Exporting American-Made energy overseas?
Thanks to recent reports, it is even more clear that Big Energy companies are undermining America's push for energy independence. By the close of this week, energy companies have been given license to export about ~10% of all the gas produced daily in America. Why? Because U.S. gas prices are the lowest they’ve been in 10 years, while prices in Europe and Asia are 3 to 6 times more expensive. To make more money, these energy companies want to sell to the highest bidder – even if it drives up energy costs here domestically.
How’s that for a move toward energy independence!?!
We’re so troubled by this that we’ll say it again:
The U.S. government is allowing the export of American-made energy when we’re using (and needing) more and more energy each year. When you’re striving to wean yourself off of foreign energy, one would think the first thing you’d do is stop sending your own supply overseas!
Will these Exports Impact the US Economy?
This week, the Department of Energy’s “Energy Information Administration” (EIA) completed a study as to how these exports of US gas will impact prices of natural gas and electricity for Americans when the first export facilities are completed and come online (first exports expected in 2015).
In this report (found here), the EIA clearly, and unambiguously states that “Increased natural gas exports lead to increased natural gas prices.”
Additionally, the EIA found that the increases in “shale gas” [Marcellus Shale for example] production and more reliance on coal for power generation will also follow once LNG Exports begin. This chart below (showing, under four export scenarios, the price of wholesale natural gas) illustrates how energy prices could be as much as 54% higher in 2018, a few years after these already approved exports start heading overseas.
|Natural gas wholesale price changes for four export scenarios. EIA report. |
NOTE: in all four scenarios, our prices go up when the DOE allows exports!
Specifically, the EIA came up with these impacts from LNG exports:
- There will be an "increase by between 0.14 and 0.29 cents per kilowatthour (kWh) (between 2 and 3 percent)" in electricity costs by end-users;
- Over the next 20 years, “total U.S. end-use electricity expenditures as a result of added exports…increase between $5 billion to $10 billion” while gas export companies make an extra “$14 billion [to] $32 billion” in revenue because of these overseas export sales; and
- "Coal producers benefit from the increased coal demand" as power plants switch from gas to coal due to rising costs - over the first 20 years of exports, coal revenues increase by at most 6.2 percent,
Basically, as we export up to 10% of all the gas we produce in the US daily, natural gas and electricity costs to consumers will go up, revenues to both coal and natural gas companies will go up, and our energy independence potential will go down.
On top of this report, the DOE this week approved an eighth license to export American-produced domestic natural gas. For a complete list of export applications and the status of each (as of December 22, 2011) click here.
To read more (from our post last November on this energy export issue), click here