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Will the US Export Natural Gas?

At the Southwestern Energy Co., natural gas production site, water and sand are mixed and then pumped through the tubes at pressures over 6,600 psi into the well during fracture stimulation, at the Marcellus Shale formation in Camptown, Pennsylvania, U.S.
Julia Schmalz | Bloomberg | Getty Images
At the Southwestern Energy Co., natural gas production site, water and sand are mixed and then pumped through the tubes at pressures over 6,600 psi into the well during fracture stimulation, at the Marcellus Shale formation in Camptown, Pennsylvania, U.S.

The North American natural gas boom has made the U.S. the biggest natural gas producer in the world with the cheapest gas, but whether it becomes a big exporter is yet to be seen.

The Department of Energy has a number of applications pending for liquefied natural gas export terminals, and it will decide on them following review of a study now underway on the impact on the U.S. GDP, gas supply and U.S. gas prices, according to Department of Energy Deputy Secretary Daniel Poneman.

Poneman said completion of the study is "months" away and that it would also take into consideration such factors as the impact on employment. Poneman was speaking at the annual CERAWeek energy conference in Houston.

But Anadarko Petroleum CEO James Hackett, in an earlier session at the conference, said he would not count on the U.S. becoming a major exporter. But "I hope we do some of it," he said Wednesday.

"When you are drilling wells by someone's home in Pennsylvania, it's going to be difficult…to export that to another country," he said.

The natural gas boom is a beneficiary of a technology called hydraulic fracturing or "fracking", a process using highly pressurized water, sand and chemicals to release gas that was otherwise unattainable. Fracking and horizontal drilling have turned the U.S. from a potential importer of gas to now a possible exporter in just a few short years.

Fracking has been criticized for potential environmental impacts, including water pollution, methane leaks and seismic activity. Poneman said companies should disclose components of chemical content used in fracking as some do now.

Hackett also said the industry should be proactive in taking steps to address the environmental debate. "we need to make sure we lead with science," he said.

U.S. natural gas is an attractive export, especially since the gas that now trades at $2.50 per million BTUS in the U.S. is $9 in Europe and as much as $16 in Asia, according to Centrica.

Follow Patti Domm on Twitter: @pattidomm

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