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"Gas is traded internationally and north americans are generally not insulated from global prices. The reserves being in north america has almost zero bearing o

"Gas is traded internationally and north americans are generally not insulated from global prices. The reserves being in north america has almost zero bearing on this." The difference when you have your own supply is that the price becomes a policy choice. The government can easily decide to prioritize the domestic market and limit exports.

geertj 4y ago
> The government can easily decide to prioritize the domestic market and limit exports. They can, and have done this in the past, e.g. the US ban on export of crude oil. But this does not change the point materially. Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice.
- danenania 4y ago
  "Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice." I don't think it's so simple. Cheap energy can make entire industrial sectors viable that otherwise wouldn't be. You could easily end up ahead by putting that energy into production of goods that are higher up on the value chain rather than exporting it directly.
  - geertj 4y ago
    > I don't think it's so simple. There will be higher order effects, there always are. I don't think the second order you brought up above changes the argument either. If investing in a certain industrial sector is desirable, then why not sell gas at the international market price, and use the extra proceeds to do the investment at the level that makes sense. That way you can at least tune the investment to a level that makes sense, rather than having it depend on the delta between the local and global market price which will depend on a ton of other factors. Note that I'm not saying that's always bad to protect a local market. The assertion was that North America has enough gas causing it to be isolated from the global market pricing, and I'm still very skeptical about that claim.
midoridensha 4y ago
The other factor is that the price is necessarily much higher for exports than for domestic use, because converting NG to LNG and transporting it via ship is difficult and expensive. For domestic use, none of that is necessary. NG isn't like coal that you can just shovel onto a ship and haul across the ocean to burn somewhere else, it's a gas.

geertj 4y ago

> The government can easily decide to prioritize the domestic market and limit exports. They can, and have done this in the past, e.g. the US ban on export of crude oil. But this does not change the point materially. Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice.

danenania 4y ago
"Not exporting and consuming gas domestically at lower prices incurs an opportunity cost as the same gas could have been sold for more aboard. So net-net the people will pay for such a policy choice." I don't think it's so simple. Cheap energy can make entire industrial sectors viable that otherwise wouldn't be. You could easily end up ahead by putting that energy into production of goods that are higher up on the value chain rather than exporting it directly.
- geertj 4y ago
  > I don't think it's so simple. There will be higher order effects, there always are. I don't think the second order you brought up above changes the argument either. If investing in a certain industrial sector is desirable, then why not sell gas at the international market price, and use the extra proceeds to do the investment at the level that makes sense. That way you can at least tune the investment to a level that makes sense, rather than having it depend on the delta between the local and global market price which will depend on a ton of other factors. Note that I'm not saying that's always bad to protect a local market. The assertion was that North America has enough gas causing it to be isolated from the global market pricing, and I'm still very skeptical about that claim.

midoridensha 4y ago

The other factor is that the price is necessarily much higher for exports than for domestic use, because converting NG to LNG and transporting it via ship is difficult and expensive. For domestic use, none of that is necessary. NG isn't like coal that you can just shovel onto a ship and haul across the ocean to burn somewhere else, it's a gas.