As American natural gas production continues to increase, the U.S. Department of Energy (DOE) is considering a greater number of applications from companies interested in exporting liquefied natural gas (LNG). At the same time, the Federal Energy Regulatory Commission (FERC) is seeing more applications from companies seeking to build new LNG export terminals and liquefaction facilities. Currently, the U.S. only exports LNG internationally by exporting natural gas imported from other countries, a practice that increased in 2011.

Potential Export-Oriented Natural Gas Liquefaction Facilities, as of 3/30/2012

So far, nearly all applications to export U.S. LNG to Free Trade Agreement (FTA) countries – eighteen countries including Australia, Canada, Chile, Israel, Jordan, Korea, Mexico, and Oman – have been approved by DOE, while several applications to export to non-FTA countries remain under review. According to EIA, most FTA countries do not have significant LNG import markets. To date, only one facility – headed by Sabine Pass Liquefaction, LLC – has been approved by both DOE and FERC, and to export to both FTA and non-FTA countries.

Natural gas prices are low in the U.S., and have been trending lower, and U.S. producers are keen to sell into international markets, where prices are considerably higher. However, some U.S. power utilities and manufacturers are concerned about efforts to export LNG, as it has the potential to add 3–9% to natural gas prices per year, according to EIA.

Are you concerned or enthusiastic about U.S. LNG exports? How might the U.S. optimize the balance of interests between energy developers looking to sell internationally and domestic consumers who rely on low natural gas prices?

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