Thorny Issue: Dominion Files Request to Export Shale Gas
One of the strongest arguments in favor of drilling for Marcellus and other shale gas in the U.S. is that it provides a cheap alternative fuel for Americans—a “home grown” energy source that benefits everyone. It’s a simple and undeniable fact: Cheap energy translates into economic prosperity for all citizens. Cheap energy makes it easier for businesses to produce goods and services, and that means jobs.
Energy companies often make the “cheap domestic energy” argument when talking about the benefits of shale gas drilling—rightfully so. But when those same companies then start exporting natural gas, well, it’s a tad hypocritical. Exporting leads to less supplies here at home, and less supplies means higher prices. Energy companies will argue we have more than enough—an excess of natural gas—and by exporting they create more jobs here at home. But others (like MDN) are not so sure that argument holds up, especially for a nascent industry with huge potential to transform the energy picture here at home.
Dominion Resources is the latest to make application with the DOE to start exporting shale gas:
Citing abundant access to supplies of natural gas from Pennsylvania’s Marcellus shale and elsewhere, Virginia-based Dominion Resources Inc. said on Friday that it filed a request with the Department of Energy to begin exporting liquefied gas from its Cove Point terminal in Maryland.
The company seeks to export up to 1 billion cubic feet of natural gas a day beginning in late 2016, said spokesman Dan Donovan.
Dominion’s application, filed late Thursday [Sept. 1], envisions two steps, Donovan said. First, the company is applying to export to countries that have free trade agreements with the United States. That application will be quickly followed by one to allow exports to non-FTA countries. That is a long list and includes many energy-thirsty countries in Asia, such as China.
The Tribune-Review previously reported that Dominion would likely join a growing group of American companies lining up to start shipping natural gas to countries overseas. One company, Texas-based Cheniere Energy Inc., has won DOE approval to export 2.2 billion cubic feet a day from its Sabine Pass terminal in Louisiana.
Two other major energy companies have applied to export a total of 3.4 billion cubic feet of natural gas a day. Another company, Oregon’s Jordan Cover Energy Partners LLC, expects to make a decision soon on applying to export about 1 billion cubic feet of natural gas a day, project manager Robert Braddock said last month.
If all of these requests were approved, the exports combined would amount to more than 12 percent of American natural gas production, based on 2010 levels.*
Should 12 percent of our domestic natural gas supplies be exported? What do you think? Leave a comment below.
*Pittsburgh Tribune-Review (Sep 3, 2011) – Dominion files request to export liquefied natural gas
Like in any business, cash flow is king. With all the capital money they are spending to drill and build downstream infrastructures they need to sell some gas. I would guess that when they have their processing facility and possible a cracker built they will not be exporting as much if any at all.
Oh…My…god. I cannot believe you and I might actually agree on something. I think I’ve posted this before on your site. The ONLY way the gas companies can justify the money they are sinking into this bubble is to sell it overseas. There is not an infrastructure in place in the US yet to support using natural gas for as many things as we should for transitional energy use. Americans are looking for something to call their own. We have been stripped of our labor force, we have been stripped of our other natural resources, and now we are clinging with white knuckles to an idea that we might have something that can keep us independent and self-sufficient for decades to come.
The gas companies don’t care about America, Americans, or our self-sufficiency. They care about money and that’s it. They tell us that if we hand over our land for drilling, we will have cheaper energy here. The reason they want to ship it overseas is because if the infrastructure isn’t in place here, they can’t create enough demand. If there isn’t a greater demand, they can’t charge more for the gas. If the gas was nationalized, we could keep that gas in the ground until we needed it and not be concerned about running out. But no. The gas companies want to suck up that resource and fill their pockets with all they can as quickly as they can until they pump that dry too. When is enough enough????!!!!!!
Absolutely, lets take back some of th etrillions of dollars we have export to other countries for decades buying their oil. That export demand will maintain stable prices and keep the production levels high and encourage more developmentl. Obama recently said we need jobs, jobs, jobs….. This is about the only market that will drive jobs. Plus the supporting industries to the drillers, (quarries, machinery mfg, steel mills, etc) will also reap the benefits. This should be a no-brainer.
I think we have to take into consideration what happens if we have a surplus of NG. Cheniere Energy is scheduled to have their LNG export facility (converted from an import) done earlier than Dominion (I believe 2014). I do think a close eye should be kept on making sure our domestic needs are taken care of first, but I’m all for having a commodity in the world market if there’s a surplus.
no i do not think the gas co’s should export our natural resources. the politicians have already exported many of our jobs to foreign countries. if we export our gas, it will be an advantage to the outsourced jobs market to continue undercutting our domestic workers, and put this country in worse shape than it is. i think the cheaper oil & gas would better serve our country to get it ‘s unemployed and under employed workers back to a life i feel they derserve. all these years of fighting for oil in the mideast, and now you want to give it away? what the h#%@ is wrong with you people. look at the veterans who have given up their lives so the oil pipeline can remain open to our country
Two comments:
The U.S. is in need of products to export. This could become one.
In a neo-liberal capitalist economy, one would only expect that the profit seeking motive prevails.
I would like to see the gas stay here at home but with the prices so low companies will have to find ways to make drilling more profitable. Everyone wants cheap gas but if it costs more to produce than it can be sold for then the industry will go away.
I respectfully disagree with the statement that the gas companies do not care about America. I will agree with you in that the profit motive is what drives most major business decisions, but if I’m not mistaken, that is the same motive that drives the decision making process at the Big 3 automakers, McDonald’s, Walmart, and a mom & pop grocery store on a small street corner. The profit motive and the ability to exercise it has grown America from sea to shining sea, and our founding fathers had the good sense to create a culture and a platform to make it happen. Nationalizing our oil & gas industry would place us in the rank and file of Venesuela under the thumb of Hugo Chavez, Cuba under the Castros, most of the oil/gas producing nations on the African continent. The common denominator among these nations are that they’re 3rd world nations ruled by evil people.. Be careful what you wish for.
Basic economics will tell us that in order to survive in any business environment, you have to produce a product that customers will buy for more money than what you have invested in it, and in this case, Dominion has found an avenue to reap rewards from the money that it has invested… Go get’em, Dominion!!!
I live in the heart of the Marcellus region. The gas companies have actually been very good to us and some of them really do care about the community. They hire locals, the use local businesses, they pay for training, donate to our schools, libraries, fire/rescue squads and community projects. They pay for extra training and equipment for our fire companies. They hold town hall meetings and community picnics. They fix our roads before PennDot. Is it all wonderful? No. Are there accidents? of course. What they are doing here is new. Some of the concepts are old but the actual processes are new. Geologically our area is very different so of couse they will run into issues. However they address them quickly not only out of concern for the environment and the peoples but because it also makes good business sense. Note the gas companies have pulled out of areas where the community does not want them.
If were are going to export it then nationalize it and give every tax payer an annual check.
Thanks for commenting Lori. Good to hear from people in areas where drilling is happening.
No thanks Beth. If you want to live in a place that nationalizes things, I suggest you relocate to Cuba or Venezuela and see what a “paradise” such a concept produces.
Once again Big Oil has tried to sell us a lie and then scratch their heads wondering why folks are against the Keystone Pipeline and other oil exploration, production projects. America has reduced oil consumption to include more oil drilling permits and rigs drilling oil since 2009 and yet, oil prices have continued to escalate! If Big oil would commit to keeping domestic oil production domestically then perhaps folks would support their business ventures but when they perpetually lie to the public for profit at the expense of the environment and regular folks pocketbook, they will continue to protests new drilling!