Coal remains key to global gas price formation. Competition between coal and gas in the power sector is a key determinant of gas prices. This is particularly important to US LNG players because exporters depend on the right combination of low US gas prices and high international market prices to ensure a margin over their liquefaction and transportation costs. Wood Mackenzie forecasts a large recovery in US coal generation and a measured return in Chinese coal production. These factors mitigate US gas price growth and avoid European gas prices crashing through 2017. But the opposite is possible. Without a large coal response in the US there is little to prevent Henry Hub prices exceeding US$4/mmbtu. And a Chinese policy of domestic coal encouragement as clumsily executed as the previous policy of coal restrictions could see gas prices in Europe fall under US$4/mmbtu. Under those conditions the math on US LNG exports doesn’t work.