I will raise this topic again as one that has significantly cost the US lost revenues. LNG is a globally priced commodity. Currently, the US is one of the lowest priced suppliers in the world. This is excellent as demand for our LNG is very high. However, the problem few realize is that the US sells LNG on an FOB basis priced off of US Henry Hub prices plus a tolling fee. Foreign firms have signed for all port capacity space and thus are the firms capturing the very large spread between US prices and foreign prices. This spread can be at times $5 / mmbtu or more which translates to over $15 million per cargo.
Every month we are exporting up to 100 cargoes or more. If the US were to place a floating export tax it would raise the price of US LNG but not to the point that it is unattractive in the market. Thus, we can still be a market leader in supply however capture more of the market price that is currently being captured by foreign firms using our terminals. The US can capture an additional $1 billion or more every month.
This tax can be used to upgrade US energy infrastructure at no cost to US consumers. It will be paid by the foreign firms paying the tax to buy our LNG. This concept is not a new idea as in fact every other nation in the world already does this, only the US does not. It is time we the public benefit from our LNG exports.