Push to export US natural gas raises cost, 'fracking' worries

2013-05-13T00:00:00Z Push to export US natural gas raises cost, 'fracking' worriesThe Associated Press The Associated Press
May 13, 2013 12:00 am  • 

WASHINGTON - A domestic natural gas boom already has lowered U.S. energy prices while stoking fears of environmental damage.

Now U.S. producers are poised to ship vast quantities of gas overseas as energy companies seek permits for proposed export projects that could set off a renewed frenzy of fracking.

Expanded drilling is unlocking enormous reserves of crude oil and natural gas, offering the potential of moving the country closer to its decades-long quest for energy independence. Yet as the industry looks to profit from foreign markets, there is the specter of higher prices at home and increased manufacturing costs for products from plastics to fertilizers.

Companies such as Exxon Mobil and Sempra Energy are seeking federal permits for more than 20 export projects that could handle as much as 29 billion cubic feet of natural gas a day.

If approved, the resulting export boom could lead to further increases in hydraulic fracturing, a drilling technique also known as fracking.

It has allowed companies to gain access to huge stores of natural gas underneath states from Colorado to New York, but raised widespread concerns about alleged groundwater contamination and even earthquakes.

The drilling boom has helped boost U.S. natural gas production by one-third since 2005, with production reaching an all-time high of 25.3 trillion cubic feet last year, according to the U.S. Energy Information Administration.

In recent months, however, production has begun to level off as the glut of natural gas keeps U.S. prices down. In response, producers have begun pushing to export the fuel to Europe and Asia, where prices are far higher.

Approval of all the projects currently under review by the Energy Department could result in the export of more than 40 percent of current U.S. production of liquefied natural gas, or LNG, which is gas that's been converted to liquid form to make it easier to store or transport.

The prospect of a major expansion of U.S. gas exports has tantalized business groups and lawmakers from both parties, and they're urging the Obama administration to move faster to approve the projects as a way to create thousands of jobs and spur economic growth. Increased exports also would help offset the nation's enormous trade deficit.

The administration has not said whether it will approve the projects. The issue is among the main challenges for Ernest Moniz, President Obama's nominee to be energy secretary.

Federal law requires the Energy Department to determine that projects are in the public interest before granting export permits to countries that do not have free-trade agreements with the U.S.

A recent study commissioned by the department concluded that exporting natural gas would benefit the U.S. economy even if it leads to higher domestic prices for the fuel, as is likely.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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