US shale gas export to 'desperate' India could be game changer, say experts

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US shale gas export to desperate India to could be game changer: Expert. (Reuters) US shale gas export to desperate India to could be game changer: Expert. (Reuters)
SummaryThe US has this great leverage, in terms of energy exports say experts.

If America allows shale gas 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 US interests in the Asia-Pacific region, say experts.

"The US 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 International 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 US 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 India 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 economy 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 India 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.

"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 shale gas to India.

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

Sanjay Puri, founder and CEO, Alliance for US India Business also pushed for the same.

"Currently, India competes with China and Japan for buying LNG from Qatar and Australia. India is talking to Iran for a gas pipeline," he said.

"If we were able to export gas to India, if we can find an economically viable and environmentally clear mechanism, it would do three things.

"It would create economic opportunity in the US through exports, it would reduce India's dependence on the Middle East for gas, and also build a more strategic relationship based on their desire for energy independence," Puri added.

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