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Get Ready for Higher Prices and Less Energy Security: Our Natural Gas Reserves Are Being Plundered For Export

A deeply flawed study that ignores the harmful environmental and health impacts of gas drilling is being used to rally for exports.

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Exporting LNG to the highest bidder overseas would greatly benefit the profits of gas companies and also some companies involved in its export. But many experts agree, and multiple studies reveal, that it would have the dual effect of raising prices domestically to levels that would both hurt consumers and all other energy-intensive sectors of the economy.

"If we are forced to pay $12 to $16 per Mcf, well, then our economy's going bust," Patzek said.

"I don't know of anybody who's studied this who doesn't acknowledge that prices will go up," said Art Berman, an oil and gas geologist who heads the Houston-based geological consulting firm Labyrinth Consulting. "So if we lock ourselves into 20-year contracts to export X number of billions of cubic feet a day, well, that's going to increase the price. And that's really what it's all about."

Berman's research on actual U.S. shale well production, as opposed to mere projections, has led him and others to question industry and government mantras boasting of America's ever-abundant supply of natural gas reserves. With industry and government projections upward of 100 years of untapped domestic natural gas, Berman, based on the rate of returns from drilled shale plays across the nation, estimates that a more realistic number would be around 20-25 years of supply.

That's without factoring in the impact on supply if the U.S. becomes a major exporter. Patzek said industry and government projections of natural gas reserves are merely "speculation," which is why the use of this resource demands "moderation." Using these reserves in moderation, he said it's probable that several decades of untapped domestic natural gas remains. But what's undeniable, he added, was that opening our supply to limitless exports would force the U.S. to deplete these finite reserves faster, needlessly squandering them.

"How does exporting a strategic natural resource make you more energy independent?" Berman said in an interview with AlterNet. "If you're selling it to somebody else, then by definition you're decreasing your own supply."

He continued, "Signing long-term contracts that require you to export natural gas, if anything, only decreases your energy independence."

Eben Burnham-Snyder, a spokesman for House Natural Resources Committee Ranking Member Rep. Edward Markey (D-Mass.), agreed.

"Every single analysis of natural gas exporting has concluded that domestic prices will increase," Burnham-Snyder said in an email to AlterNet. "That's based on basic economic theory."

He continued, "Sending more of our natural gas resources abroad, instead of keeping more of it here for consumers and manufacturers and providing a diverse energy supply, is not a policy to make us more energy secure...[it] makes us less independent, not more."

Berman added, "These companies have stupidly, imprudently overproduced their own product to the point they can't make money at the price they've created themselves. So now they're looking for a solution to that problem, and they've managed to convince a number of idiots in Congress that this is a good idea."

No congressional supporters contacted by AlterNet would explain how exporting natural gas would, in turn, increase the country's energy security and energy independence.

Supporters Rally Around "Seriously Flawed" Study

Congressional supporters of unfettered natural gas exports were buoyed by last year's economic impact study commissioned by the Department of Energy. The report, conducted by the outside firm NERA Economic Consulting, concluded that although domestic natural gas prices would rise moderately and some sectors of the economy, such as manufacturing, would be adversely affected, the "U.S. would experience net economic benefits from increased LNG exports."

Following its release, 110 bipartisan members of the House of Representatives fired off a letter urging Energy Secretary Steven Chu to hasten approval of all LNG export permits.

 
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