Everyone’s aware of the enormous backlash from environmentalists over the effects of drilling for natural gas. Hydrofracking has been said to cause earthquakes, pollute the water and even warm the earth.
But there’s another, more important fight brewing over the future of the country’s fastest-growing industry.
A study released Thursday by the Energy Information Administration concludes that allowing natural gas exports to increase could cause domestic prices to surge as much as 54 per cent, as early as 2018.
Bloomberg reports that as Congress reviews new export permits, leading members have voiced concern about new approvals.
The U.S. may be “trading away the enormous economic advantage of having large, low-cost domestic natural gas supply,” Sen. Ron Wyden of Oregon told Bloomberg.
Economics 101 says that’s not a surprising find — prices must increase eventually. But the study sets the stage for a fight that will determine just how fast they’ll rise.
In May, according to Lou Kilzer of the Pittsburgh Tribune-Review, the Department of Energy quietly gave approval for Houston-based Cheniere Energy Inc. to export 2.2 billion cubic feet of natural gas per day from its Sabine Pass, La., port terminal — the first time the government granted permission to export American-produced gas overseas from the lower 48 states.
But T. Boone Pickens told Kilzer that allowing exports would cripple consumers and amount to a natural security issue.
If we do it, Pickens said,”we’re truly going to go down as the dumbest generation.”
“It’s bad public policy to export natural gas — a cleaner, cheaper domestic resource — and import more expensive, dirtier OPEC oil,” he said.
Were exports limited to 6 billion cubic feet and phased in over six years, prices would only rise up to 14 per cent by 2022. Boosting exports to 12 billion cubic feet over four years would drive prices up 36 per cent in 2018, the report stated.
The Natural Gas Act states the Department of Energy must grant a permit “unless it finds that such action is not consistent with the public interest.”
The EIA study seems to make a strong case that fast-tracking permits would not be.