INDIA-U.S. ENERGY TIES: ENDING PROTECTIONISM

It is time for India and the United States, the world’s leading democracies, to become full-fledged energy partners. Doing so will go far toward making the U.S. and India true strategic partners and driving cooperation on a host of issues from climate change to maritime security. With President Obama having accepted Prime Minister Modi’s invitation to be the Chief Guest at this year’s Republic Day celebrations, now is the time for the U.S. and India to make progress on energy across the board. However, a full energy partnership will require policy adjustments on both sides. For the U.S., this will mean changing policies that are clearly protectionist in regard to the export of liquefied natural gas (LNG) and oil. In regard to LNG, the U.S. has one set of export standards for countries with which the U.S. has free trade agreements and another far more onerous set for India and other countries with which the U.S. does not have such agreements. While some in the U.S. favor discrimination on environmental grounds (on the theory that hindering exports of LNG will deter fracking), economic protectionist factors are paramount. Opposition in the U.S. Congress to change has come from northeastern representatives who believe that exports will lead to increased gas prices for home heating and cooking. A coalition of companies in gas intensive manufacturing also has opposed change supposedly to keep gas cheap for their own use