The United States is not the only nation with abundant shale gas reserves. However, we do have significant advantages that will take competitors many years to overcome, such as best-in-class technology, gas processing and pipeline infrastructure developed over decades, a financial system that matches capital with promising investment opportunities, well defined mineral ownership, and a mature legal system. Other nations are already at work trying to duplicate the success of America’s shale industry. These advantages won’t last forever.
In the wake of the DOE report and the realities of today’s natural gas market, we believe now is the time to expand domestic exportation of LNG. We respectfully urge the Administration to advance without delay through the comment period and toward approval of export permits to non-Free Trade Agreement (FTA) countries.
The lawmakers have thus far gathered 39 signatures from a bipartisan, nationwide group of lawmakers, according to an aide.
The letter is part of a wider political and lobbying battle over gas exports and the DOE-commissioned report, which was conducted by NERA Economic Consulting.
The oil-and-gas industry and other export advocates are pressing for approval, calling expanded exports a way to wring more economic benefit out of the nation’s natural-gas boom.
But the study, which predicts some price increases but an overall economic benefit, has drawn pushback from a pair of senior Capitol Hill Democrats: Sen. Ron Wyden (D-Ore.) and Rep. Edward Markey (D-Mass.).
They say NERA underestimated the impact of expanded exports on consumers and energy-thirsty manufacturing industries that have benefited from low-cost domestic gas.
A few big chemical and manufacturing companies, including Alcoa and Dow Chemical, that are wary of large-scale exports are also attacking the report.
But the letter that Johnson and Ryan are circulating say U.S. gas consumers will continue to see a price advantage even if exports go forward. It states:
We note that the Department has already indicated that it intends to monitor the market so that “natural gas exports do not subsequently lead to a reduction in the supply of natural gas needed to meet essential domestic needs.” As supplies tighten and prices adjust to sustainable levels, less gas would be exported. Further, the NERA report estimates the total cost to transport gas to an export terminal, liquefy, ship, and then regasify it overseas would range from $6.30 to $8.39. In other words, the difference between the price of gas in the U.S. and internationally would need to be at least that much higher in order to justify its export. That price differential is a significant cushion against domestic prices climbing to a “world price.”