Low gas commodity prices are setting up a boom-and-bust cycle for the nation. California policymakers are unable to take action to help ameliorate the national dilemma. While economists in the rest of the nation grapple with how to sop up the flood of natural gas to balance prices and incent drillers to continue to produce, California\u2019s use of natural gas is maxed out, according to Ken Medlock, energy fellow, Baker Institute, Rice University--a gas consultant for the California Energy Commission. \u201cThe national concern doesn\u2019t apply\u201d to California, Medlock said. That national concern was highlighted in two reports last week--one from the Energy Information Administration, another from the Brookings Institute. In other parts of the country, coal plants can be switched to natural gas. Here, natural gas is already the feedstock for fossil power plants. Because the gas pipeline transmission is national, though, California consumers are likely to be buffeted by fluctuating gas prices while being helpless to do much--other than overheating. With the influx of shale gas into the nation\u2019s gas pipeline system, the price of gas is trading at Henry Hub this week for $2.60\/MMBtu. Henry Hub is the national price benchmark. At Malin, where gas comes into California from the north and east, the price this week was $2.70\/MMBtu. At PG&E Citygate in mid-California, the price was $3\/MMBtu. For the last decade, natural gas prices were above $4\/MMBtu. When gas prices hovered higher than $4\/MMBtu, unregulated companies, like Sempra LNG, invested in building liquefied natural gas terminals to import natural gas from other parts of the world. They planned to profit from freighting in highly-compressed gas in tanker ships to fuel California\u2019s pipelines. The whole concept of importing liquefied natural gas has been rendered economically obsolete, according to January data from the Brookings Institution and the Energy Information Administration. According to them, LNG terminals can use their facilities to export excess domestic natural gas in order to balance, or offset, pricing. If not, warn economists, the low price induces a lack of interest in investment to continue drilling for shale gas and the markets dry up. Commodity prices would then rise, creating a shortage--thus a boom-and-bust scenario. California\u2019s investor-owned gas utilities--SoCal Gas, San Diego Gas & Electric, and Pacific Gas & Electric--refused to grant interviews on the economic and policy ramifications. Even at current low prices, production is expected to outpace U.S. consumption for the next decade, according to the Energy Information Administration Jan. 23. The agency expects a 72 percent production increase. Brookings estimates that the available natural gas is 40 times greater than projected consumption. The federal government expects LNG exports will compensate for that beginning in 2016--moderating prices. The Center for LNG expects some of the excess to be absorbed by increased economic activity, according to a Jan. 20 statement. Moderating prices through exports is expected to come at a high cost for the terminal operators, according to Brookings. Brookings estimates for every liquefied natural gas terminal that re-tools to export gas--for instance, Sempra\u2019s Energía Costa Azul plant in Baja California, Mexico--it could cost between $2 billion and $8 billion. Sempra\u2019s LNG subsidiary is unregulated, so ratepayers would not be subject to those billions of dollars in investments. Ratepayers did, however, pay $14 million for a pipeline interconnection between Mexico and California to tap what was expected to be imported LNG. In related news, President Obama announced in his State of the Union address Jan. 24 that the administration is looking into the chemicals used to frack shale gas. That too may slow down drilling. Last week, two drillers publicly stated they are pulling back on excavation due to low price incentives, according to Medlock.