The "Look Before the LNG Leap" report comes as the Energy Department considers a number of proposals to export natural gas amid record U.S. production.
"The Department of Energy should look at the full picture of what exporting LNG will mean for Americans' health, communities and check books," Deb Nardone, Sierra Club's Beyond Natural Gas campaign director, said in a release.
The fracking process uses abrasives and chemicals -- some of which are harmful to the environment -- to extract natural gas from rock formations.
The environmental group says that exporting natural gas to foreign countries would increase "dirty, dangerous fracking in Americans' backyards" and drive up energy prices for the nation.
"If we blindly move forward with LNG exports, the American people will be left footing the bill while natural gas companies rake in more cash with zero accountability for their toxic pollution," Nardone said.
The Energy Department has postponed decisions on companies' applications to export approximately 16 billion cubic feet of liquefied natural gas daily until it receives a study, later this year, of the economic effect of such exports, reports the Houston Chronicle.
U.S. Sen. Ron Wyden, D-Ore., the incoming chairman of the Senate Energy and Natural Resources Committee, has opposed expanding natural gas exports. Wyden and other lawmakers say that domestic manufacturers, now benefiting from low gas prices, could be put at a disadvantage by increased foreign sales.
But selling more natural gas to foreign customers "is an opportunity to really help tilt the balance of trade in our favor for the first time in decades," said Sen. Lisa Murkowski, R-Alaska, the Energy Committee's top Republican at an energy briefing this week organized by The Hill newspaper.
Japan, in particular, she said, is "clearly looking for North American energy sources" and a stable, long-term natural gas supply.
Exporting to Japan is "an opportunity to fill a need with a friend and an ally," Murkowski added.
Post Fukushima, Japan has looked to LNG to replace energy supplied from now out-of-service nuclear plants. In 2011, Japan's total LNG purchases increased by more than 50 percent year on year.
"From all the aspects, U.S. LNG is a very, very shining treasure ... for us," Hirohide Hirai, director of policy evaluation and public relations at Japan's Ministry of Economy, Trade and Industry told the National Journal.
Hirai said that based on his conversations with U.S. officials, energy lobbyists and consultants about Japan's growing LNG needs, he is confident that the Obama administration will give the green light to the expansion of LNG exports.
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