U.S. natural gas: To export or not export?

A new government report says that the U.S. should export more of its natural gas to boost the economy, but is there enough demand overseas?

The U.S. should export much more of its plentiful supply of natural gas. That’s the conclusion of a government study out today.  The study by NERA Economic Consulting found that more gas exports could give the U.S. economy a major boost without significantly raising energy prices at home.  

But is there a market for U.S. natural gas abroad?

Leo Drollas, head of the Centre for Global Energy Studies in London, believes so. He says the American product costs a third of what European and Asian consumers have to pay, and that it's an increasingly popular fuel:

“There is certainly demand for gas across the world,” says Drollas, “It’s the in-vogue fuel because of its carbon dioxide emmissions being much lower than coal and oil.”

Japan is eager to diversify away from nuclear power after the Fukushima disaster and Europe would like to reduce its dependence on Russian natural gas.   

If the U.S. does enter the export trade in a big way it will reshape the global energy market. But the bigger question for America is whether it agrees with today’s report that increased exports will not also push up the price of natural gas at home.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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