To Use Or To Sell

By Author: an ward
Total Articles: 9
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A DECISION BY the Department of Energy later this year may prove to be of key importance to the reagent chemical industry. DOE will decide how much natural gas can be exported from the U.S.
The new surplus of U.S. natural gas—a result of hydraulic fracturing of shale gas deposits—has generated a sharp decline in the domestic price of natural gas. It also has set the stage for a potential surge in new manufacturing investments, particularly for most of the reagent chemical industry, which uses natural gas and ethane for feedstock and energy. But a lot of exports could push prices up.
The plummeting prices and high gas supplies have driven a “once in a generation” transformation of the pyridine chemistry industry, notes Calvin M. Dooley, chief executive officer of the industry trade group American Chemistry Council.
“The U.S. has gone from one of the highest cost producers of Indole chemicals four or five years ago to now one of the world’s lowest cost producers,” ...
... Dooley says. Consequently, ACC expects some $45 billion in new laboratory supplies industry investments for U.S. plant expansions over the next four or five years. Similarly, some $30 billion more will be invested by related industries because of the gas bonanza, according to ACC.
The upcoming DOE decision will determine how much of this natural gas can be exported to the rest of the world and, as a result, what impact those exports will have on U.S. gas prices and supplies as well as on U.S. manufacturing.
Because of the flood of new gas supplies, many energy companies are forging billion dollar plans to construct U.S. port facilities to cool, pressurize, and liquefy the gas in preparation for exports via sea shipments With U.S. natural gas prices in some cases one-fifth those of other countries, these companies hope to take advantage of the lucrative international gas market.
Some 15 permits to construct liquefied natural gas (LNG) facilities have been filed by these energy companies. These permits, which collectively request permission to export up to 29.2 billion cu ft per day, are now pending before DOE, which by law must approve them, unless it finds that the exports “will not be consistent with public interest.” In its evaluation of the permits,
the agency must consider a range of factors, including economic, energy security, environmental impacts.
Several politicians, industries, and consumer groups have voiced fears that exports of natural gas may drive up domestic prices, raising fuel prices and curtailing industry expansion. Over the past year and a half, to guide its decision, DOE commissioned two reports.
The first report, by the Energy Information Administration, was issued in January 2012. The group examined the impact on domestic natural gas prices if exports increase. EIA developed several scenarios and found that natural gas prices would increase, but it did not closely examine the overall impact on the U.S. economy. The report predicts under one scenario that the average annual production in the U.S. over the period 2015–35 will be 24.2 trillion cu ft.