Executive Summary
The United States faces a critical decision about whether to export natural gas following
the rapid expansion of domestic production in recent years. The Department of Energy has
already approved one export application and is currently considering eight others. If these
applications are approved and the companies export at full capacity, the United States could soon
be exporting more than 20 percent of current consumption. The Energy Information
Administration has estimated that exporting even less natural gas than what is currently under
consideration could raise domestic prices 24 to 54 percent, which would substantially increase
energy bills for American consumers and could potentially have catastrophic impacts on U.S.
manufacturing.
In a February 24th letter to Massachusetts Congressman Edward J. Markey, Department
of Energy (DOE) official Christopher Smith made clear that no additional export permits will be
approved by the Department at least until an additional evaluation of the macroeconomic impact
of these prospective exports is completed and reviewed by DOE this spring. 1 This decision
represents an important deliberative step that ensures deeper consideration will be given to the
ramifications of energy exporting.
In examining energy markets and the impacts of higher natural gas prices, the House
Natural Resources Democratic Staff found that:
Unlike the oil market, natural gas prices are not determined on a global market. Natural
gas prices in Europe and Asia are 3 to 7 times higher than in the United States. This
provides the American economy with a competitive advantage in the manufacture of
energy-intensive goods.
From 2000 to 2008, the price of natural gas rose more than 400 percent, and was a major
contributor to the U.S. manufacturing sector losing 3.7 million jobs. While larger
macroeconomic forces were also at work during this period, it is clear that the cost of
natural gas for industries like steel, plastics, chemicals, paper, glass, fertilizer, cement,
and refining is a very significant determinant in whether facilities are sited domestically
or overseas. Keeping American natural gas resources in America and keeping prices low
will support a more diversified domestic economy and provide greater domestic job
benefits than pursuing an export strategy.
Keeping natural gas resources at home will allow greater amounts of natural gas to be
used in the domestic electric power and transportation sectors. Greater natural gas
utilization in these sectors could lead directly to a 1.2 million barrel per day reduction in
1
Included as an appendix to this report.
1
Background
On June 10, 2003, the Chairman ...
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