Should the US restrict LNG exports to assist higher margin plastics exports ?

An article in Bloombergbusinessweek (June 3,2013) describes efforts by chemical companies like Dow Chemicals to argue against US exports of liquefied natural gas (LNG) given the abundance of natural gas in the US. These chemical companies produce polymers and plastics using natural gas for 10 to 12 cents, while European producers using crude oil face production costs of 50 cents. Preventing access to cheap LNG is supposed to preserve the US cost advantage and enable higher margin plastics exports. Should the LNG exports be blocked to help the competitiveness of the plastics exports? Will the lower US prices be a disincentive for US natural gas producers if exports are blocked ? Or will the new markets serve as a boost for additional exploration and leave the competitiveness of plastics unaffected ?

About aviyer2010

Professor
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