I came across this interesting piece on RTO Insider today about the pending FERC decision about whether to allow Dominion Energy to reconstruct its Cove Point, MD natural gas import facility to convert it into an export platform. The situation with natural gas exports is exactly the same as the “export” of “surplus” electricity from WV’s monster coal plants through the failed PATH power line.
Whenever there is a surplus of a resource in one market area, assuming that demand remains the same, the price of that resource will fall. That is why WV has lower electric rates (but they are rising steadily) than most other states in the US. That is also why natural gas prices have fallen dramatically over the past five years in the US. The shale gas bubble, which may be at or approaching peak production, has created a big surplus in the US which has affected all businesses that use natural gas: the plastics industry, the electric industry and gas utilities.
And what will happen if the US begins to export natural gas to other countries where prices are much higher? That’s right, your gas and electric bills will go up, because you and your family are now competing with families in Europe and Japan for that gas.
In all the discussions of Cove Point and other export projects, I haven’t heard much talk about this rate impact. Make no mistake, if exports happen, your costs for heating and electricity will rise along with them.