Pennsylvania natural-gas producers are stepping up a campaign to lobby the White House to allow more fuel exports and accelerate drilling in the Marcellus Shale region.
Nine state representatives, 17 state senators, and the Pennsylvania Chamber of Business and Industry have sent nearly identical letters to President Obama urging him to expedite the approval process for exporting liquefied natural gas.
The U.S. Energy Department is considering whether to approve requests from 15 companies to begin exporting LNG to countries that don't have free-trade agreements with the United States, such as China, Japan, India and Germany.
The move to export gas got a lift last month, when a government-commissioned study concluded that exports could boost the U.S. economy by $47 billion by 2020, including new production and construction of export terminals. The study said exports would not dramatically increase domestic fuel prices.
On Tuesday, the Deloitte Center for Energy Solutions and Deloitte MarketPoint L.L.C. released a report that arrived at similar conclusions. It said anticipated exports would add about 15 cents to the price of 1,000 cubic feet of gas, or about 5 percent at current prices. The Deloitte report was conducted on behalf of Cheniere Energy Inc., an exporter.
The reports buttress the arguments of gas producers, which say that exports would spur more production, improve the trade balance, and strengthen ties with U.S. allies that consume imported natural gas. The losers would be competing exporters, such as Russia, because new American supplies would reduce prices in consuming nations.
"Russia appears to be particularly vulnerable, especially if U.S. LNG exports are sent to Europe," the Deloitte report said.
Deloitte called the move to export natural gas a "startling about-face" for a U.S. industry that less than a decade ago invested billions to build LNG import capacity to supplement the nation's waning gas supplies.
The industry's fortunes reversed after shale-gas producers deployed new extraction technologies like hydraulic fracturing that have dramatically increased domestic supplies, creating a glut and driving down fuel prices.
In their letters to Obama, the Pennsylvania legislators and the state business chamber said the industry's success has caused production to slow in Pennsylvania because supply has outpaced demand.
"Selling LNG into the global marketplace is not only necessary for businesses, but would create more American jobs, increase demand, and spur more production without significantly impacting domestic prices," said the 28 legislative signers, all but four of whom are Republicans.
The chemical and fertilizer industries, which are big consumers of natural gas, have opposed exports because they fear higher prices at a time they are undergoing a revival. Environmental groups also are opposed, because exports will require more drilling to satisfy demand.
Gene Barr, president of the Pennsylvania chamber of business, said his group supports exports even though some member companies' industries prefer to keep a lid on prices.
"We need to develop options for the industry to grow," Barr said.
Most of the proposed export terminals would be on the Gulf Coast or in the Pacific Northwest.
But Dominion Resources has proposed expanding its existing Cove Point import facility on Chesapeake Bay in Maryland, saying the terminal would be well-positioned to export gas extracted from the Marcellus Shale.
Last week, a Maryland judge denied a Sierra Club challenge to expanding the terminal. Dominion wants to export up to 1 billion cubic feet of gas a day from the site.
"We're pretty optimistic," said Daniel E. Donovan, a Dominion spokesman. The project is estimated to cost $2.5 billion to $3.5 billion.
Natural gas must be purified and super-cooled into liquid to be transported by ship. Upon arrival at destination markets, the LNG is converted back into gas.
Energy analysts expect the market for exports will ebb and flow depending on the margins between U.S. and global gas prices. As the margins narrow, export volumes would subside.