UPDATE 1-U.S. lawmaker calls for new natural gas export study

Mon Dec 17, 2012 12:47pm EST

* Rep. Markey says report fundamentally flawed

* Gas export report used 2-year-old data

* New analysis needed with more recent data-Markey

By Ayesha Rascoe

WASHINGTON, Dec 17 (Reuters) - A government-sponsored study that found natural gas exports would benefit the U.S. economy was deeply flawed and should be repeated with more recent data, a key Democratic lawmaker said on Monday.

The NERA Economic Consulting study, commissioned by the Energy Department, gave a resounding endorsement of the economic benefits of unlimited exports when it was released earlier this month.

But, Representative Edward Markey of Massachusetts said the report relied on government estimates of U.S. natural gas demand from two years ago when the full implications of the shale gas boom were not understood.

"I was disappointed to find fundamental flaws with the study that I fear may have led to conclusions that severely underestimate the negative impacts of large-scale natural gas exporting," said Markey, an outspoken critic of liquefied natural gas exports, in a letter to Energy Secretary Steven Chu.

Markey, the top Democrat on the House Natural Resources Committee, called for analysis of the most up to date gas demand data by NERA's model and for a more detailed look at the effects of gas exports on U.S. employment.

The study also failed to compare the benefits of exports versus the benefits of industrial use of cheap natural gas, Markey said.

The nation's shale gas boom has sparked debate among policy makers about whether the nation should use its newfound energy bounty domestically to keep prices low or export surplus gas to help support growing production and create new jobs in the industry.

So far, the Obama administration has attempted to balance these opposing arguments while also fielding input from others, including environmental groups.

Natural gas exports to all but a handful of countries with free trade agreements require authorization from the Energy Department.

After approving exports from Cheniere's Sabine Pass terminal, the department put decisions on more exports on hold for more than a year pending the release of the economic study.

With the report now out, the department has stressed the study would be only one of the factors the government would consider as it weighs 15 export applications, and the agency is not bound by the NERA findings.

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