The United States is squandering a rare opportunity to switch cars and light trucks to run on natural gas, and should back away from plans to export liquefied natural gas (LNG) to Europe and Asia, according to a senior adviser to the United States Energy Security Council.

Gal Luft, who also serves as co-director of the Institute for the Analysis of Global Security, told the magazine Politico that despite a 10% reduction in greenhouse gas emissions from coal-to-gas switching for power generation, and the creation of more than 600,000 jobs from the shale gas boom, “all these benefits pale in comparison to what could be achieved if the gas replaced oil instead of coal.

“Although there are some efforts to increase the use of natural gas as an automotive fuel, they are limited to heavy duty trucks and buses, and therefore will not get us close to capturing the full economic opportunity offered by the shale gas revolution. Consider this: On our current trajectory, according to the Energy Information Administration, the increased use of compressed natural gas [CNG] and LNG in vehicles will offset only 3% of petroleum consumption in the transportation sector in 2040. To be effective natural gas must penetrate the light duty sector, where 60% of our transportation fuel is used,” Luft said.

He estimates the 3.5 Tcf of gas that the Energy Information Administration assumes the United States will be exporting annually starting in the next decade is valued at $15 billion. If that amount of gas were used to power U.S. cars and trucks, it would have displaced, depending on the technology, 3 million to 4 million b/d of oil, or the equal of $100-$150 billion a year of oil imports. “Instead, the United States will be exporting this $15 billion worth of energy only to import an equivalent amount of energy at up to 10 times the cost.”

The U.S. Department of Environmental Protection (EPA) could help reduce the cost of converting light-duty vehicles from gasoline to CNG “by streamlining the onerous regulatory requirements consumers are currently facing” for such conversions, which he said cost about $10,000 per vehicle.

Another option, according to Luft, is for Congress to provide automakers incentives to convert light duty vehicles into “flexible fuel” vehicles that could run on either methanol, gasoline or a combination of the two. He said the additional manufacturing cost to automakers would be about $100 per vehicle.

Last Friday, the ambassadors of four central European countries wrote a letter to House Speaker John Boehner, urging Congress to expedite LNG exports and reduce their allies’ dependence on Russian gas exports (see related story).

But Luft said using U.S. natural gas exports as “a potent geopolitical tool to be wielded against the Kremlin” won’t work. He pointed out that the first LNG export terminal — Cheniere Energy Inc.’s facility at Sabine Pass, LA — won’t be operational until late 2015 at the earliest, and that the gas to be exported is already committed to long-term contracts. Ukraine also doesn’t have a terminal to accept LNG.

“To be sure, in the coming years there will be times when natural gas prices inch up while oil prices decline, but it is highly unlikely that oil will ever become cheaper than natural gas per unit of energy,” Luft said. “But as long as our cars are locked to gasoline, America’s natural gas will go to fuel power plants in Asia and Europe instead of cars at home. And while the sellers of the gas may be indifferent as to where it ends up, for Americans as a whole, this amounts to a scandalous waste of an opportunity.”