* Report says the greater the exports, the more benefits
* Export application decisions after comment period-DOE
* Report confirms prices will rise for consumers-Lawmakers
* More than dozen companies waiting on export approval
By Ayesha Rascoe
WASHINGTON, Dec 5 A U.S. government-sponsored
report offered a strong endorsement for expanding liquefied
natural gas exports on Wednesday, saying that shipping the
nation's surplus gas abroad would clearly help the overall
economy even though it will cause domestic energy prices to
The report, which offers the Obama administration a basis
for possibly approving more gas export projects, examined the
impact of LNG exports in 63 scenarios and found exports to be
positive for the economy under each of the conditions.
"Moreover, for every one of the market scenarios examined,
net economic benefits increased as the level of LNG exports
increased," said the NERA Economic Consulting study,
commissioned by the Energy Department.
The Obama administration has wrestled with how to manage the
nation's newfound shale gas for more than a year, putting export
project approvals on hold pending the release of the economic
During that time, LNG exports have become an increasingly
hot-button issue, pitting manufacturers concerned that exports
will raise prices against gas drillers, which argue that exports
are necessary to keep production going strongly.
Lawmakers and industry leaders had been eagerly awaiting the
report, which is expected to help shape the administration's
response to more than a dozen proposed export projects.
But the report is still far from the end of the road for the
government's review process.
The department is now setting aside more than two months to
gather public input on the report.
Following the end of the comment period, the department said
it would begin to make decisions on the 15 queued applications
on a case-by-case basis.
Despite the high profile nature of the economic report, the
administration has stressed it will be only one of the factors
the department considers as it moves ahead with its review
process. Various groups, for manufacturers to
environmentalists, have attempted to make their views heard.
While gas exports would have a positive effect on the
economy overall, selling gas to foreign countries will raise
prices for consumers, the report said.
"Households will be negatively affected by having to pay
higher prices for the natural gas they use for heating and
cooking," the study found.
In addition, industries that rely on natural gas heavily
will face rises in their business costs, "which will adversely
impact their competitive position in a global market."
Teri Viswanath, an analyst at BNP Paribas, said futures
prices for 2015 delivery had risen as much as 14 cents
per million British thermal units following the release of the
report, as the market factored in possible expanded exports.
"There's not going to be a large price impact, but it's
another source of demand growth for gas," she said.
Leading U.S. lawmakers challenging gas exports honed in on
the report's findings that prices would rise.
Senator Ron Wyden, an Oregon Democrat and the incoming
chairman of the Senate energy committee, said the finding
confirmed his concerns about allowing more gas exports.
Wyden, along with Congressman Edward Markey in the House of
Representatives, has led the charge in Congress calling for a
pause in gas exports until the implications of sending gas
abroad could be fully studied.
"Regardless of this study's conclusions, Senator Wyden will
continue calling on the Energy Department to ensure that
unfettered natural gas exports don't harm U.S. consumers and
manufacturers," Wyden's office said in a statement.
Although energy costs will rise for some households, the
report said the increase in export revenues would offset this
and lead to increase real income for U.S. households.
Markey, the top Democrat on the House Natural Resources
committee, expressed concerns that the report may be
underestimating the negative impacts on American workers and
manufacturing because the analysis is based on "old data that
may understate industrial demand by 30 percent."
COMPANIES SEEK APPROVAL
Recent drilling innovations have unlocked vast shale oil and
gas reserves, placing the United States in a position to be a
major exporter. Several years ago the United States was thought
likely to be more and dependent on foreign gas.
Companies such as Dominion, Sempra and Exxon
Mobil have now lined up to get permission to sell the
country's cheap abundant natural gas overseas, where it can
fetch much higher prices.
The Energy Department's authorization is needed to export
natural gas to all but a handful of countries with free trade
Following its first and only approval a gas export terminal,
Cheniere's Sabine Pass, the Energy Department said it
would hold off on making any more decisions on projects while it
commissioned this study to help guide the review.
U.S. Senator Lisa Murkowski, the top Republican on the
Senate energy committee, said it may be time to revisit the
department's review process for exports.
"The conclusions in this report on the benefits to the
economy should inform the DOE approval process regarding
exports," Murkowski said.