Natural Gas Exports on Front Burner (CHK, XOM, AA, DD, DOW)

Yesterday’s release of a new study by the US Energy Information Administration (EIA) on the impact of natural gas exports on domestic gas prices is just beginning to have its own impact on the US energy debate. US gas producers like Chesapeake Energy Corp. (NYSE: CHK) and Exxon Mobil Corp. (NYSE: XOM) would like exports, in the form of liquefied natural gas or LNG, to rise. Big consumers of natural gas, like Alcoa Inc. (NYSE: AA), E.I. du Pont de Nemours & Co. (NYSE: DD), and Dow Chemical Co. (NYSE: DOW) would restrict exports in order to keep domestic gas prices low.

We noted some of the important impacts of the EIA study in our report yesterday. The Wall Street Journal today notes that domestic gas prices could rise by 54% if the export quantities were large and quickly implemented.

It’s worth noting that at today’s domestic price of under $2.50/thousand cubic feet, that only raises the price of natural gas to about $3.75/thousand cubic. Historically that’s still a very low price for gas.