Will natural gas exports raise prices for consumers?

March 13, 2013

How much of the United States' newfound bounty of natural gas should stay at home, keeping prices low for domestic customers? How much should be earmarked for export in the form of liquefied natural gas (LNG), at the risk of making natural gas pricier? Those questions are the topic of the cover story in the current edition of Chemical & Engineering News (C&EN), the weekly newsmagazine of the American Chemical Society, the world's largest scientific society.

C&EN's Jeff Johnson and Alexander H. Tullo explain in the story that hydraulic fracturing and other technologies are boosting domestic supplies. By 2020, the U.S. actually may have a natural gas surplus, producing more than the total domestic consumption. Oil and gas companies already envision construction of about 17 new LNG shipping terminals, which could export LNG equivalent to fully one-third of current domestic consumption.

The article discusses conflicting views on how exports on such a massive scale might affect paid by consumers, including the chemical industry, which uses natural gas as a mainstay raw material. Exporters claim it will have little impact on domestic prices and will have beneficial effects of creating jobs and bolstering the economy. Consumers worry that exports will raise domestic prices, hike manufacturing costs and undercut their international competitiveness.

Explore further: Coal reemerges as important raw material in chemical manufacturing industry

More information: "The Gas Wars" Chemical & Engineering News.

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3 / 5 (2) Mar 13, 2013
"Consumers worry that exports will raise domestic prices"

Watch this hilarious video to see how concerned U.S. consumers are about rising energy costs.


So for an advocate of renewable energy - it is fascinating to watch the dilemma the energy companies now find themselves in. Natural gas companies are struggling to turn a profit with the price of gas so low, but if they make moves to become more profitable by pushing the price of gas up, they are undercut by the falling cost of renewables - see http://solartribu...3-02-21/

It looks like we are hitting the tipping point.

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