US Delays in LNG, Coal Export Permitting Could Violate WTO Agreements
The United States’ delay in permitting liquefied natural gas (LNG) and coal export facilities could run counter to U.S. international treaty obligations under World Trade Organization (WTO) agreements, former WTO Appellate Body Chairman James Bacchus argues in a recent report.
The United States cannot argue against trade restrictions by other countries while it delays the export of LNG and coal from the United States, Bacchus told reporters during a press conference Tuesday.
“It is strange to me that some in the energy industry see oil and gas as excluded from WTO obligations,” said Bacchus. “There’s nothing in the treaty that excludes oil and gas from WTO rules and obligations.”
As a WTO member, the United States must comply with WTO agreement trade rules. A key provision, the General Agreement on Tariffs and Trade (GATT) 1994, forbids export restrictions, including those made effective through licenses or other measures.
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Group steps up pressure to speed US okay of gas, coal exports
A lobbying group pressing the U.S. government to speed approval of U.S. natural gas and coal export proposals released a report on Tuesday contending that long delays in the approval process may violate global trade rules.
The National Association of Manufacturers commissioned James Bacchus, a former Democratic Congressman and World Trade Organization judge, to pen the report, which it says sends a message to the Obama administration and Congress that they should accelerate the approval process and lift regulatory barriers.
“This report confirms manufacturers’ view that principles of open markets and free trade should govern whether projects are approved on U.S. soil, and that all permits deserve up-or-down approval in a timely manner,” said NAM President Jay Timmons.
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Manufacturers group: Coal export limits may violate WTO
A National Association of Manufacturers report suggests that delays in enabling more coal facilities could actually lead to world trade treaty violations.
The report, issued this morning, hits at the heart of three contested coal facilities in the Pacific Northwest, including a proposal at the Port of Morrow in eastern Oregon.
NAM’s researchers reported that demand for fossil fuels is growing worldwide, which hints that there’s also a growing need for more export facilities. However, delays in obtaining building permits have thwarted coal exports. As such, the U.S. may be violating World Trade Organization agreements that forbid export restrictions.
“The United States has always been a strong advocate of these rules and has been forceful in challenging export restrictions imposed by other countries, as highlighted recently when the United States successfully challenged China’s imposition of export duties, quotas and licenses on a variety of raw materials at the WTO,” NAM researchers wrote. “Consequently, China must now eliminate its export restrictions or be subject to economic sanctions.
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NAM Study Slams LNG, Coal Export Permitting Delays
Federal, state and local permitting reviews of new facilities needed to increase exports of liquid natural gas and coal may run afoul of U.S. obligations under international trade agreements, a new study finds.
Both LNG and coal are now in abundant supply in the U.S., and demand in China and other countries for these resources is growing. Coal provides 70% of the energy consumed in China, the study notes, and more than 395 gigawatts of new coal-fired power generation is planned worldwide by 2016. U.S. natural gas prices are less than half those of Europe, the study points out, and as little as a quarter of prices in Asia.
Global demand is prompting a variety of efforts in the United States to export more coal and natural gas, but NAM officials warn a “persistent pattern” of regulatory delay for energy-related projects such as the Keystone XL pipeline is hampering the U.S. economic rebound and competitiveness.
“We have a unique opportunity to impact global trade and create jobs in the energy space,” said Aric Newhouse, NAM senior vice president of policy and government relations, in a conference call with reporters. He said every delay of months or years in permitting energy infrastructure projects “threatens our ability to grow jobs in this country and threatens our ability to grow the economy.”
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Former WTO Chairman: LNG, Coal Export Permitting Delays May Run Afoul of U.S. Treaty Obligations
NEW REPORT SAYS TABLES MAY BE TURNED ON UNITED STATES IN WTO
Unnecessary delays in the liquefied natural gas (LNG) and coal export permitting process may run afoul of U.S. international treaty obligations under World Trade Organization (WTO) agreements, according to a report by former WTO Appellate Body Chairman James Bacchus.
The report, which the National Association of Manufacturers (NAM) commissioned, examines two central questions:
Do unreasonable delays by the Department of Energy to issue licenses to export LNG to foreign countries constitute, in and of itself, a violation of our international obligations under the WTO?
Do efforts by state and local authorities in the Pacific Northwest to broaden unduly the scope of the environmental review process for planned coal export terminals beyond the federal scope, and the resulting delay, constitute a violation of our international obligations under the WTO?
As a member of the WTO, the United States is bound to comply with trade rules contained in WTO agreements. A key provision, the General Agreement on Tariffs and Trade 1994 (GATT 1994), forbids export restrictions, including those made effective through licenses or other measures. Bacchus concludes that the implementation of U.S. rules in ways that unnecessarily impede exports of LNG and coal likely violate WTO trade rules.
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