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Exporting Natural Gas: How Will It Affect You?

Natural gas production in the U.S. is taking off and the potential for liquefied natural gas, or LNG, exports is becoming more and more realized every day. Unless you have a job in the natural gas industry, though, it might be harder to see how this could benefit you. Although you might not see it right now, these events could have some significant effects on your wallet.

Abundant, cheap, natural gas has made a significant impact on how utility companies generate electricity and on how much that electricity costs the consumer. Southern Company (NYSE: SO  ) , a company that once generated more than 50% of its electricity from coal, is now the third-largest consumer of natural gas in the U.S. Major shifts like the one Southern enacted are occurring across the entire utilities space. The more options that utilities have in fuel sources, the better the prices they can get. 

But what about LNG exports? Will they send natural gas prices soaring? Motley Fool Special Ops analyst, Michael Olsen, certainly doesn't see that happening. With stiff competition from other sources of LNG, such as Australia and Qatar, and the expensive processing needed for LNG, the U.S. will need to rely on its one major advantage: cheap feedstock. When it's all said and done, natural gas prices will likely only go up by about 10% or so, thanks to LNG.

Tune into the video below to learn more about how natural gas affects you as Foolish investor. Analysts Michael Olsen and Joel South are joined by contributor Tyler Crowe to discuss this hot topic.

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  • Report this Comment On June 28, 2013, at 1:50 PM, grahamsway wrote:

    Exporting nat gas might be one of the worst things to consider for the US.

    First, it seems that everybody has decent pools of shale gas now accessible. Even Israel and Great Britain, who've never showed up near any energy production screen, have been reported to have serious amounts.

    Second, if we spend all the money and time building out the infrastructure we'll probably be forced to sell the stuff, probably at extremely low prices, reducing our inexpensive reserves for little profit.

    Third, it's not clear how wise shipping off our nat gas is. For instance say we now have 120 years of reserves at current demand. If we double demand, which is probable if we move 70% of coal fired electric use to nat gas and we bring in more and more transport use, that leaves 60 years or roughly one generation of cheap product even if we don't send LNG offshore. In two generations will we be needing to import LNG?

  • Report this Comment On June 29, 2013, at 5:08 PM, Itsjustmeagain wrote:

    Austrailia's labor costs are too hign now. They are looking to import, it's cheaper.

    Why do we insist on giving away our natural resources to corporations that do not care about US citizens. Creating jobs? Nonsense, the labor force to extract NG will be about the same. What jobs are they defending? People who own stocks and Corporate board members salary.

    We have a real opportunity to get out from under the oil traders thumbs, keep our resources here and develop new means of using NG. Many cities and trucking firms use NG, and the development of a highly useable auto is just around the corner.

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