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Liquefied natural gas exports may dramatically raise prices. Natural gas prices could rise up to 50 percent or more in the coming decade if all the export terminal licenses now pending are approved, Sen. Ron Wyden (D-OR) said during a Nov. 8 hearing of the Senate Energy & Natural Resources Committee. A project planned in Oregon could contribute to higher gas prices on the West Coast, Wyden noted. Californians can expect the price of natural gas to rise 10 percent by 2015 when a newly licensed liquefied natural gas export terminal comes on line. Additional price hikes are likely with the opening of more export terminals to tap higher profits abroad for shale gas produced in the United States. The Senate Committee aired the potential impact of U.S. LNG exports in the face of dramatically increasing shale gas production. “North American natural gas prices are going to be tied to world natural gas prices,” warned Wyden, if terminals are approved. Today gas in the U.S. sells for $3.60/Mcf, according to the Energy Information Agency. In Asia it costs as much as five times more, Wyden noted. Ranking minority committee member Sen. Lisa Murkowski (R-AK) urged lawmakers not to intervene in the push to export LNG, but instead to let the market work. She cited benefits from exporting gas, such as new jobs and revenues for the nation. The discussion came as the Department of Energy is considering four export licenses. Combined with a license already approved for Cheniere Energy’s Sabine Pass Liquefaction facility in Louisiana, the plants could export 20 percent of the natural gas currently consumed in the U.S., according to Christopher Smith, deputy assistant secretary of energy for oil and natural gas. In light of a Cheniere study showing its own terminal would boost the price of domestic gas 10 percent in 2015--and keep the price up by at least 7 percent through 2035, even as domestic gas production grows--Smith said DOE is doing two comprehensive studies on the impacts of exporting LNG on the nation’s economy. He noted that the American Public Gas Association and Industrial Energy Consumers opposed the license for Cheniere on grounds it would be detrimental to the nation’s energy security. DOE ruled otherwise. Smith admitted “the cumulative impact of Sabine Pass and additional future LNG export authorizations could pose a threat to the public interest.” Once built, Sabine alone will be capable of exporting about 10 percent of the gas now consumed in the U.S. each day, Smith said. On the other hand, Smith noted that LNG exports could improve the nation’s balance of trade, create jobs, and fuel economic growth. A Shell executive told lawmakers the large amount of shale gas now available in the U.S. means there’s plenty of the fuel to go around, both for new uses domestically and for export. Shell business environment advisor for upstream Americas, Andrew Slaughter, told the committee his company is eyeing opening a new plant to turn gas into chemicals in the U.S., as are numerous other companies. In addition, he raised the prospect the U.S. could see the energy industry build gas-to-liquid fuel conversion facilities in the coming years that dampen the need to import oil to make transportation fuels. In counterpoint, American Public Gas Association representative Jim Collins urged a halt to export licensing. He said for the first time in 20 years the American public stands to benefit from low and stable gas prices due to abundant shale gas. He called the main motivation for exporting gas "short term profits."

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