Study: Gas exports would drive up prices

  • Fri Jan 20th, 2012 7:31pm
  • News

Associated Press

PORTLAND, Ore. — A federal report that says exporting liquefied natural gas will drive up domestic energy prices is adding more fuel to the debate over building LNG terminals in Oregon.

A U.S. Energy Information Administration report says natural gas exports could amount to nearly one-fifth of daily U.S. demand, and that would drive up domestic energy prices significantly.

“Even while consuming less, on average, consumers will see an increase in their natural gas and electricity expenditures,” the report said, according to The Oregonian (http://bit.ly/zGPOf0).

The report estimates that from 2015 to 2035, on average, residential, commercial and industrial consumers would pay 3 percent to 9 percent more for gas, and 1 percent to 3 percent more for electricity.

Oregon has two LNG proposals, one in Coos Bay, and the other in Warrenton. They started out as import terminals, but with burgeoning supplies in the United States, they hope to switch to export outlets.

The U.S. Department of Energy has received applications to export as much as 12.5 billion cubic feet of natural gas a day — about 19 percent of daily U.S. demand. It approved an application last year by Cheniere Energy Inc. to convert an import facility in Louisiana to export gas. But it delayed other decisions until it could study the price impacts of boosting exports.

“There are huge environmental concerns about LNG in Oregon and the price impacts of exporting natural gas add a whole new dimension, from farmers worried about fertilizer prices, to manufacturers, to people paying their heating bills,” said Brett VandenHeuvel, executive director of the conservation group, Columbia Riverkeeper. “We have serious energy security issues in America, and exporting one of our cheapest sources is just foolish.”

Bob Braddock, the project manager of the Jordan Cove LNG project in Coos Bay, said the focus of the report appeared to be the Gulf Coast, and regional supply disparities were not taken into account.

Jordan Cove has contracted studies on regional economic impacts as part of a formal export application it hopes to submit to regulators late next month.