Because of hydraulic fracturing in states like North Dakota and Wyoming, Californians and other Americans have enjoyed lower natural gas prices over the last two winters than anytime in the last 15 years. That continues right up to this moment.
But if the natural gas industry and the Obama Administration have anything to say about it, today's relatively low-cost heating and cooking may soon be matters of nostalgia.
That's the meaning of the three approvals already issued by the Obama-appointed Federal Energy Regulatory Commission (FERC) for either building new terminals to export liquefied natural gas (LNG) or to convert existing import plants to export facilities. More are likely to be approved soon.
Californians should well remember LNG, natural gas frozen into a fluid state near its source and then shipped around the world for use in places that don't produce their own. The new American export plants aim to send LNG to places like Europe, Japan, Korea, China and India. They've gotten new impetus from ongoing disputes between Ukraine and Russia, source of most of Europe's natural gas.
Not long ago, Californians were battling over whether and where to put plants for importing LNG, the result of a decision by the state Public Utilities Commission to give up some of the state's reserved space on pipelines bringing gas here from Texas, Oklahoma and Colorado.
The answers were no and nowhere. Proposals for plants near Eureka, Oxnard, Long Beach and Santa Monica all died because companies promoting LNG imports never proved the state would ever need gas imported by sea. The later discovery of vast quantities of gas right in California, available if the massive deposits in the Monterey Shale geologic formation are ever fractured, or fracked, means California may soon need no imported gas at all.
So this state dodged a financial bullet, not getting stuck with hyper-expensive LNG.
But prices here will nevertheless rise because of the export licenses now being handed out for gas the industry has defined as "surplus."
This likely fact of life emerges in a remarkable letter sent to Alaska's Republican U.S. Sen. Lisa Murkowski last fall by a top federal Energy Department official.
Murkowski has pressed for quick approval of an LNG export facility in her state, warning that "The United States has a narrowing window of opportunity to join the global gas trade." Seeking oil and gas-related profits andjobs for Alaska, Murkowski never acknowledges the certain effect exports will have on domestic gas prices, sure to rise if the current surplus goes overseas.
In California, price effects will probably be immediate with the opening of planned LNG export plants near Coos Bay, Ore., and near Prince Rupert on the coast of British Columbia. Both would take allegedly surplus gas from western Canada fields that now supply California and the Pacific Northwest.
But FERC doesn't care, according to its letter to Murkowski. "We take very seriously the investment-backed expectations of private parties," wrote Deputy Assistant Energy Secretary Paula Grant. Would FERC rescind an export license if domestic gas prices rise precipitously because of that permit? No, said Grant. "DOE has no record of having vacated or rescinded an authorization to import or export natural gas over the objections of the authorization holder."
The Energy Department is also ignoring protests by other U.S. industries whose recession recoveries have partly been fueled by low gas prices.
A group of firms led by Dow Chemical has demanded that FERC - which works hand-in-glove with the Energy Department - slow the rush to sell off America's energy bonanza.
FERC, the companies say, should "clearly articulate in advance its criteria" for deciding what is in the public interest.
So far, no response. Which indicates that even with a majority of commissioners appointed by an allegedly consumer-oriented Democratic president, FERC is no more responsive to the interests of utility customers than it was during the energy crunch of 2000andndash;2001, when Republican George W. Bush was president and the commission refused to stop companies that cheated Californians out of more than $10 billion.
It all assures gas prices here will rise sharply in the next year or two unless California's congressional delegation unites to put the brakes on LNG exports, and soon.
Reach Thomas D. Elias at email@example.com .