LNG Exports: A View from the E&P Community

The laws of supply and demand, rather than artificially imposed limits, should determine how much liquefied natural gas (LNG) the United States exports, according to Chris Faulkner, CEO of Dallas-based Breitling Oil and Gas Companies.

In fact, Faulkner – whose company has been active in major shale plays throughout North America – finds the evidence for curbing exports lacking. Faulkner makes the case for his position below.

Rigzone: How would you counter the argument that LNG from the United States should only be sold to customers in countries that have free trade agreements with the United States?

Faulkner: Suggesting that we should only export LNG to countries with free trade agreements is just another way of suggesting that exports should be limited. And there’s actually no logical, rational, or analysis-based reason that LNG exports should be limited at all. We have an opportunity to help our allies while at the same time strengthening our negotiating power. We should be leveraging the prospect of preferential access to LNG exports in our trade negotiations, but we should not set regulatory limits.

Rigzone: How would you respond to those opposed to all exports of LNG from the United States, specifically those who assert that keeping all of our natural gas within our borders would help to keep electricity rates stable and affordable?

Faulkner: It’s another red herring to imply that electricity rates will go up if LNG exports are allowed. The fact is, supported by many analysts, the United States has plenty of supply for both domestic use and exports, especially since even the highest estimates for future exports represent a drop in the ocean of domestic supply.

Rigzone: How would you allay the concerns of those who fear that exporting LNG threatens U.S. energy security?


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


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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.
Jim Montgomery | Aug. 1, 2013
I agree! Limiting the distribution of nat gas will not guarantee lower prices, it will guarantee less effort in finding and developing this awesome resource. If people want lower prices, they should act to lighten the load of government off of producers.

Robert Godfrey | Jul. 30, 2013
As the law of supply and demand dictates, exporting a finite resource results in depleting the resource sooner; meaning, when the gas begins to run out again prices will climb again. The actual red herring is claiming exporting will not impact long-term pricing.

Michael Davis | Jul. 30, 2013
The politics of fear plainly seen. The cowardly get afraid of the freedom of free market principles and think, "Oh, my, what if we sell all our natural gas?". "We should horde it and have cheap gas for all our citizens!" Sure this issue appeals to the hippy crowd and always will. Isolationism, communism, cowardice, tyranny and greed are all rolled into one on this issue. Free markets encourage trade, good relations with neighbors, freedom and peace in the world. Put on your big boy pants and participate in making the world a better place by engaging the rest of the world and stop cowering in the corner of the world and reacting to everyone with the politics of fear.


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