Forbes: LNG Exports Offer A Path Away From OPEC Domination Of Energy Markets

As a young adult, two choices exist: Camp Hydrocarbon or Camp Alternative Energy. If you do not completely align yourself with one group or, alternately, suggest making some bridge between the two, you are seen as a disloyal defector. But isn’t there an alternate way? Shouldn’t there be an alternate way?

I would argue that there is a third way, and that it can be found through the increased use of natural gas and the furtherance of liquefied natural gas (“LNG”) exports; we are merely failing to recognize the potential of these two components to cement the United States as a global energy frontrunner. The United States holds an enormous supply of natural gas and allowing LNG exports would result in increased market liquidity, thereby potentially lowering the risk and cost of capital for drillers. And now, perhaps more than ever, exporting LNG would promote the development of a domestic resource that could help make the United States immune to OPEC market manipulation.

Domestic and geopolitical dynamics make the situation ripe for harnessing the United States’ abundance of natural gas and consequently, exporting LNG. As the Deloitte 2014 Oil and Gas Reality Check states, the “changing supply-demand pattern will rearrange the order of fuels in the global energy mix in favor of natural gas.”   Studies indicate that domestic reserves may supply the United States for approximately the next eighty-five years at a consumption rate of 26 trillion cubic feet (“Tcf”) per year.

The practical benefits of LNG exports and unconventional gas development are indisputable. They will help produce liquidity in global LNG markets and provide other nations with additional natural gas resources, gradually opening foreign commodities markets. And, although LNG exports may cause marginal prices increases to domestic natural gas consumers, they will ultimately bring net economic benefits to the U.S. domestic economy. Some experts suggest that total export revenues could add up to $20 billion, which in 2010 and 2011 constituted approximately five percent of the current account deficit.

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