EIA: More Exports Would Boost U.S. Natural Gas Prices
Friday, January 20, 2012
The U.S. Energy Information Administration (EIA) said that allowing increased natural gas exports would boost domestic production and prices - but undercut demand.
Currently, very small volumes of gas are exported. Booming shale drilling has resulted in a production surplus and fresh proposals for liquefied natural gas exports. The Department of Energy, which has regulatory authority over energy exports, requested the EIA analysis.
The EIA said if exports grow, the market would balance. Shale production, along with a small rise in Canadian imports, would satisfy about 75% of the exported volumes. The rest would be from the price-induced reduction in domestic consumption.
It explained that higher prices would prompt the electric power sector to shift toward more generation from coal and renewables. Gas usage in other sectors also would drop due to price-induced efficiency improvements and conservation.
Although using less gas, consumers would pay more. From 2015 to 2035, the bills of residential, commercial, and industrial consumers would be 3% to 9% higher than they would be without higher gas exports, the EIA said.
For more information: www.eia.gov