EIA: 'Modest' benefits from LNG exports

An increase in natural gas production from U.S. shale basins should support export growth, but the economic benefits will be modest, the government said.

The U.S. Energy Information Administration said in a daily brief Wednesday the increase in U.S. natural gas production should support as much as 80 percent of the potential increase in demand resulting from the steady gains in exports of liquefied natural gas from the Lower 48 states.

EIA in an analysis found LNG exports reach 2 billion cubic feet by next year, and eventually surge to as high as 20 billion cubic feet per day.

In its study, EIA found the "effects on overall economic growth [from the emerging LNG market] were positive but modest."

Construction began in Louisiana for the Cameron LNG plant in October. Once completed, it will be able to export 12 million tons of LNG, or around 1.7 billion cubic feet per day.

In September, the Federal Energy Regulatory Commission gave its consent for the Dominion Cove Pont LNG project in Maryland, authorized to export up to 770,000 cubic feet of LNG per day to countries that don't have a free-trade agreement with the United States.

Supporters of LNG exports argue it would provide a source of economic stimulus, while detractors say it would lead to more hydraulic fracturing, the controversial drilling practice known also as fracking.

The International Energy Agency said U.S. exports of LNG are not the panacea "talked up by some" in Washington.