The large gap between domestic US natural gas prices and LNG prices in European and Asian markets that underlies the rationale for US LNG exports has raised the question: when US gas is sold abroad, who captures that spread?

The difference between low prices paid for gas produced in the US – currently trading at around $4.20 per million Btu on Nymex – and much higher prices paid for LNG imports in European and Asian markets – at more than twice US levels – is behind a push to open up export markets to US gas producers. As the debate rages over what impact exporting domestically-produced gas may have on the US economy, Senators Lisa Murkowski (R-AK) and Ron Wyden (D-OR) asked experts who profits from that price spread at a hearing before the Senate Energy and Natural Resources Committee on Tuesday.

“If you’re not making big profits on the price spread, who’s getting the spread?” asked Wyden. Wyden has been outspoken in his concerns that US LNG exports, absent government-imposed volume limits, could lead to higher domestic natural gas prices.

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