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Natural gas export plans threaten historic alliances

The Oklahoman's Energy Editor Adam Wilmoth writes that a plan to help boost natural gas prices by allowing liquefied natural gas exports has set producers at odds with manufacturers.
by Adam Wilmoth Published: January 25, 2013

Low natural gas prices have led producers throughout the country to focus their attention on both increasing oil production and encouraging more natural gas consumption.

The efforts have led chemical makers and other manufacturers to expand domestic operations and consider moving production back to the United States from the Middle East and Asia because of the relatively low fuel costs.

The natural gas industry also is encouraging individuals, governments and companies to switch to compressed natural gas and liquefied natural gas instead of gasoline and diesel.

Oklahoma Gov. Mary Fallin has taken up the charge and led an effort of 22 governors to ask Detroit to make natural gas-powered vehicles.

One of the more controversial strategies to increase natural gas consumption is the effort to build liquefied natural gas export terminals to send the fuel to Europe and Asia, where it is selling for up to five times as much as here at home.

Natural gas industry leaders have said exports would have a minimal effect on domestic prices while benefiting consumers and producers alike.

They point out that the process of liquefying, transporting and regasifying the fuel would add $5 to $7 per thousand cubic feet, making it preferable in many cases to use the fuel domestically.

They say exports would be used mainly for excess gas and would create a price floor that would let producers increase production without fear of prices dropping so low it is not economically viable to produce.

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by Adam Wilmoth
Energy Editor
Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector....
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