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Congress to hold hearings on LNG exports

  • House and Senate energy committees are due to hold hearings today over whether the U.S. should ease the restrictions on the export of liquefied natural gas.
  • The issue has received heightened attention due to the Ukraine crisis, as increased exports would help Europe cut its reliance on Russian gas.
  • One proposal would allow any country in the WTO to buy gas without U.S. government approval, a measure that would do away with almost all reviews.
  • However, opponents, which include Dow Chemical (DOW), argue that increasing exports would raise domestic prices.
  • ETFs: UNG, DGAZ, UGAZ, BOIL, GAZ, FCG, GASL, KOLD, UNL, GASX, NAGS, DCNG
Comments (29)
  • kmi
    , contributor
    Comments (3975) | Send Message
     
    No one is debating whether exports will raise the price of NG: the question centers on whether the increased economic activity resulting from increasing gas extraction is worth the raise in all Americans' expenses resulting from higher energy prices.
    25 Mar, 07:20 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (5756) | Send Message
     
    Exports don't have to raise nat gas prices if producers such as CHK would increase drilling. The issue is that both groups don't have equal plans.

     

    The biggest issue I have with exporting nat gas is selling it at current US prices and not based on global prices. Sure lets sell Europe gas but not at $4.5 but rather at $10 (or some level equal to what Russia sells it for. Are goal isn't to undercut Russia feeding Europe or Australia feeding China, but to take advantage of high prices. No point selling our vast resources at cheap prices.
    25 Mar, 12:06 PM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    By the time you liquefy NG and ship it, you can be sure that the market price for US gas abroad will be much closer to $10 MMBTU that pipeline NG here. Let the market dictate price.
    Besides, as others have commented below, the US ability to export LNG in significant quantities is years off. Our exports will not reduce the price of LNG in Europe or here in the US for 5 years at least.
    25 Mar, 01:14 PM Reply Like
  • geologist
    , contributor
    Comments (211) | Send Message
     
    The only way CHK and the other major gas producers will increase drilling for NG will be due to a price increase. Most of the unconventional shale gas resources are not economic at current prices. It will take an increase in NG prices to spur drilling for NG.

     

    It would not make sense to increase drilling for NG and to export that gas as LNG at current NG prices. Exporting LNG will result in less supply of NG which will drive up the domestic price of NG which will cause more drilling as long as the price increase in NG results in undeveloped NG to be economic. Bottomline is that if LNG is exported from the US there will be less supply and to replace the supply will require more drilling for NG but only if it is economic, meaning the price of NG in the US will have to increase.

     

    I can assure you that there are many NG prospects waiting in 'Prospect Inventory' waiting for the price of NG to increase so that drilling the prospects will be economic. If the price is not economic the prospects will not be drilled except to hold expiring leases. Supply/demand/economics. Regards.
    25 Mar, 01:32 PM Reply Like
  • llaurenzo
    , contributor
    Comments (5) | Send Message
     
    in Law of Mathematics and Economics, it does not matter that we sell it to Europe at Russian price, it will still increase the fundamental equation, and increase our prices here in the U.S . We will be back into a recession really fast if we export to Europe because the middle class can not afford a DOUBLING in price in 3 year period . FACT . The only reason some politician back it up is because the get money in cash from lobbyist to do so . No thank you.
    26 Mar, 06:31 AM Reply Like
  • User 353732
    , contributor
    Comments (4785) | Send Message
     
    Free trade in energy benefits all parties involved. The more LNG is exported, the higher domestic production will be. At a sustained price of around $4.50/mmbtu there is a vast supply of dry gas available in North America.
    Given the enormous extent of the natural gas resource in the US, demand begets its own supply.
    25 Mar, 08:01 AM Reply Like
  • freeman8201
    , contributor
    Comments (475) | Send Message
     
    another thing is LNG exporting in terms to state and state. The jones acts prevents foreign ships doing business for one state to another state. E.g., an Alaska company must export LNG to Oregon, or any other State, with a U.S. made ship that is capable of transporting LNG. An important fact. Currently there's no USA ship that is capbable of such a task. That I know of anyways.
    25 Mar, 08:37 AM Reply Like
  • iml84myd8s
    , contributor
    Comments (3) | Send Message
     
    Impossible to become energy dependent when we continue to export our own energy resources. Create jobs by converting oil and coal products to natural gas. Exporting keeps US dependence on oil and coal.
    25 Mar, 08:47 AM Reply Like
  • iml84myd8s
    , contributor
    Comments (3) | Send Message
     
    Europe has a plethora of natural gas. They choose not to frack due to their environmental concerns.

     

    Instead exporting natural gas, the United States should look to export drilling technology that would allow countries such as Ukraine to tap their own shale gas reserves, Dave Schryver, the executive vice president of the American Public Gas Association will tell lawmakers at the House hearing.

     

    "There is certainly no good reason why the U.S. should undertake a domestic LNG export policy that has numerous downsides for the American gas consumers when many of the very countries we are seeking to help are capable of helping themselves by accessing their own domestic shale gas reserves," Schryver said.

     

    APGA, which is a part of Dow's coalition, is opposed to all U.S. LNG exports, which it says will increase the price of U.S. natural gas.
    25 Mar, 09:22 AM Reply Like
  • taxman100
    , contributor
    Comments (244) | Send Message
     
    Exporting gas brings wealth into the country. Export economies tend to be growing economies based upon creation of new wealth in the country. Others actually give us money for our natural gas!

     

    In case you have not noticed, our economic growth over the last 30 years has been largely due to increasing debt, which is only borrowing wealth from the future.

     

    If the Europeans want to pay higher energy prices due to their environmental rules, let them. Why would we export our technology advantage to others?
    25 Mar, 09:35 AM Reply Like
  • Captain Pike
    , contributor
    Comments (504) | Send Message
     
    You are correct, but we first have to become energy independent, then we can export. We would be energy independent already if we had a national energy policy. I would even count canadian imports of tar sands oil in the calculation.

     

    The goal is to get most cars on electric and trucking on natgas or joule fuel, then export all you want and convert coal to natgas as iml84myd8s mentioned.
    25 Mar, 10:18 AM Reply Like
  • kmi
    , contributor
    Comments (3975) | Send Message
     
    The cost of the 2nd Iraq war alone would have enabled our energy independence, let alone the frequent and repeated international incursions and efforts we constantly engage in.
    25 Mar, 12:00 PM Reply Like
  • Wise Timmy
    , contributor
    Comments (265) | Send Message
     
    Ship Europe coal, or oil. Keep the Natural Gas in the USA where it can be used to create manufacturing jobs. That's my 2 cents.

     

    Plus with all the talk of climate change, why would you export cheap "clean" fuel when you use it in your own economy.
    25 Mar, 09:50 AM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    Protectionism in all its forms is doomed to failure: lowers growth worldwide and stifles conservation here at home. Let the worldwide market work.
    25 Mar, 10:26 AM Reply Like
  • Captain Pike
    , contributor
    Comments (504) | Send Message
     
    So wrong, from historic and current examples. So 90/00's of you.
    25 Mar, 10:35 AM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    Not much in the way of evidence in your reply! Would the USA's current rebound in supply of Nat Gas and Oil even been developed if US producers hadn't been forced to try new methods (such as horizontal drilling and fracking) if production levels had not been declining, prices rising and replacement of reserves commanding priority? I trust the ingenuity of technology and businessmen disciplined by the market way above the designs of central policy makers! The USA and the world is much richer as a consequence.
    25 Mar, 11:25 AM Reply Like
  • Captain Pike
    , contributor
    Comments (504) | Send Message
     
    It would take too long and not be worth the effort, but I have done so in the past on forums that I was a member of, different type of community.

     

    Anyway, all you described was human greed, and in this case at least Gordon Gekko was right.

     

    A hint to get you looking in the right direction, You may want to look up how Ronny saved Harley.
    25 Mar, 11:36 AM Reply Like
  • Wise Timmy
    , contributor
    Comments (265) | Send Message
     
    So you think we should trade nuclear bomb technology with whomever has the cash to pay for it? Free trade always wins right?

     

    Of course not. Some things are more strategic than others. Natural gas, could be one very important part of making the USA a manufacturing world power... Something we had been falling behind in until Natural gas prices in the USA plummeted. Now there are green shoots of hope for USA Manufacturing.

     

    Don't let Putin's short term rantings set our economic policy. Europe needs to frac it's own gas, or else pay for it's Green-stupidity.
    25 Mar, 12:51 PM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    Long-term success in the market is not driven by greed but by prudent risk allocation of capital. Why are you even an investor? Are you just greedy?
    25 Mar, 11:40 AM Reply Like
  • Captain Pike
    , contributor
    Comments (504) | Send Message
     
    http://bit.ly/OW4Rke
    25 Mar, 11:58 AM Reply Like
  • Not fooled in Nevada
    , contributor
    Comments (17) | Send Message
     
    Worldwide markets are not exactly free markets, Philtur. Energy exports are a bit more dicey than other types of commodities..
    25 Mar, 11:51 AM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    I'm not following you here. How are energy market more dicey than exporting beef, or wheat or cars? None of these markets are perfectly free either, but the US allows them. I think US should allow oil and coal exports, too. But it's difficult for domestic coal producers to compete with South African and other global competitors.
    My point is government restriction on LNG and oil exports are ultimately counter-productive and make the world a poorer place.
    25 Mar, 12:22 PM Reply Like
  • Not fooled in Nevada
    , contributor
    Comments (17) | Send Message
     
    Another point to make is that there is a long lag between being able to liquify the nat. gas and then shipping it abroad. The USA is not positioned to export LNG that would be timely, say, for the events occurring in the Ukraine. But exporting oil and coal to Europe in the interim period until LNG is able to be shipped (not to mention the foreign ports capable of receiving LNG), may be wise. Certainly, we need to keep nat. gas cheap at home to fuel some level of domestic growth by easing the cost of getting to work, for example.
    25 Mar, 11:51 AM Reply Like
  • kmi
    , contributor
    Comments (3975) | Send Message
     
    It did look at one time like nat gas would transition us off of oil dependence, but it currently looks like hybrids and electrics will skip nat gas entirely. There still may be a future for nat gas in commercial transport.

     

    Thing about oil consumption in US is some 70% is transportation so every time someone buys an electric or hybrid we reduce our oil dependence. Electrics are typically fueled from the grid which is moving rapidly to gas and is generally powered by cheap fuels - including, yes, coal. This is good because cheap energy is good for economic productivity and growth.
    25 Mar, 12:05 PM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    I worked in the electricity industry for nearly 30 years and I'm generally a big fan of the product. But battery technology is still a major hurdle for use in transportation... and while the marginal fuel of choice on the grid today is natural gas, the fuel mix of the grid undergoes a very gradual transition; furthermore, reliability concerns will always reward fuel diversity. So I don't think hybrids and electrics will skip nat gas entirely. The energy density of nat gas is a big factor in its favor.
    25 Mar, 12:31 PM Reply Like
  • Not fooled in Nevada
    , contributor
    Comments (17) | Send Message
     
    Take a look at Electrovaya (Canada) for, what appears to be the best performing lithium ion battery that doesn't explode..China is all in on this one for its KANDI electric cars..
    26 Mar, 10:49 AM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    Thanks for the reference to Electrovaya. I'm glad to see advancements in battery technology. But its products appear to be a long way from commercial... more in the developmental stage, I'd surmise. They are operating at a loss despite considerable support from the Canadian authorities. A bright future perhaps but as Orrick says, "There is many a slip between cup and lip."
    26 Mar, 11:15 AM Reply Like
  • Not fooled in Nevada
    , contributor
    Comments (17) | Send Message
     
    Actually, they are closer to marketing than you may know. China has plans to use a prototype in their electric car debut in late 2015 and recently, the company secured a $5million infusion. They have the necessary attention and I am betting that the company will be on fast track..particularly if the company gets the attention of an MIT tech journal..like Box did in January and now is the current tech story on going public..
    27 Mar, 10:14 PM Reply Like
  • philhtur
    , contributor
    Comments (26) | Send Message
     
    I should have said the demonstration phase then. Such a stock is way too speculative for my investments, but best wishes to you. Breakthroughs in battery technology can be game changers.
    28 Mar, 11:46 AM Reply Like
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