Exxon CEO: 'Losing Our Shirts' On Low Natural Gas Prices
NEW YORK--Exxon Mobil Corp. (XOM) is making "no money" on U.S. natural gas due to low prices that have fallen below the cost of production, Exxon Chief Executive Rex Tillerson said Wednesday.
U.S. natural-gas prices--which fell below $2 a million British thermal units earlier this year to the lowest level in a decade--are not sustainable, as energy companies won't be able to continue drilling unless prices rise, Mr. Tillerson said during a breakfast event in New York.
"We are losing our shirts," said Mr. Tillerson.
The comments from Exxon's chief come amid a massive U.S. gas supply glut that has kept prices depressed and helped to reduce energy costs for many consumers and businesses. In recent months, demand for natural gas from utilities has surged as firms turn to gas instead of more expensive coal to supply electricity.
Exxon has been studying the possibility of exporting natural gas from the U.S. Gulf Coast and Canada as new shale drilling has unlocked natural-gas reserves to allow exports.
At the company's shareholder meeting in Dallas last month, Mr. Tillerson said exports will create jobs, increase tax revenues and help the U.S. trade balance.
Exxon is following the trend of smaller companies, such as Cheniere Energy Inc. (LNG), which have already pursued the necessary permits to export gas from the U.S.
Additionally, Mr. Tillerson said that with public policy that encourages the industry, there are enough U.S. oil and gas reserves to provide the domestic economy with fuel through the rest of this century.
"To say the U.S. is energy poor is simply not accurate," he added.
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