New US LNG Export Reality Bucks Conventional Wisdom, Yields New Question

Less than a decade ago, the conventional wisdom was that the United States would become increasingly dependent on imports of liquefied natural gas (LNG). Now, thanks to the successful deployment of horizontal drilling and hydraulic fracturing at shale formations throughout the country, the domestic supply of natural gas should be robust for decades to come.

The United States' newfound abundance of natural gas has answered a question that was pressing just several years ago: where will the country find enough gas to meet its growing energy demand? Now, however, another question is on the minds of many U.S. producers and large-scale consumers of natural gas: where will the country's surplus of domestically produced natural gas go? Some would like to see it sold as LNG on the world market to the highest bidder. Others advocate more limited sales of LNG only to countries that have entered into free trade agreements with the United States. In addition, this second group has argued for keeping natural gas prices stable in order to provide a competitive advantage for domestic manufacturers. Finally, a third set of stakeholders opposes large-scale LNG exports altogether.

Representatives of these three camps – one from an exploration and production (E&P) company, one from a petrochemical manufacturer and one with ties to publicly owned utilities – have graciously agreed to offer their insights on the LNG export issue in a series of interviews conducted by Rigzone. Furthermore, two analysts with extensive knowledge of the topic – one based in the U.S. and another in Europe, a potential destination of LNG exports from the U.S. – provide added perspective.

In the first installment of this multipart series, the CEO of an independent E&P company presents his thoughts on the LNG export issue.

Matthew V. Veazey has written about the oil and gas industry since 2000. Email Matthew at mveazey@downstreamtoday.com

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Ken in San Jose | Jul. 30, 2013
We in the US should develop new uses for our abundant natural gas supply before exporting this valuable resource for short term profit. There should be increased use of natural gas in generating electricity to reduce the production of carbon dioxide and other air pollution. To reduce our dependence on foreign oil and reduce the production of air pollution, there should be increase use of compressed natural gas (CNG) vehicles, especially in intra-city truck.s, buses, and car fleets. And the creation of the CNG infrastructure for regular car use. The huge financial cost of developing LNG terminals is not justified when you look at the worlds supply of natural gas. Areas in the Indian Ocean off north west Australia and east Africa hold huge deposits of natural gas. When these sources are developed for LNG export their cost advantages against the US will make US LNG exports prohibitively expensive. Making the investment in US LNG terminals a waste.


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