The size of the benefit to US consumers of the natural gas glut has been huge, and some of the biggest beneficiaries are wary of the push for export, worried that it will mean higher prices from them. Back in March, the CEO of Dow Chemical said:
He urged the U.S. to set a national energy policy that limits exports of gas in the form of LNG.
He wants to utilise cheap gas to make higher value products for export. The Industrial Energy Consumers of America take the same view:
As more and more LNG cargos are shipped from the U.S., it increases the potential for domestic natural
gas to be priced like crude oil is today, on international demand. It is NOT in the public interest to pay
higher natural gas prices when demand for natural gas from the Far East increases.
The natural gas producers disagree, they would like to get something closer to world prices for their product. Likewise those who invested vast sums in building LNG import infrastructure would like to be able to get a payback, and converting their terminals into export capable assets seems like the only option.
Aside from the issue of one group of lobbyists trying to gain at the expense of another, how big is the proposed LNG export risk / opportunity?
By my calculation, we are only looking at an export volume of maybe 15% of the total US consumption. Bearing in mind the business model of these terminal investments, they will probably almost never be utilised 100%, as they are selling the right to throughput capacity rather than natural gas. So when US gas prices are low, they will be the swing producer.
Given the vast potential of the big shale plays, 15% increase in demand, does not sound too serious to me.