Shale gas export: economics and politics
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?