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Ohio Utica Shale

Pennsylvania lawmakers are reportedly behind LNG exporting

By Bob Downing Published: January 10, 2013

From the Houston Chronicle via the Center for Liquified Natural Gas:

Houston Chronicle: Pennsylvania lawmakers make case for LNG exports

 

Pennsylvania state lawmakers eager to support natural gas drilling in the Marcellus Shale formation are pleading with the Obama administration to fast-track industry requests to widely export the fossil fuel.

 

In a letter to President Barack Obama, nine Pennsylvania House members and 18 state senators insisted that allowing those exports to Japan and other nations will sustain a domestic drilling boom, raise tax dollars and spur job growth across the United States.

 

“Selling (liquefied natural gas) into the global marketplace is not only necessary for businesses but would create more American jobs, increase demand and spur more production without significantly impacting domestic prices,” the lawmakers said.

 

The Pennsylvania lawmakers also insisted that if the government green lights exports of liquefied natural gas from existing receiving terminals and newly proposed plants, it would benefit the U.S. trade balance while “providing the world with increased access to a cleaner and more reliable source of energy” than coal.

 

The Pennsylvanians’ push comes as the Obama administration weighs whether to grant applications from 15 countries to export up to 21.5 billion cubic feet of natural gas daily to countries that don’t have free trade agreements with the United States.

 

Unlike oil, natural gas prices aren’t set on a global market, and the cost in some Asian and European markets can be three to five times higher than in the U.S. Natural gas producers are eager to tap into those lucrative new markets, and some analysts say that the new customers and competition will lift prices just enough to sustain drilling that could be non-economic otherwise.

 

But chemical and manufacturing industry leaders insist that if the Energy Department approves too many of those export licenses, natural gas prices would be pushed too high, jeopardizing some $90 billion in planned capital spending by the sector.

 

A government-commissioned study issued in December concluded that even unlimited exports would broadly benefit the U.S. with up to $47 billion in new economic activity. But that net positive benefit would come with some casualties, including price increases for companies that are big users of energy produced by burning natural gas or are heavily reliant on the fossil fuel as a building block for producing chemicals, fertilizers and other products.

 

American manufacturers currently enjoy a competitive cost advantage when it comes to the fossil fuel and producing energy-intensive goods, because of the relatively low price of natural gas in the U.S.

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