Dependence on liquefied natural gas will make California and the nation vulnerable to increased price volatility in natural gas and electricity markets, claims Energy Ventures Group in a report submitted to the Federal Energy Regulatory Commission this week in the Sound Energy Solutions (SES) LNG terminal case. LNG also will increase the nation?s trade deficit, which in turn will eliminate a large number of jobs, says the Washington, D.C.?based firm. California will be particularly vulnerable because the first West Coast LNG terminal that opens could quickly supply a large part?20 percent?of the state?s natural gas. According to the report, sponsored by Californians for Renewable Energy, price volatility will arise from a fundamental shift in how the energy industry provides ?pivotal? supplies of natural gas. Today, numerous firms supply gas from countless domestic wells. In contrast, increased LNG imports will quickly turn a few mega project operators into pivotal suppliers. Similar to the oil suppliers, they will also have a strong incentive to sell gas to the highest bidder. LNG contracts likely will give suppliers the ability to seek the highest price for gas, states the report. FERC, the California Public Utilities Commission, and other state agencies will have no say in how those ?shipments of LNG are allocated between countries or priced,? the report adds. Using U.S. Energy Information Administration projections, the report says the U.S. can expect to pay offshore LNG suppliers between $1 trillion and $4 trillion by 2025. A $4 trillion cash outflow would bring the nation?s trade deficit to its highest ever and eliminate hundreds of thousands of jobs, Energy Ventures asserts. The report also states that imported gas will make the nation more vulnerable to sudden supply disruptions, which would cause rapid price increases. Given the potential economic peril of increased LNG reliance, the report urges authorities to examine alternative energy supplies before approving new LNG terminals, such as the SES project in Long Beach. Lack of alternatives could result in short-term natural gas shortages if LNG infrastructure is not developed as quickly as assumed. FERC should examine how to develop more domestic resources, such as coal gasification and coal-bed methane, said Michael Boyd, Californians for Renewable Energy president. Otherwise, foreign LNG suppliers will be able to control the timing of natural gas deliveries to reap the highest prices. ?It makes us subject to manipulation,? he said. California LNG advocates agree with the report?s contention that alternative energy resources are needed, said Beth Miller, spokesperson for Californians for Clean, Affordable and Safe Energy. However, she added, they fear that energy prices may be higher and price volatility greater if LNG is not brought to market. ?The longer we wait, the closer we get to the point of almost securing problems for ourselves,? Miller said.