Thursday, December 6, 2012

Report Bolsters the Case for Large U.S. Natural Gas Exports

I told you natural gas was the Next Big Thing.

In a finding that could help create a new industry of natural gas exports in the United States, a government study released on Wednesday concluded that the national economic benefits of significant natural gas exports far outweighed the potential for higher energy prices for consumers and industrial users of the fuel.

The study prepared by NERA Economic Consulting for the Energy Department, said that domestic prices would not rise sharply as a result of exports and that export revenue would generally help most Americans.

Energy companies have proposed more than a dozen projects to export gas in liquefied form to Europe and Asia, where the fuel is typically three to four times more expensive than in the United States. The Obama administration has been cautious on whether to embrace large exports of gas out of concern that consumers who rely on gas for heating and cooking could see their utility prices rise. Higher exports could also raise costs to manufacturers that now benefit from the nation’s glut of cheap gas, like chemical and fertilizer manufacturers.

But the huge gas export terminals, which cost billions of dollars to set up, would also generate thousands of construction jobs, spur further development of natural gas fields and generate lucrative export earnings.

The administration has only approved one export terminal so far, by Cheniere Energy in Louisiana, saying it was waiting for the results of the economic study before making decisions on the rest of the projects.
Yes, it would raise prices, but I would think, it would take a lot of natural gas siphoned away to do that.

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