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The Exportation of U.S. Lng

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Submitted By jon901
Words 6784
Pages 28
The Exportation of U.S. LNG:
An Abundance of Shale and Construction of New Export Terminals

Section 1: Introduction
The shale boom experienced by the United States since the mid-2000s ushered in unprecedented production and reserves estimates of oil and gas in the lower 48 states. This sustained supply and production has been a result of technological advancement, particularly improved techniques in hydraulic fracturing, has kept prices for natural gas extremely low while crude oil prices have fluctuated and changed over time. One reason for this is the different nature of exportation in the two hydrocarbons. As will be discussed below, the transportation and exporting of natural gas is much different than for crude oil. Natural gas must undergo a liquefaction process in order to travel by specialized cargo ship, the alternative to a pipeline, which adds substantial costs to the activity. There are currently no operational natural gas export terminals in the lower 48 states, but a few are under construction. The large sunk costs will be a large part of our consideration of the exportation of natural gas. The U.S. has traditionally been a net importer of gas, and considering the high upfront costs of building export terminals, the sale of American gas has been isolated almost exclusively to the domestic market. The only exception to this has been to export natural gas only where existing pipelines can carry it, which has limited foreign export to North America. Despite this historical trend, calls for the US to begin exporting natural gas have been growing louder as the potential to seek higher priced natural gas markets become more attractive.
This paper will explore liquid natural gas (LNG) export terminals and their prospects in the United States, analyze current legislation and regulation surrounding exportation, identify potential markets for

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