Monday, September 27, 2010
Just a few years ago the rule of thumb was that the United States was running low on big new natural gas fields and that to meet demand (currently running at 63 trillion cubic feet a year) we would need to start importing ever larger quantities of liquified natural gas, or LNG.
It was that reckoning that led companies like Cheniere Energy and Sempra Energy to navigate the sea of NIMBYism and build LNG import terminals. Then came the shale gas revolution. The Barnett, Haynesville, Eagle Ford, and Marcellus shales promise enough gas to supply the nation for 100 years, if they can be drilled safely.
Now, facing low prices of $3.80 per mmbtu and a glut of supply, natural gas producers are curbing their investments in drilling up new fields.
Penn Virginia, Marathon Oil, Noble Energy and Apache Corp all are slowing gas drilling. The scene is so dire for gas drillers that Dave Roberts, head of exploration at Marathon Oil Corp telling investors he doubts the gas biz “is going to get better any time soon and maybe within the span of my career.”
Really? Come on Dave, use your imagination. There’s a way out of this conundrum: let’s export gas. “The U.S. shale gas revolution has resulted in a massive reduction in the need for new LNG imports into North America – possibly even turning the U.S. into an exporter,” notes E. Russell (Rusty) Braziel, Managing Director of gas market forecaster Bentek Energy.
Those exports could start soon. In recent months Sempra, Cheniere and Freeport LNG have all asked the Federal Energy Regulatory Commission for permission to tweak their import terminals and make them export terminals.
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