Industry leader says natural gas exports should be approved

Posted Friday, May. 24, 2013  comments  Print Reprints

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The president of the American Petroleum Institute says chemical and other interests that object to exporting U.S. natural gas are limited to just “a handful, but they’re very shrill.”

But some opposition is waning and more permits for export terminals should be approved, Jack Gerard told reporters on Thursday during a breakfast meeting in Dallas. API is the Washington-based trade association for U.S. oil and gas producers.

Gerard said he believes that Dow Chemical, which has been among the most vocal U.S. companies questioning just how much natural gas the nation should allow to be exported, “has backed off a bit” in its criticism. Dow and other petrochemical makers use ethylene, derived from natural gas components, as a principal feedstock for their production plants.

Dow last week said it supported the U.S. Department of Energy’s decision on May 17 to approve exports from a liquefied natural gas (LNG) terminal on the Texas coast. Its prepared statement added that it would take a wait-and-see approach to remaining applications, saying it supported “decisions like this one, which follow the established process and consider the cumulative impact of each permit on our overall economy.”

The application for LNG exports by Freeport LNG was one of about 20 gas export applications before federal regulators. Newly-appointed Energy Secretary Ernst Moniz on Tuesday said he would delay further decisions pending further study.

Gerard said that rather than picking winners and losers for the permits, the federal government should grant all the permits, “unless there’s some reason to say ‘no,’ and let the market decide.” He said the challenge of financing the multi-billion-dollar cost of a new LNG terminal is enough of a hurdle to limit the number built.

Some big users of natural gas, along with consumer groups, fear LNG exports will drive up U.S. prices, which a year ago hit their lowest levels in a decade at under $2 per 1,000 cubic feet. They have since risen, closing Thursday at $4.26.

Jim Fuquay, 817-390-7552 Twitter: @jimfuquay

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