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Export of liquefied natural gas from Texas and Louisiana would raise Lower 48 gas prices by 52 cents to $1.34 per thousand cubic feet, a new report from the U.S. Energy Information Administration concludes.

The degree of price increases would depend on how much LNG was exported and how quickly LNG plants ramped up, the EIA said. The Energy Department research arm estimated the Henry Hub natural gas benchmark price for the Lower 48 would range between $5.69 and $6.51 per thousand cubic feet on average between 2015 and 2025 if exports occur, compared to $5.17 if no exports are allowed. All prices are in 2009 dollars.

Besides price, LNG exports would cause more shale gas to get produced to replace the exported gas, slightly raise U.S. imports of Canadian pipeline gas and slightly lower the growth in gas-fired electricity generation, the EIA said.

The EIA conducted its study as the Energy Department deals with applications from eight companies seeking permission to export up to 12 billion cubic feet a day of LNG - almost one-fifth of current U.S. natural gas production. The department already has approved a separate LNG export application involving up to 2.2 bcf a day. Some manufacturers that consume natural gas oppose the exports. Besides examining price and production in the new report, the EIA is studying how LNG exports could affect the overall U.S. economy, and it expects to finish that analysis in March.

To isolate the Lower 48 as a market, the EIA did not include gas from a possible Alaska natural gas pipeline in its analysis.

Read the report >

-By Bill White, Researcher/Writer for the OFC. bwhite@arcticgas.gov

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