Department of Energy will continue to put off decision on LNG export permits


Increased exports of natural gas have a mixed effect on the U.S. economy.

As we discussed in a recent blog post, there is an ongoing debate regarding the option of increasing U.S. exports of liquefied natural gas (LNG).

Specifically, numerous companies have requested permission to begin shipping LNG to countries with which the United States has not signed free trade agreements. Prices are comparatively high overseas, which means more exports would bring profits for firms in the industry and encourage them to step up their production, spurring job creation and economic growth.

However, there is a risk that exporting U.S. supplies will result in utilities and manufacturers paying higher prices for the substance. A study commissioned by the Energy Department last year found that allowing large-scale gas exports would be beneficial for the U.S. economy, even if it ultimately resulted in domestic consumers paying higher prices.

However, some have taken issue with the finding. Senate Energy Committee Chairman Ron Wyden has called the study "flawed" and asserted that it was based on old data and unrealistic assumptions about market conditions.

On Tuesday, newly confirmed Energy Secretary Ernest Moniz told reporters that he intends to review the department's study, as well as others conducted by outside stakeholders, before making any final decisions regarding the roughly 20 pending export applications.

If a significant increase in exports is approved, domestic producers will need to maximize output to make the most of the lucrative opportunity. Implementing advanced production equipment such as hydraulic jet pumps is one of the best ways for well operators to optimize recovery rates from their properties.