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US shale gas export to India could be game changer: experts

If US allows shale gas exports to India, it will strengthen bilateral relationship

Press Trust of India  |  Washington 

If America allows exports to India, it will not only help address the Asian nation's energy needs and strengthen bilateral relationship, but also end up being a game changer for the interests in the Asia-Pacific region, say experts.

"The has this great leverage, in terms of energy exports. So, I think, that reinforces my view that we need to get this big thing going where there are much more 2-way trade -offs possible," former IMF economist, Arvind Subramanian, Senior Fellow at the Peterson Institute for Economics, told a Congressional hearing on Wednesday.

Dan Twining, a Senior Fellow for Asia at the German Marshall Fund of the United States, also supported the move at the hearing and argued that this would help the build its security architecture in the Asia Pacific region.

He said, "We should also particularly build in that dimension to our key security partnerships in Asia. In Asia our top most important, most capable security partnerships are with Japan and in different ways...

"...Say to them, look, part of this package could be preferential access or some facilitated agreement to US energy exports, because in fact, we have a national security interest in helping you develop your and helping you develop your military capacity, help us police this tough region in the world, create some ballast in Asia other than around China."

Twining added. "This is something our allies desperately need. And so, you know, I think this could be a game changer if we play it right."

Both Subramanian and Twining were responding to questions from Congressman Charles Boustany from Louisiana, during a hearing on US trade by the Trade Subcommittee of the House ways and Means Committee.

"I know Cheniere Energy is a company in my district, which has been granted the first LNG export licence. And we in Louisiana are very, very excited about this because it does mean jobs. They've completed a 20-year contract with the Indian energy company, GAIL. I think the contract entails 3.5 million tonnes of natural gas, liquefied natural gas, exported from the US annually," he said, asking the experts how the US can use this as leverage against

"India is heavily dependent on coal. So from a climate change point of view as well, getting cleaner gas from the United States I think will help enormously. I think there's a huge opportunity there, both the energy side, on the climate change side.

"I think the United States should use that as leverage in pursuing, not just the energy agenda," Subramanian said.

At a separate Congressional hearing on South Asia, experts supported the idea of exporting to India.

Assisting India's energy security by allowing it to import from the US, needs to be one of the policy options for the US, said Vikram Nehru, from the Carnegie Endowment for Peace.

First Published: Fri, March 15 2013. 13:35 IST