The future of American natural gas

LNG exports could reap billions of dollars in yearly profits for companies that are putting down big bets on the industry.

LNG exports could reap billions of dollars in yearly profits for companies that are putting down big bets on the industry.

The federal government appears to be moving closer toward allowing liquefied natural gas (LNG) exports on a grander scale. According to a report from The Motley Fool, an international investment and finance website, the U.S. Department of Energy has approved or begun authorizing a number of exportation licenses that could result in billions of dollars in profits. While some technological aspects of LNG exporting remain a challenge, including refrigeration and safe shipping concerns, proponents of this up-and-coming market say that it will provide a huge boon for investors.

The Fool's analysis shows that the United States could export as much as 5.6 billion cubic feet per day of LNG by 2015. This could rise to as much as 7-8 billion by 2020, although developments in the global economy could either strengthen or weaken base demand by that point. As national energy grids begin relying increasingly on natural gas, the United States could become a crucial source for LNG as the high cost of petroleum remains a deterrent.

What companies stand to benefit? The Fool cited a report from Goldman Sachs, which identified Dominion [NYSE: D] and Cheniere Energy [NYSEMKT: LNG] as two potential beneficiaries of these licensure. Yet the website astutely notes that in order to actually generate enough revenue to surpass the enormous operational costs of extraction, storage and shipment, the United States  may need to export as much as 15 percent of the total LNG market supply. This could be as much as 13 billion cubic feet per day.

Ultimately, investors who have an appetite for riskier, longer-term growth opportunities might want to keep an eye on developments in the LNG industry. However, given the volatility pervasive in today's markets, utilizing the SmartStops portfolio monitoring system can help avoid unnecessary losses. Explore our website today to learn more about how our online tools work

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