The Register-Herald, Beckley, West Virginia


April 1, 2014

Energy market

Coal continues to lead the way when it comes to West Virginia’s exports, despite a decline of 26 percent over the previous year.

U.S. Census figures released last week show we exported $8.4 billion worth of products in 2013, which was the third-highest total in state history, but below the record $12.3 billion in exports in 2012.

Coal was our top export, but fell 40 percent to $4.4 billion from $7.4 billion the previous year.

“The world markets know the high quality of West Virginia’s coal both for steam and steel production,” said West Virginia Coal Association President Bill Raney. “So while last year was a bit of a struggle, we continue to see exports as a bright spot for our state’s coal industry.”

We wish we could say the same for the export possibilities of the state’s booming natural gas industry.

U.S. exports of crude oil are banned by a 1975 law passed following the Arab oil embargo. Under a 1938 law, natural gas exports are for all practical purposes prohibited as well. Refined products such as gasoline are allowed to be exported.

Small amounts of natural gas are exported via pipeline to Mexico and Canada. Even less liquefied natural gas, which can be transported profitably via tankers across the world’s oceans, is exported.

So why doesn’t the United States export crude oil or natural gas?

Because, writes energy expert Amy Harder in The Wall Street Journal, those laws were based on the idea of energy scarcity, and were designed to protect the American energy market from higher domestic prices by blocking our oil and gas from being sold overseas.

But technology, which has changed so much in our daily lives, also has changed the energy equation in America.

Thanks to hydraulic fracturing, crude oil is flowing freely from the Bakken fields in North Dakota and from the Eagle Ford play in Texas.

And fracking for natural gas in the shale formations in West Virginia and neighboring states is also helping change the game when it comes to energy production in the United States.

Thanks to technology, we now have the products and the means to export not just coal but natural gas to the rest of the world, and have plenty left over for use here in America.

In short, Harder says, the laws restricting American energy from being exported have not kept up with new technologies.

Last week, state Sens. Mike Green, D-Raleigh, and Daniel Hall, D-Wyoming, both acknowledged that forecasts say we’re facing another tight state budget in West Virginia next year, even after cutting 7.5 percent this year.

We’re not economists, but it seems obvious to us that an export market in natural gas would be a godsend for West Virginia, and help replace the revenue we’ve lost by the reduction in coal exports.

We’d even go so far as to say that removing restrictions on the export of crude oil and natural gas would have far-reaching benefits for America’s economy and foreign policy as well.

It isn’t a coincidence that Russia, which produces and ships natural gas via pipeline across Ukraine, has so much leverage in the crisis in Crimea since Russian gas heats a large part of Europe.

We think the best way to deal with a newly aggressive Russia is to reward our allies by exporting American natural gas to replace their dependence on Russian energy sources.

That would also make West Virginia natural gas a viable export product.

It’s time our regulatory restrictions over energy exports start to catch up with the pace of technological innovation in America.

So to our leaders in Washington, we say: Tear down those laws.

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