Department of Energy is in the final stages of taking a policy decision on export of natural gas to countries like India and Japan. Under the existing laws, US can export natural gas to only those countries with which it has a free trade agreement.

Testifying before the committee, Dr David Montgomery, senior vice president at NERA Economic Consulting, which had helped lead the study that the Department of Energy commissioned on economic impact of LNG exports, also supported the lawmakers.

Montgomery warned that if the US does not change its existing rule, in that gas countries like Canada would import the natural gas from the US and would export their natural gas to countries like India.

\"Limits will be self-defeating. Free trade areas will receive gas. Canada\'s a free trade area. If we have abundant gas and don\'t export it ourselves as LNG, it will move to

Canada, and that gas will displace Canadian gas, which then can be exported.

We will suffer all of the costs of exporting natural gas and get none of the benefits of selling it at the high prices in Asia,\" Montgomery said.

Congressman Poe, who was recently in India said that the only thing that the External Affairs Minister wanted to talk him about was getting natural gas from the US to India.

\"They made it real simple for me that the cost of their production and transportation in India is higher than it would cost for us to produce it in the United States, transport it, make a profit, and they\'re still getting a good deal in India,\" he said.

Michael Levi, director, Program on Energy Security and Climate Change, Council on Foreign Relations, which is an American think-tank, said exporting US natural gas to India would help the United States politically.\"There\'s a long history in the US-India relationship, at least as the Indians see it, of the United States interfering with free trade, to India\'s detriment, and this goes back a

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