Five Applications Filed with DOE to Export Natural Gas

An issue that will be debated in coming months (and years) is whether or not to export some of the natural gas that America has in abundance now that the miracle of hydraulic fracturing has released it from shale formations. Some say it will help the U.S. achieve a better trade balance with other countries once again. Others say exporting will keep prices for natural gas higher than they otherwise would be for consumers.

The Department of Energy (DOE) has so far received five applications from companies that want to create terminals to export liquefied natural gas (LNG) to overseas markets—one of them has been approved. Just six years ago the natural gas industry was doing all it could to import LNG from foreign countries.

The natural gas industry, which is eager to sell more fuel, says overseas markets could generate billions of dollars in export earnings, improve the nation’s balance of trade and boost the economy in shale-gas areas such as Pennsylvania.

“Exports represent a good opportunity for the United States,” said James J. Balaschak, a principal of Deloitte Services L.P., based in Philadelphia.

The five export facilities could ship up to 6.6 billion cubic feet of gas a day to foreign countries, about 10 percent of total current domestic U.S. consumption.

But some gas customers say exports will drive up domestic prices, mostly benefit gas producers and undermine a chief virtue of natural gas — energy independence.

Jim Collins, a representative of the American Public Gas Association, said at a Senate committee hearing last week that allowing natural gas exports would produce “predictable and disastrous” results for household consumers.

Collins, a utility official in Hamilton, Ohio, said “U.S. policymakers must carefully consider and prioritize the use of domestic resources according to the national interest over both the short and long terms.”*

*Wilkes-Barre The Times Leader (Nov 14, 2011) – Gas industry looking to generate more cash with exports