U.S. Govt Could Delay Exxon’s Plans To Export Natural Gas

by Trefis Team
Exxon Mobil
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The U.S. government could delay its decision on allowing energy companies to export natural gas from the country, according to reports. [1] Currently, companies are required to seek permits to export gas to countries that do not have free trade agreements with the U.S. Hit by low gas prices in the North American market, many private players have approached the Department of Energy for export permits. Natural gas prices in the U.S. have collapsed to their lowest levels in a decade on excess production from shale exploration and companies are looking to target international gas markets, where prices for the commodity are significantly higher. Recently Exxon Mobil (NYSE:XOM), the largest producer of natural gas in the U.S., also revealed plans to export gas from the U.S. Gulf Coast and Canada to target international markets.

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Gas exports

Exxon’s CEO Rex Tillerson revealed plans this week to export natural gas from the U.S. Gulf Coast and from Canada, in efforts to tap into higher prices in the international market. [1] Exxon is pushing for gas exports from the U.S. as a way to end the existing supply glut and as a source for jobs in the U.S. The company has also said that exports of natural gas could help the U.S. bridge its trade gap. American companies are targeting lucrative markets in Asia, in particular Japan, which is looking to diversify from nuclear power. Gas prices in international markets are much higher than in the U.S. as international prices are generally linked to crude benchmarks.

Despite the strong case to allow natural gas exports, the U.S. government is proceeding cautiously with the issue. [1] The topic is seen as being politically sensitive and no decision is expected before the November elections. Opponents of gas exports say that production should be retained for local markets to forward energy security. Some are also concerned that allowing exports could increase local price levels, hurting manufacturing that depends on natural gas. Allowing natural gas exports could help Exxon tap into markets with higher gas prices and ramp up its natural gas production in the U.S.

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  1. U.S. Gas Exports Put on Back Burner, WSJ [] [] []
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  • commented 10 years ago
  • tags: APC CVX CHK XOM BP
  • Brett, the gas will be either released into the atmosphere when oil wells are drilled or burned off as waste. It is better to burn it producing electricity than to just contaminate the atmosphere. This lpg can be used in trucks and cars as well as to heat homes and businesses.