US producers want to export natural gas to take advantage of higher prices abroad, but the US Department of Energy is considering whether additional exports will mean higher prices in the US.

Christopher Smith, Deputy Assistant Secretary for Oil & Natural Gas in DOE’s Office of Fossil Energy, told the opening session of the US Association of Energy Economists, meeting October 10-12 in Washington DC, that DOE is weighing the cumulative price effect of exports, as more export applications are being filed. Read more about the conference: Making The Numbers Sing In DC.

The US has been an importer of natural gas, which must be transported by special tanker in the form of liquefied natural gas (LNG). But recent development of technology for gas shale wells made the US essentially self-sufficient in the fuel. The sudden ample supply has depressed gas prices, and left producers looking for new customers.

Prices for LNG in eastern Asia remain high, especially in Japan which is struggling to replace lost nuclear power. Recent Japan sales have run as much as $12 per million cubic feet above the US price of around $4.

Exporting natural gas requires costly gasification facilities, and the US has only one small plant, in Kenai, AK, which is closing next year. DOE has signed off on one new facility, for Cheniere Energy at its Sabine Pass, LA, terminal, which will be able to liquefy 1.2 billion cubic feet a day when it’s operational in 2015.

Southern Union and BG Group have applied to DOE to add 2 billion cubic feet per day gasification capacity at BG’s Lake Charles, LA, terminal, and Dominion Resources wants to add 1 billion cubic feet per day of gasification to its Cove Point LNG terminal in Maryland to export gas from the Marcellus Shale. All projects cost at least $1 billion per billion cubic feet capacity.

But substantial exports could drive US natural gas prices by diverting any domestic surplus to the world market. The US uses about 24 billion cubic feet of gas daily.

Each terminal needs permits from the Environmental Protection Agency and the Federal Energy Regulatory Commission, plus export authorization from DOE.

Smith said DOE is performing “due diligence,” and is aware that its review of each terminal is “precedent-setting.”

He told reporters that DOE has “no preconceived limit” about how many terminals can be built without affecting domestic prices. He said DOE is looking at each application, in order as it is filed, for the impact on a series of factors, including jobs and prices. The effect assessment will therefore change each time an approval is issued, he said.

Photo Caption: A liquefied natural gas (LNG) tanker arrives at a gas storage station at Sodegaura city in Chiba prefecture, east of Tokyo on April 6, 2009 for the first shipment of LNG from Sakhalin-2 natural gas development project in Sakhalin, Russia.