Wednesday, March 7, 2012

USA Export LNG = key risks

The greatest risks to the USA in becoming an export LNG producer are: a) continued dependency on coal as a primary power producing feedstock, under-investment in natural gas fired power production, c) higher power prices, and d) under-investment in renewables.

"Due to higher prices, the electric power sector primarily shifts to coal-fired generation (major pollution and climate change offender), and secondarily to renewable sources, though there is some decrease in total generation due to the higher price of natural gas," EIA added. "There is also a small reduction in natural gas use in all sectors as a result of efficiency improvements and conservation."

Of course if you are a natural gas producer accessing the LNG market is enticing as it is oil linked and today commands about 6x premium over US spot market.




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