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The Role of Shale Gas in Deciding the US Presidential Election

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The Role of Shale Gas in Deciding the US Presidential Election

Photo Courtesy of Bigstock

This opinion piece presents the opinions of the author.
It does not necessarily reflect the views of Rigzone.

President Obama faces a shale gas dilemma that threatens to damage his bid to secure a second term in the White House, stated the latest report from natural resources experts GBI Research.

The United States is currently endowed with a wealth of natural gas following years of overproduction, and while allowing exports would win friends within the industry and potentially boost the economy, it would anger those seeking to keep domestic prices low, says the new report.

The past few years have seen natural prices falling to around $3 to $4 per million British thermal units (MMBtu), and the U.S. Energy Information Administration EIA expects the annual wellhead natural gas price trend to remain at around $5 per MMBtu until 2025.

By contrast, liquefied natural gas (LNG) prices in potential trade countries, particularly those in Asia, are three times higher, suggesting a highly lucrative export market. However, shipping LNG abroad would alter the supply/demand balance and naturally result in a higher cost for U.S. consumers.

The development of shale gas over recent years has significantly altered the U.S. energy outlook and major industry players have significantly increased their 2012 capital expenditure (capex) for the development of shale plays.

ConocoPhillips and Chesapeake Energy announced respective capex of $2.3 billion and $2.4 billion for the development of the Eagle Ford shale play in 2012, while Bakken shale operators Continental Resources and the Hess Corporation, outlined respective 2012 capex of $1.1 billion and $1.9 billion in 2012.

GBI Research forecasts the total U.S. shale play capex to reach $52.1 billion by 2016, climbing at an average annual growth rate (AAGR) of 11.9% from the expected 2012 figure of $35.3 billion.

WHAT DO YOU THINK?

Post a Comment Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
K Davis | Oct. 3, 2012
right what are we waiting for? I know a ENERGY POLICY

Dallas Evano | Sep. 29, 2012
The idea our country isnt booming with steady jobs and working its way out of debt by selling its mass resources to other countries who have gotten rich off Americans for years is worth questioning. I guess Ill just sit at the yard grinding and painting high pressure iron for 40 hours a week. FracSTaR

David Watts | Sep. 28, 2012
USA should be using this energy resource more to use its own reserves, reduce the consumption of imported oil and reduce pollution. Hence USA energy costs will significantly lower along with its manufacturing cost. As a bonus the environment will improve through lower emissions comparing gas to oil. What are we waiting for?

William McClenney | Sep. 28, 2012
The problem, Rick, is fossil fuels, and fervent belief structures that (a) low-density, ultra-expensive and horridly unreliable "renewable" energy sources such as wind and solar can power the 21st century economy, and (b) the heathen devil trace gas CO2 will cause temperatures to rise, perhaps uncontrollably. Allow me to put this all into context. The Holocene is now right at half a precession cycle old, Five of the last six interglacials have each lasted about half a precession cycle. And solar cycle 24 has already peaked in sols northern hemisphere and may peak in its southern hemisphere in the next year or two. Its going all quiet on us...... The interesting thing here is IF CO2 is the heathe trace devil gas it is made out to be, we had all better hope and pray that it IS. Because IF it is, it could be the only thing approaching a climate security blanket we could throw up there to delay the onset of the next glacial. A now 4 day old paper worth a quality read may be found at http://www.clim-past.net/8/1473/2012/cp-8-1473-2012.pdf

Robert Godfrey | Sep. 27, 2012
The current administration is taking a measured, responsible look at a complex problem that is not yet fully understood.

Bill | Sep. 27, 2012
The gas story is not necessarily a bad one for OBama at this point, if he leaves it alone, he can claim some credit for it. I wonder how he would act if reelected, would he quit bowing to his environmentalist dreamers and worry more about all of the jobs that gas exploration can generate if left alone? Do either of the candidates recognize how beneficial it would be to support the building of natural gas refueling stations across the country? So many questions so little time.

Greg Leger | Sep. 27, 2012
Natural Gas is the cleanest burning natural resource, readily available. We have had the technology to use this for over 50 years. We need an administration that would mandate the use of NG for mass transit, electrical generation, and manufacturing just to mention a few. Why should we allow OPEC to regulate the price of oil???? Americans suffer due to high gasoline prices, which is at least 40% tax in most states, lose jobs, raises the price of all consumable goods. We need to use it, not export it.

Tualatin | Sep. 27, 2012
I honestly dont see how the speculation of higher gas prices due to the possibility of future LNG exports will have an impact on the upcoming US presidential election. Election Day is just five weeks away! The only thing that could push prices up to election altering levels within that timeframe is unseasonably frigid weather - and thats not likely to happen by early November. I expect Obama will win. Possibly by a landslide.

Rick Incorvia | Sep. 26, 2012
Bottom line is.. We to start using this natural gas ASAP.. No Brainer... What is the problem..



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