Posts Tagged ‘export’

Jul
11
2013
5:45 pm

Natural gas exports on the rise

Over the past few years, the U.S. energy landscape has been transformed.

New drilling techniques have unlocked vast reserves of natural gas within shale rock formations and as the supply of natural gas soared, prices dropped. The U.S. is now producing more oil and gas than it imports. Experts are even raising the possibility that the country may one day be energy independent.

All of this serves as background to discuss an interesting development in the natural gas industry: The federal government recently granted permission for a terminal on the Gulf Coast of Texas to ship liquefied natural gas to Japan.

Now, this may not sound like a big deal. But gas producers have been lobbying to increase the amount of natural gas they can send overseas. Gas prices are much higher on the global market than they are here at home.

The decision is seen by many industry observers as an indication of the government’s willingness to approve even more gas exporting agreements. (Terminals are allowed to export natural gas to countries with whom the U.S. has a free trade agreement, but they must seek government approval to send gas elsewhere.)

So, what does this trend mean for the natural gas industry?

One concern is that exporting more natural gas will reduce domestic supply, raising prices for consumers. However, some say an increase in prices will provide an incentive for companies to produce more natural gas, keeping prices in check.

It’s important to remember that the volume of natural gas deposits accessible via new drilling techniques is vast. The contemplated increase in gas exports is comparatively much smaller and some expect a limited impact on domestic prices.

At Gas South, our natural gas experts study the industry closely with one goal in mind: to offer our customers great prices and the most reliable service.

So, what do you think about exporting natural gas?

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May
24
2013
2:27 pm

Hot topics: natural gas, manufacturing and exporting LNG

Last week, Gas South had the opportunity to host some of Georgia’s largest manufacturers at the Cherokee Town Club in Atlanta. We heard from industry experts, economists and lawyers regarding hot topics in the natural gas business.

We discussed the state of the natural gas market and listened to a presentation given by our very own Supply and Risk Management Manager, Michael Swartzell. We also explored the potential impact of exporting Liquid Natural Gas (LNG) and how it would affect the U.S. economy, a great discussion led by Roger Tutterow of Mercer University. The group also gained insight into the process of fracking through a session with Mr. Walt Standisky of Roper Pump Company. Lastly, David Wochner of Sutherland Asbill and Brennan gave an update on the regulatory environment for LNG and fracking.

The major takeaways from the sessions were:

- Natural gas is domestic, plentiful and changing the energy landscape of the United States

- The U.S. is the #1 producer of natural gas in the world

- Economists are predicting the shale gas boom to continue and that by 2040 annual natural gas production will rise by 50%

- Only two LNG export terminals are operating in the U.S.

- World demand and higher prices in other markets will continue to drive producers to push for more export terminals

- It is uncertain how many LNG export terminals will be approved by the Department of Energy

- Even with growing LNG exports, the increase in shale gas production should offset the offshore demand and keep prices stable

- The regulatory environment is not moving quickly and it is unlikely that any ruling will significantly impact prices

The following chart shows the huge increase in shale gas production expected by 2040.

Do you think exporting LNG is good for the US economy?

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