Increased liquefied natural gas exports would raise natural gas prices in the U.S., but would lead to higher levels of economic output, says the U.S. Energy Information Administration's report on Wednesday.
'Rise in the U.S. LNG exports would create higher consumption expenditures for domestic goods and services,' said the report.
'Consumer expenditures for natural gas and electricity increase modestly with added LNG exports,' the U.S. agency said.
An increase in LNG exports would be a result of the rise in natural gas production in the U.S., of which 75 percent will be provided by shale resources, according to the report.
Since the 2008 shale boom, the U.S. enjoys increasing gas production each year, and less dependency on imported energy, thus a fall in the total expenditure of imported energy.
While the U.S. annual shale gas production was 2 trillion cubic feet (56 billion cubic meters) in 2008, it increased to over 10 trillion cubic feet (282 billion cubic meters) in 2012, according to data compiled on the agency website.
Moreover, if U.S. LNG exports rise, this would decrease the global price of natural gas, which would increase the overall demand of foreign countries importing more U.S.-based goods, services, and exports, according to the report.
'Any reduction in global natural gas prices that might occur as a result of U.S. LNG exports would tend to stimulate the economies of countries that import gas, increasing their demand for both domestic goods and services and imports sourced from the United States and elsewhere,' said the administration.
The report, named 'Effect of Increased Levels of Liquefied Natural Gas Exports on U.S. Energy Markets', was prepared upon the request of the U.S. Energy Department to project the economic consequences of LNG exports.
U.S. companies are not allowed to export LNG to countries that the U.S. does not have a free trade agreement with, unless they are first authorized by the U.S. Department of Energy.
By Ovunc Kutlu