PITTSBURGH - Exporting natural gas overseas, as some companies are pushing for government approval to do, will significantly drive up prices in the United States, a newspaper reported Sunday.
The Pittsburgh Tribune-Review says prices of natural gas overseas are as much as triple those in the United States, and the largest expected customers for U.S. gas exports would include China and other Asian nations as well as Europe.
On May 20, the Department of Energy gave approval for Cheniere Energy Inc. to export 2.2 billion cubic feet of natural gas per day from its Sabine Pass, La., port terminal - the first approval of overseas export of U.S.-produced gas from the lower 48 states. Cheniere said declining prices of U.S.-produced natural gas had slowed drilling, and access to international markets would induce more drilling and boost U.S. employment.
While no one knows the amount that such exports would increase domestic prices for natural gas, since that would be affected by supply and amount of exports, the department cited a consultant's report submitted with Cheniere's permit application in estimating that natural gas prices in the U.S. would increase up to 11.6 percent when the Sabine terminal begins exports in 2015.
Two other concerns have requests pending before the Energy Department to export domestic gas. Freeport LNG Expansion LP, together with Liquefaction LLC, applied on Dec. 17 to export 1.4 billion cubic feet of natural gas per day from a terminal port near Freeport, Texas. Lake Charles Exports LLC, a subsidiary of British-based BG Group and Houston-based Southern Union Co., applied on May 6 to export 2.0 billion cubic feet a day from its Lake Charles, La., facility.
The Tribune-Review said those requests, if approved, combined with the Sabine permit would represent 8.4 percent of U.S. production. And at least two other companies have indicated they are considering similar applications.
