Shale gas ex­port: eco­nom­ics and pol­i­tics

Down to Earth - - COVER STORY -

TO­DAY THE US is ready to ex­port gas, thanks to the shale gas revo­lu­tion. The in­dus­try is ea­ger, but the Congress has put a mora­to­rium on ex­ports. The price of gas in the US is about $3.0 per mil­lion Bri­tish ther­mal units (MMBtu). At this price, US com­pa­nies will not be able to sus­tain their busi­ness. They are, there­fore, look­ing for ex­ports to Asia where the prices are high. For com­par­i­son, In­dia buys LNG from Qatar at $13.0/MMBtu. US com­pa­nies have also signed long-term con­tracts with Ja­pan and In­dia.

Many ex­perts be­lieve that US com­pa­nies have a win­dow of op­por­tu­nity to ex­port gas to Asia till 2020 at $12/MMBtu. Af­ter 2020, Aus­tralia, Pa­pua New Guinea and East Africa will start sup­ply­ing gas and com­pete with the US. Coun­tries like China and In­dia will also drill for gas. Be­sides, in In­dia and China, coal will com­pete with gas in the elec­tric­ity sec­tor. The only way the im­ported LNG will re­main vi­able is if a car­bon tax is put on coal.

The ques­tion, one is forced to ask is: does the US anti-coal cam­paign in Asia has some­thing to do with ex­port­ing shale gas?

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