U.S. natural gas continues to be one of the cheapest commodities globally, on a late-historical basis.
But despite the low price (in fact, because of it), there's a fight brewing to control this unwanted good.
US House of Representatives Energy and Commerce Committee member Gene Green said last week that exports of liquefied natural gas should be a last resort for America. Speaking at an industry event in Washington, Green noted that he wants to see the U.S. "use all we can, whether it is for my chemical industry, for transportation fuel, even [for] fracking, and then we want to sell the rest".
This sentiment flies in the face of recent projections for the U.S. natgas business. Which see LNG exports as the next logical step for America's gas market, giving a boost to pricing by accessing high-value international markets.
Many LNG export projects are now going to permitting. But comments like Green's suggest the approval process isn't going to be slam dunk.
Big lobbies amongst U.S. gas consumers also appear to be positioning themselves to oppose exports. This summer, major gas-fired power generator Calpine filed for intervenor status in federal proceedings to approve a new gas export pipeline from Texas to Mexico.
Petrochemical manufacturers too, will likely throw their weight behind keeping cheap gas in America. Leaders in this industry like Sasol have announced multi-billion dollar pet-chem refinery projects along the Gulf Coast, to take advantage of cheap gas feedstock in making their products.
With government and industry opinions starting to align, going could get rocky for the LNG export movement. Don't take this "next phase" for the gas industry as a given just yet.
Here's to tough choices,
By. Dave Forest