The promise for US gas exports in the future and current plans – a dream or a likely outcome

An article in the New York Times (January 4, 2013) describes worries that the promise of US natural gas exports may falter. Currently, US natural gas prices are reported to be $3.30 per thousand cubic feet, while prices in Asia for the same volume are over $15. But the rising demand for natural gas and the rapidly improving technology suggest that other countries will also start fracking initiatives and thus develop their own sources of supply closer to demand. If global prices dropped to $ 6, the export market economics would vanish. A US terminal for exports would cost over $ 100 million and could only be financed with long term purchase agreements. Does the export risk suggest that dreams of vast export volumes are likely to fizzle ? Will exports of natural gas raise domestic prices and decrease incentives for growth in domestic US production of chemicals and plastics ? Should the focus be on exporting fracking technology and chemicals rather than exporting gas ?

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About aviyer2010

Professor
This entry was posted in Global Contexts, Operations Management, Supply Chain Issues, Sustainability and tagged , , , , , . Bookmark the permalink.

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