12 September 2013 23:03 [Source: ICIS news]
By Jeremy Pafford
HOUSTON (ICIS)--The ?xml:namespace>
Dow’s response comes a day after the Department of Energy (DOE) approved Dominion Energy’s application to export LNG from its planned Cove Point project in
The approval covers countries with which the
The Dominion Energy approval may signal a quickening of the pace on application processing. The last approval was handed down to the
Dow has advocated a “prudent, measured and balanced approach to permit approvals”, a company spokesperson said on Tuesday.
The company believes the amount of DOE approvals could be nearing a threshold that could affect natural gas prices, which Dow and other petrochemical companies use as a feedstock for production of ethylene and other petrochemicals.
US Henry Hub natural gas prices have hovered in the $3.50-4.00/MMBtu range for most of the summer.
“This latest approval brings the total amount of export licences approved to approximately 6.3 bcf/day,” the Dow spokesperson said. “At this level – which is almost 10% of current
Dow has not been alone in its thinking, as it has joined up with petrochemical companies such as Celanese, Eastman and Huntsman to form
"We are now approaching a volume of LNG exports that many experts project will impact price and volatility for natural gas,” said Jennifer Diggins, director of public affairs for Nucor and chairperson of the AEA.
The American Petroleum Institute (API) disagreed, calling Wednesday’s decision “progress toward an enormous opportunity for [President Barack Obama’s] administration to bolster job creation and economic growth”.
“The shale gas revolution has fundamentally changed the energy equation, positioning the United States as an energy superpower that can provide ample, affordable supplies to the domestic and international markets, and in a way that has helped reduce carbon dioxide emissions to near twenty-year lows,” the API said.
There is plenty of room in the market for further LNG export application approvals, said Dr Margo Thorning, senior vice president and chief economist with the American Council for Capital Formation (ACCF).
The ACCF has organised the Act on LNG campaign to push for a more unfettered process to gaining DOE export approvals – or get the DOE basically out of the way of the process.
“I think the DOE should step out of the way,” Thorning said in a telephone interview.
Thorning cited ever-expanding shale gas finds in recent years – a trend she sees continuing – as proof that there is room for LNG exports and cheap ethane feedstock for companies such as Dow.
“The resource is there,” she said.
Increasing LNG exports up to 16 bcf/day would have a net effect of only an additional $1/MMBtu – not enough to erode US petrochemical makers’ feedstock advantage over many regions of the world, Thorning said.
Dow does not share that sentiment.
“Dow will continue to advocate that the DOE move carefully in ensuring our nation doesn’t create an export policy that could potentially hurt gas consumers such as manufacturers, utilities, homeowners and the American public,” the company said. “We call on the DOE to establish and pursue a robust review for remaining applications to ensure American consumers are not subject to costly and unpredictable energy prices.”
Additional reporting by Ruth Liao
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