Allowing LNG exports would send positive signals, experts say

Authorizing US LNG exports would send positive signals not just to producers, but also to capital markets that would in turn finance new transportation systems, experts suggested at a conference on American energy exports.

Additional US gas resources are available, but aren’t necessarily being produced, said Kevin Book, managing director of research at ClearView Energy Partners LLC. That will require capital, which institutional and other major investors will hesitate to commit without more certain energy policies, he said on Jan. 16 at a conference cosponsored by Women in International Trade and the US Chamber of Commerce’s Institute for 21st Century Energy.

“When you look at the Natural Gas Act, which allows exports, Congress has already said that it’s in the national interest,” added Erik Milito, the American Petroleum Institute’s upstream and industry operations group director. “We hope [the US Department of Energy] will proceed expeditiously and not apply a quasi-cap with delays.”

Federal LNG export authorization authority is divided between DOE, which determines whether a proposed project is in the national interest, and the US Federal Energy Regulatory Commission, which oversees transportation, terminal siting, and other physical matters. DOE has solicited public comments on whether LNG exports generally are in the nation’s interest.

Conference participants said that they are. “This country began when colonists protested British export taxes,” said John Murphy, vice-president for international policy at the US Chamber of Commerce. “The aversion to export restraints is part of our national DNA.”

The World Trade Organization prohibits export curbs, including for crude oil, except when readily exhaustible resources are involved, he continued. That’s clearly no longer the case with US gas, and export opponents are calling for restrictions primarily to keep prices down, which the WTO doesn’t allow, Murphy said.

Reexamine policies

Other conference speakers said federal energy policies based on growing US scarcity need to be reconsidered. Karen A. Harbert, director of the Institute for 21st Century Energy, said when she was a DOE official in 2005, discussions about LNG terminals involved imports instead of exports. “We have to find jobs for 20 million people in the next 10 years,” she said. “Energy could provide a lot—if we let it. It’s the real engine of our economic recovery.”

Because the federal government controls so much of the nation’s energy resources, more access clearly is needed, Harbert maintained, adding, “We need to update our energy infrastructure, which has not been dramatically increased since World War II. We’re going to need more pipelines.”

Richard R. Hoffman, executive director of the INGAA Foundation at the Interstate Natural Gas Association, said the US interstate gas pipeline network already is extensive, but more is needed. Building extension lines to LNG export terminals could be easier than constructing other new oil and gas pipelines, he suggested. FERC, unlike some federal regulators, has a transparent and consistent permitting process, Hoffman said.

Kevin Jianjun Tu, a senior associate in the Carnegie Endowment for International Peace’s energy and climate program, said US attitudes toward foreign investment in domestic energy projects also need to be reexamined.

The US oil and gas outlook has changed significantly since 2005, when the Chinese National Offshore Oil Corp. expressed interest in buying Unocal Corp., he noted. US crude oil imports, which accounted for about 60% of total US consumption then, have fallen to about 40%, Tu said. Chinese investment in US projects now would be more efficient than trying to duplicate US shale production successes there, he indicated.

Temper enthusiasm

Other conference speakers warned against becoming too enthusiastic about US oil and gas development growth prospects. “Being an energy analyst in Washington these days is like being a central banker in Europe—having to pull the punch bowl back a little when folks start to get too excited,” said Robert McNally, president of the Rapidan Group.

McNally said when he was the top international and US White House energy advisor from 2001 to 2003, Alaska North Slope producers and the state’s congressional delegation unsuccessfully sought a $4.36/Mcf gas price floor to support construction of a pipeline to markets in the Lower 48 states.

“The mammoth oil fields from 20-30 years ago are tired and worn-out today,” McNally said. “When people talk about the US shale oil boom now, it’s wonderful. But we’ll need about six of those just to maintain the status quo.” Demand growth could be greater than expected, he added. “Even when there’s [gross domestic product] destruction, as in 2008-09, energy demand keeps growing in the rest of the world,” he said.

Simon Henderson, the Washington Institute for Near East Policy’s gulf and energy policy program director, added, “The world will continue to rely on the Middle East for crude oil, its primary energy, through 2035. Most of the world’s reserves—65%—are there, and many of those countries have Persian Gulf coastlines.” Shipments will increasingly head east instead of west, particularly to China and, increasingly, India, he said.

In the US, meanwhile, ASME (formerly the American Society of Mechanical Engineers), has said that transportation infrastructure improvement is badly needed—not just for pipelines, but also for roads, bridges, and railways, said Richard Myers, vice-president for policy development, planning, and supplier programs at the Nuclear Energy Institute. “Unless we dramatically improve it, we won’t have much exporting credibility,” he warned.

Contact Nick Snow at nicks@pennwell.com.

Related Articles

Senators’ bill aims to curb flaring by expediting permit process

02/09/2015 North Dakota and Wyoming’s US senators introduced legislation that aims to capture methane and reduce flaring by expediting procedures for obtainin...

USW union workers add two BP refineries to strike list

02/09/2015 Union workers at two BP PLC-owned refineries in Indiana and Ohio have joined the United Steelworkers union’s (USW) unfair labor practice (ULP) stri...

Bendine elected as Petrobras’ chief executive officer

02/09/2015

The board of Petroleo Brasileiro SA (Petrobras) has approved the election of Alde Mir Bendine as the company’s chief executive officer.

Central starts gas sales from Palm Valley field

02/09/2015 Central Petroleum Ltd., Brisbane, is to start sale of early natural gas from Palm Valley field to Northern Territory Power & Water Corp. under ...

Association presidents want more access in next 5-year OCS plan

02/09/2015 The presidents of three major US oil and gas trade associations urged the US Bureau of Ocean Energy Management to keep more of the US Outer Contine...

MARKET WATCH: NYMEX oil prices settle above $51/bbl

02/09/2015 Crude oil prices rose on the New York market Feb. 6 to settle above $51/bbl after the Baker Hughes Inc. weekly rig count showed a decline of 87 rig...

Statoil reduces capital budget by $2 billion following 4Q losses

02/06/2015 Statoil ASA has reduced its organic capital expenditure to $18 billion in 2015 from $20 billion in 2014. The move comes on the heels of a fourth qu...

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Cognitive Solutions for Upstream Oil and Gas

When Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected