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| US gas exports will shake up global market; a game changer | |
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| Tweet Topic Started: Mar 11 2013, 02:05 AM (143 Views) | |
| Pat | Mar 11 2013, 02:05 AM Post #1 |
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Fire & Ice Senior Diplomat
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We are sitting on the cusp of a game changer, one that renders US manufacturing cost a fraction of what competitors must swallow. Energy costs in many processes is a bigger hit than labor costs. http://www.cnbc.com/id/100530615?__source=yahoo|storysubject|&par=yahoo US Gas Exports Will Shake Up Global Market Published: Thursday, 7 Mar 2013 | 6:32 AM ET By: Patti Domm CNBC Executive News Editor Despite objections, the U.S. is heading down the road to export natural gas, and that could ultimately help shake up world energy markets. The boom in U.S. natural gas, thanks to new drilling technologies has resulted in a record amount of recoverable gas at cheap prices. Selling some of it abroad would bolster U.S. exports, help trade imbalances and relations, and provide fuel to parts of the world where it is now scarce and expensive. But there are concerns that the shipments out of the country will mean higher prices in the U.S. which has enjoyed extremely low prices recently. Natural gas futures on the NYMEX have been trading at about $3.50 per million BTUs. Natural gas is much more expensive in other parts of the world, especially Asia where the price is oil-linked. Japan is one country hungry for U.S. liquified natural gas (LNG), since the Fukushima earthquake forced Japan to increase high-priced natural gas imports, with its nuclear power industry off line. Japan pays about five times more for natural gas than the U.S. "This situation is not sustainable for the Japanese economy. In order to change one thought is to further diversify energy sources including shale gas from North America or other frontiers, such as Africa, which has different prices than oil-linked mechanism," said Hirobumi Kawano, president Japan Oil Gas and Metals National Corp. Kawano was speaking at the IHS CERAWeek energy conference in Houston, where LNG exports was a hot topic. "We think the objections to LNG exports have questionable merit based on the amount of supply that's available in North America," said Mark Papa, CEO of EOG Resources, also at the conference. "What this (natural gas boom) means is the U.S. is going to have the lowest long-term natural gas prices of any industrial nation for the foreseeable future — 30, 40, 50 years," said Papa. "In the last couple of years, that's about a $100 billion a year lighter burden that the U.S. has had to pay for its natural gas — relative to Europe, or certainly the Far East," he said. "You think about how our economy has been limping along for the last few years, how much worse it would have been without that $100 billion relief from shale gas." Cheniere Energy, which has the first U.S. approval to ship LNG from its Sabine Pass facility in Louisiana also participated in a panel at the conference, before a standing room only crowd. Cheniere CEO Charif Souki said the company has applied to add two more trains to the facility, to bring it up to 3 BcF/d from 2 Bcf/d of natural gas, it now has approval for. Exports are expected to begin in 2015. There are more than a dozen other applications waiting for regulatory approval, and industry officials expect some of them to be decided later in the year. It was not long ago that the U.S.was considering importing LNG, but the "shale gale" has helped give the U.S. 2,200 trillion cubic feet in recoverable gas resources, enough for 100 years by some estimates. "Now is the time for the DOE (Department of Energy) to make case by case decisions, " said Carlos Pascual, State Department Special Envoy and Coordinator for International Energy Affairs. He explained that after the Energy Department determined last year that exporting gas is not against the interests of the U.S., there was a commentary period that has now finished. (Read More: Berkshire's Oil Hauling Railroad Tests Switch to Natural Gas) Pascual said the natural gas market is growing at 3 percent a year, while LNG is growing at 9 percent a year. Europe's use of LNG has tripled in the last decade, and while it pays higher prices than the U.S., one official explained that competition has given it more competitive market pricing. A more competitive market has allowed Europe to negotiate with Russian gas producer Gazprom. Chevron Gas and Midstream President Joseph Geagea said the U.S. government should be consistent and provide a framework for LNG exports that will not be revisited every four years, with each new Administration. "The economic benefit form exporting natural gas could be substantial, billions of dollars and the jobs that come with it," he said. |
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| Corky52 | Mar 11 2013, 06:43 AM Post #2 |
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Fire & Ice Senior Diplomat
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The United States of America is NOT a third world country and we should not export raw materials! Energy is the life blood of any industrial society and we should use our surplus here to keep the price of energy low to encourage manufacturing. The only thing we should be exporting is finished goods and food.
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| Thumper | Mar 11 2013, 08:05 AM Post #3 |
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Fire & Ice Senior Diplomat
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I agree 100%.
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| Corky52 | Mar 12 2013, 12:20 AM Post #4 |
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Fire & Ice Senior Diplomat
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The economic benefits that come from low energy prices here would be ten times the benefits we would get from the export of the energy, many more jobs created to make goods than just the few created in capturing and moving the energy. Cheap, quick profits aren't always the best thing for the nation, just the select few who act as middle men. Leave the raw materials in the ground till America needs them.
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| tomdrobin | Mar 12 2013, 12:53 AM Post #5 |
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Fire & Ice Senior Diplomat
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Gas here has been knocking on the door of the $4 a gallon mark for the last few weeks. Suddenly a few days ago it took at $0.40 to $0.50 drop. Welcome news, but I haven't heard why? |
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