- WASHINGTON: Exporting the US natural gas surplus could add as much as 9 percent a year to prices of the fuel for consumers and industry over the next two decades, government analysts said in a report that could provide fodder for critics who want to keep the resource at home.
With US benchmark gas prices sinking to their lowest in a decade as a result of booming shale production, natural gas companies want to export some on the glut to higher-priced markets in Europe and Asia, but they need permission from the government.
The US Energy Information Administration said on average, consumers and industry would spend 3 to 9 percent more each year over a 20-year period on natural gas because of expanded exports.
On average, US consumers could see a 1 to 3 percent increase in their electricity bills between 2015 and 2035, the report said.
The report is likely to attract scrutiny in Congress, where members of both parties have expressed hope that ample supplies of cheap natural gas created by the shale boom could fuel industrial growth and create more jobs. Some Democrats in Congress have said they do not believe natural gas exports should be allowed if prices for consumers and industry rise as a result.
“Today is a wake-up call to American consumers and businesses who rely on natural gas that higher prices are on the horizon if we don’t keep our natural gas here in America,” said Edward Markey, a Democratic congressman from Massachusetts.
Industrial users, such as chemical plants, would see the biggest hike in prices due to exports, said the EIA, the statistical arm of the Energy Department.
“Natural gas expenditures increase at the highest percentages in the industrial sector, where low transmission and distribution charges constitute a relatively small part of the delivered natural gas price,” the report said.
Seven natural gas terminals, originally designed for imports, have asked the government for permission to export instead, an about-face made possible by the sharp rise in domestic production.
Cheniere Energy has received an export permit for its Sabine Pass terminal and has applied for another permit for a second project. Companies including Southern, BG, Dominion and Sempra are in the queue.
Advances in drilling techniques including hydraulic fracturing, or fracking, have unlocked vast amounts of natural gas for companies such as ExxonMobil, Chesapeake Energy, Anadarko and Devon Energy.
Proponents have argued that without exports, depressed prices will lead oil and gas companies to drill elsewhere, reducing production.
The EIA report showed that exports could bring dramatically higher prices at the “wellhead” for producers, especially at first, with average wellhead prices as much as 36 percent higher in 2018 if exports were aggressive. But the EIA said the impact on producer prices would moderate over time.
Industrial users would like to see prices stay low, arguing it is a better way to create US jobs.
The timeline for the Energy Department’s decision on whether exports are in the public interest was not clear.
The Energy Department has also commissioned a report from a private consultant on the net impact of natural gas exports on jobs and the economy.
That report, which also will feed into its decision, is due sometime in the first quarter.

