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    US trade group calls for cut in LNG exports amid price spike


The US economy, consumers and national security should take priority over LNG export profits, the Industrial Energy Consumers of America said.

by: Joseph Murphy

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Natural Gas & LNG News, Americas, Liquefied Natural Gas (LNG), Corporate, Import/Export, News By Country, United States

US trade group calls for cut in LNG exports amid price spike

The Industrial Energy Consumers of America (IECA) has called on the US government to order LNG producers to cut exports, to avoid a gas supply crisis and a price spike this winter.

In a letter to US energy secretary Jennifer Granholm, IECA said the move was needed to allow US gas inventories to reach the five-year average level. "US consumers, the health of the economy, and national security should take priority over LNG export profits," the association, which represents manufacturers with $1 trillion in annual sales and over 1.7mn employees worldwide, said.

The government should also place a hold on all existing, pending and prefiling permits in US lower 48 states, IECA said, and review whether these projects are in the public interest.

"We are certain that they are not," the association said.

The US Henry Hub winter strip gas price is currently at $5.50/mn Btu, more than double the level a year ago, costing US consumers some $109bn on an annualised basis, IECA said. Meanwhile gas stocks are at 7% below the five-year average for this time of year. Prices would need to reach $10/mn Btu to provide an incentive to producers to meet domestic gas demand, it said.

"Excessive LNG export volumes are inflationary and threaten the competitiveness of trillions of dollars of manufacturing capital assets, millions of jobs, and economic growth by driving up the cost of natural gas, natural gas liquids feedstock, and electricity," IECA said. "This also presents a threat to reliability, national security, and is a cost and human safety issue."

The US currently has 11.1bn ft3/day of LNG export capacity in operation, and a further 8.4bn ft3/d approved and under construction. IECA called on the government to put a hold on the additional 23.9bn ft3/d of projects approved but not yet under construction, as well as the 3.0bn ft3/d that have been proposed and have applications pending, and the 5.5bn ft3/d of projects at the prefiling stage.

Former energy secretary Rick Perry used the tagline "Liberty LNG" on visits to Europe, as part of the US strategy to weaken Russia by hitting its gas exports. Companies such as Polish state PGNiG have agreed to buy US LNG from projects not yet under construction as it diversifies away from Russian pipeline gas.