Natural gas producers would like to export some of their product to Europe and Japan to take advantage of higher prices. One effect of those exports would be to raise natural gas prices in the U.S. and lower them in the recipient countries. Industrial giants such as Dow, Alcoa, Celanese and Nucor are members of America's Energy Advantage, a lobby group that says it is unpatriotic to allow unlimited natural gas exports. It argues that export restrictions keep natural gas prices low and give U.S. manufacturing companies a raw material advantage, which allows them to produce goods at lower prices.
I'd like to ask Dow, Alcoa and other companies that lobby against natural gas exports whether their argument applies to them. After all, they ship a lot of their domestic product overseas. For example, Alcoa exports tons of aluminum. Export restrictions on aluminum would lower domestic aluminum prices, thereby benefiting the aircraft industry, as well as making other aluminum-using manufacturers more competitive. Unfortunately, I doubt whether Alcoa would see it that way. In general, it is poor economic policy to encourage domestic American industry through costly and inefficient methods such as export restrictions.
But there's another effect of the natural gas export restrictions. The huge supply and resulting low prices have begun to act as a deterrent to future energy exploration and production. According to a Wall Street Journal article by Dr. Thomas Tunstall, research director for the Institute for Economic Development at the University of Texas at San Antonio, titled "Exporting Natural Gas Will Stabilize U.S. Prices" (May 29, 2013), natural gas production at three major shale oil fields in Texas has flattened out at 2012 output levels.
Tunstall concludes, "Over the long haul, market dynamics -- which include the ability to export without undue uncertainty or restriction -- will best manage global supply and demand curves for natural gas." I agree.