The debate over U.S. exports of liquefied natural gas (LNG) is kicking into high gear with the latest study by the U.S. Energy Information Administration (EIA) indicating higher natural gas prices and increased costs to energy consumers.
In its January 2012 report on “Effect of Increased Natural Gas Exports on Domestic Energy Markets,” EIA noted, “Larger export levels lead to larger domestic price increases, while rapid increases in export levels lead to large initial price increases that moderate in a few years.
“Even while consuming less, on average, consumers will see an increase in their natural gas and electricity expenditures. From 2015 to 2035, natural gas bills paid by end-use consumers in the residential, commercial and industrial sectors increase 3% to 9% over a comparable baseline case with no exports, depending on the export scenario and case, while increases in electricity bills paid by end-use customers range from 1% to 3%,” EIA stated.
The report immediately drew response from industry groups that favor exports. The Center for Liquefied Natural Gas said that the EIA report is only part of a larger picture of how LNG exports will impact the U.S. economy and does not account for increased economic activity, decreased U.S. trade deficit and increased job creation that it expects will be revealed in a forthcoming macroeconomic study.
The Department of Energy 's (DOE’s) Office of Fossil Energy requested the EIA report last year as part of its assessment of the impact of Lower 48 LNG exports. The agency also requested a third-party evaluation of the macroeconomic effects of exports, which is expected during the first quarter 2012.
"The EIA study is just a part of the overall analysis on the economic effects of natural gas exports," said Bill Cooper, president, Center for Liquefied Natural Gas. "The third-party report will provide a more complete economic picture by focusing on the broader macroeconomic effects, which we believe will be positive.”
"With a 100-year supply of natural gas and more supplies being discovered in new resource areas, the United States is well positioned to meet both the domestic needs of our country and to provide clean burning natural gas to new markets,” he continued.
Paul Cicio , president, Industrial Energy Consumers of America , lauded the study. “By anyone’s measure, these are substantial cost increases. The DOE has the responsibility to protect the interest of the public in this matter and the