Thorny Issue: Dominion Files Request to Export Shale Gas

Cove Point Terminal - MarylandOne of the strongest arguments in favor of drilling for Marcellus and other shale gas in the U.S. is that it provides a cheap alternative fuel for Americans—a “home grown” energy source that benefits everyone. It’s a simple and undeniable fact: Cheap energy translates into economic prosperity for all citizens. Cheap energy makes it easier for businesses to produce goods and services, and that means jobs.

Energy companies often make the “cheap domestic energy” argument when talking about the benefits of shale gas drilling—rightfully so. But when those same companies then start exporting natural gas, well, it’s a tad hypocritical. Exporting leads to less supplies here at home, and less supplies means higher prices. Energy companies will argue we have more than enough—an excess of natural gas—and by exporting they create more jobs here at home. But others (like MDN) are not so sure that argument holds up, especially for a nascent industry with huge potential to transform the energy picture here at home.

Dominion Resources is the latest to make application with the DOE to start exporting shale gas:

Citing abundant access to supplies of natural gas from Pennsylvania’s Marcellus shale and elsewhere, Virginia-based Dominion Resources Inc. said on Friday that it filed a request with the Department of Energy to begin exporting liquefied gas from its Cove Point terminal in Maryland.

The company seeks to export up to 1 billion cubic feet of natural gas a day beginning in late 2016, said spokesman Dan Donovan.

Dominion’s application, filed late Thursday [Sept. 1], envisions two steps, Donovan said. First, the company is applying to export to countries that have free trade agreements with the United States. That application will be quickly followed by one to allow exports to non-FTA countries. That is a long list and includes many energy-thirsty countries in Asia, such as China.

The Tribune-Review previously reported that Dominion would likely join a growing group of American companies lining up to start shipping natural gas to countries overseas. One company, Texas-based Cheniere Energy Inc., has won DOE approval to export 2.2 billion cubic feet a day from its Sabine Pass terminal in Louisiana.

Two other major energy companies have applied to export a total of 3.4 billion cubic feet of natural gas a day. Another company, Oregon’s Jordan Cover Energy Partners LLC, expects to make a decision soon on applying to export about 1 billion cubic feet of natural gas a day, project manager Robert Braddock said last month.

If all of these requests were approved, the exports combined would amount to more than 12 percent of American natural gas production, based on 2010 levels.*

Should 12 percent of our domestic natural gas supplies be exported? What do you think? Leave a comment below.

*Pittsburgh Tribune-Review (Sep 3, 2011) – Dominion files request to export liquefied natural gas