The Obama administration is now considering stream-lining the approval process for  export license applications for liquefied natural gas (LNG) terminals.  The change is due to the Russian invasion and takeover of Crimea.  The President hopes that exports of American natural gas to Europe and Asia will reduce their economic dependence on Russia.

However, once US companies start exporting natural gas, it becomes a global commodity, and companies will start selling to the highest bidders.  This means US prices will rise, because natural gas is much cheaper here than in many foreign countries without our abundant supplies.  The USA Today editorial in the link below thinks the impact will only be modest, but exports are already propping up the price of American coal as the US shutters its coal-fired power plants.

http://www.usatoday.com/story/opinion/2014/03/20/natural-gas-export-russia-president-vladimir-putin-editorials-debates/6670165/

This may be bad news for apartment owners or residents, who just experienced record high heating bills this winter.    But the impact could reach much further and raise prices on items such as food, since natural gas is used to by chemical companies to produce fertilizers and many other industrial products.

There are good arguments on both sides (see the Opposing View in the USA Today), but there will be a domino effect to this action.  The American public just needs to understand that going in, since it seems we always get suckered into believing that we are somehow able to magically avoid basic economics, and then get left holding the bag when things don’t quite go as planned.  Sound familiar?

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