News Column

Natural Gas Exports Spark Possibilities, Concerns

May 21, 2013

Isaac Cohen --

Natural gas well
Natural gas well

The debate on the costs and benefits of exporting some of the abundant natural gas available in the U.S. is coming to an end.

Last week, the Department of Energy issued a permission to export liquefied natural gas to Japan.

That country has no free trade agreement with the U.S., but demand for natural gas has increased in Japan, as most of its nuclear plants were shut down after the tsunami of March 2011.

This is only the second license to export granted to a company known as Freeport LNG, located in Quintana Island, Texas. Freeport LNG was built as an import terminal five years ago, when there was concern about scarce domestic supplies of natural gas.

Now, given the abundance of natural gas opened up by the new technologies of hydraulic fracturing ("fracking") and horizontal drilling, the plant will be converted at a cost of $10 billion into an export terminal.

Since new technologies pushed the U.S. into the ranks of the world's top producers, there has been a debate about the merits of exporting some of the abundant natural gas.

The debate confronted, on one side, an alliance of domestic consumers, mainly manufacturers and environmentalists concerned about the impact of exports on domestic prices and on the environment.

On the other side are supporters of free trade and the potential exporters, who want to benefit from the higher prices of natural gas in Europe and Japan.

Isaac Cohen is an international analyst and consultant, a commentator on economic and financial issues for CNN en Espaņol TV and radio, and a former director, UNECLAC Washington Office.


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