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India Is Ready for U.S. Natural Gas

India Is Ready for U.S. Natural Gas
There is ample evidence that the U.S. economy will benefit if LNG exports are increased.
By NIRUPAMA RAO
(Published in Wall Street Journal, April 7, 2013)

The relationship between India and the United States is vibrant and growing. Near its heart is the subject of energy—how to use and secure it in the cleanest, most efficient way possible.

The India-U.S. Energy Dialogue, established in 2005, has allowed our two countries to engage on many issues. Yet as India's energy needs continue to rise and the U.S. looks to expand the marketplace for its vast cache of energy resources, our partnership stands to be strengthened even further.

Despite the global economic slowdown, India's economy has grown at a relatively brisk pace over the past five years and India is now the world's fifth-largest energy consumer. It imports 75% of its energy (especially oil and petroleum products) today and expects to import 90% over the next decade. As a result, India is working hard to diversify its energy supplies. Still, the demand for energy keeps growing at a rate of 5%-6% annually. My country needs to secure more supplies to foster the socio-economic development of millions of our people who are still living in poverty.

Happily, the U.S. has experienced a boom in the production of natural gas. The ability to tap large formations by advanced technologies has yielded a large amount of this energy resource that achieves significant savings compared with diesel, especially when used in high-mileage heavy-duty vehicles.

Liquefied natural gas is transported more easily than other forms of energy. Significant investments, including some from India, have been made in technologies designed to harness LNG safely and efficiently and to build new facilities and ports to distribute it globally.

There is a significant potential for U.S. exports of LNG to grow exponentially. So far, however, while all terminals in the U.S. with capacity to export LNG are authorized to ship it to countries with which the U.S. has a free-trade agreement, only one—the terminal at Sabine Pass in Louisiana—has received authorization to export to non-FTA countries.

Authorization for other terminals to export LNG to those countries is currently awaiting a review by Department of Energy. As part of its own due diligence, the department commissioned a report on the domestic economic impact of increased LNG exports. The study analyzed more than 60 different macroeconomic scenarios, and under every one of them the U.S. economy would experience a net benefit if LNG exports were increased.

A boost in LNG exports would have many positive effects on both the U.S. and Indian economies. For the U.S. it would help create thousands of jobs and an expanded revenue stream for the federal government. For India, it would provide a steady, reliable supply of clean energy that will help reduce our crude oil imports from the Middle East and provide reliable energy to a greater share of our population. For both countries, which are committed to environmental sustainability, increasing the use and transport of LNG globally will help put into greater use one of the cleanest energy sources in the world.

The prospect of increased Indian investment in the U.S. natural-gas market will usher in a new era for a strong and mutually rewarding India-U.S. energy partnership. Through it, we will further consolidate our strategic ties and deepen cooperation for the benefit of millions of people in both countries.

Ms. Rao is the Indian ambassador to the United States.