Another Reason the U.S. Should Export Natural Gas

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Unconventional natural gas production has created a large surplus of the commodity in North America, dropping prices from $12 per MMBtu in the summer of 2008 to under $2 per MMBtu last summer. 

With international natural gas prices up to four times more expensive than domestic prices, significant profits can be had if the United States exports its surplus natural gas to these high-priced markets. However, opponents of exporting liquefied natural gas, or LNG, are quick to point out that cheap natural gas could be used to make the United States' manufacturing sector more competitive.

In the following video, Motley Fool energy analyst Joel South discusses a recent Energy Information Administration survey showing that U.S. manufacturing is increasing energy efficiency. With energy intensity dropping, is the country better off exporting the excess natural gas? A recent Deloitte study estimates the price increase due to exporting LNG would be insignificant, and since natural gas is a regionally priced commodity, the areas that would experience slight pricing pressure would be around shipping terminals, where gas is traditionally more inexpensive.


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The article Another Reason the U.S. Should Export Natural Gas originally appeared on Fool.com.

Joel South has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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