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A recent study carried out by NERA Economic Consulting on behalf of the US Energy Department has found that the economic benefits of exporting its cheap and abundant natural gas in the form of LNG far outweigh the negative potential of an increase in prices for domestic consumers.
Already more than a dozen LNG projects have been proposed by various energy companies across the US, all planning to export to Europe and Asia where gas commands a far higher price, however the White House has always been very reluctant to approve any of these projects and create a huge natural gas export market for fear of causing domestic utility bills to increase.
Related Article: Former Enemies Japan and Russia to Trade LNG?
Yes domestic prices are bound to increase a little, but the investment and jobs created by building large LNG terminals, along with the export earnings more than make up for a small increase in price.
Most Americans would be much better off.
Of all of the applications, only one LNG export terminal has been approved, that of Cheniere Energy (LNG) in Louisiana. Now that the report has been published many more projects are expecting to receive approval.
It was predicted that natural gas exports could generate $47 billion of economic activity in 2020, by which time several new LNG terminals would be in operation.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com