Natural gas exports: Slow walk or 'danger zone'?

Published on NewsOK Modified: January 8, 2014 at 12:16 pm •  Published: January 8, 2014
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WASHINGTON (AP) — The debate over exporting liquefied natural gas is intensifying as the Energy Department considers an array of applications to ship the fuel to Japan, India and other countries where prices are far higher than in the United States.

Some large manufacturers that use natural gas say the department is moving too quickly to approve gas exports, pushing the United States into a "danger zone" that could raise prices and harm the economy. Environmental groups worry that tentative approval of several large export projects may accelerate a fracking boom they say could harm public health and the environment.

Industry groups, meanwhile, say the administration is moving too slowly, with just one of nearly two dozen proposed LNG export terminals given final approval in the past two years. Four other projects have received conditional backing.

"The Department of Energy's slow-walk of LNG export licenses violates our trade obligations" and could cause the U.S. to lose billions of dollars in the global gas market, said Margo Thorning, director of the Act on LNG campaign, an advocacy group that supports gas exports.

"In a perfect world, we'd like to just see them approve all the applications that meet the requirements and let the market figure out which ones are actually going to be built," said Marty Durbin, president and CEO of America's Natural Gas Alliance, an industry group that has pushed for more exports to keep the U.S. competitive in a global market.

If built, the projects already given tentative or final approval would export about 6.7 billion cubic feet of natural gas a day, enough to meet the needs of nearly 70,000 homes for one year. And that is just the beginning. The proposals considered so far represent less than one-quarter of the total amount energy companies are seeking to export.

Energy companies say the U.S. should act now, before other countries such as Russia or Iran approve export projects that could help meet growing energy demands in Asia and other parts of the world.

The push for LNG exports comes amid a boom largely resulting from a drilling technique known as hydraulic fracturing, or fracking, which involves pumping huge volumes of water, sand and chemicals underground to split open rocks to allow oil and gas to flow. Improved technology has allowed energy companies to gain access to huge stores of natural gas underneath states from Wyoming to Pennsylvania but has raised widespread concerns that it might lead to groundwater contamination and even earthquakes.

Average wholesale prices for natural gas increased significantly last year to an average of $3.73 per million British thermal units, according to the U.S. Energy Information Administration. However, gas prices remain low in historical terms. Increased production kept 2013 prices at the second-lowest level in the past decade, the EIA said.

Overall U.S. natural gas production is expected to grow by about 2 percent this year, the EIA projects.

The drilling boom has prompted a push by American oil companies to export crude oil for the first time since the Arab oil embargo in the early 1970s. Energy Secretary Ernest Moniz suggested at an industry gathering last month that it may be time to revisit the ban on crude exports.

President Barack Obama has said he generally supports natural gas exports and predicts the U.S. could become a net gas exporter by 2020. Moniz, who took over as energy secretary last year, has pledged to move "expeditiously" on pending applications to export natural gas.

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