U.S. Shale Gas Exports Are ‘Dead in the Water’

Cove Point LNG, under construction, is slated to export gas from the Marcellus Shale to India and Japan. But what if there isn't enough gas to export?
Cove Point LNG is slated to export gas from the Marcellus Shale to India and Japan. But what if there isn’t enough gas to export?

By Jim Flood, ieefa.org

The potential for exports of U.S. natural gas is not as rosy as proponents once imagined, said two panelists at this week’s New Energy Finance 2015 conference.

Here’s Charlie Blanchard of Bloomberg New Energy Finance: “We don’t think that Pennsylvania gas makes it to Miami, much less Tokyo. There’s really only enough of it to supply the eastern U.S. There’s not so much of it that we can export it everywhere.”

Deborah Lawrence of Energy Policy Forum painted a more dire picture, asserting that shale exports are “dead in the water” and that U.S. shale production will peak between 2018 and 2020.

She added that reserves of U.S. shale gas have been “vastly overestimated” in regulatory submissions because of an SEC rule that enabled companies to expand their definition of the term in hopes of borrowing more money.

Lawrence: “What we know is that there’s been probably considerable money borrowed on shales that either was borrowed based on assets that don’t exist or will never be commercially viable to extract.”

Deborah Lawrence: “There’s been probably considerable money borrowed on shales that either was borrowed based on assets that don’t exist or will never be commercially viable to extract.”
Deborah Lawrence: “There’s been probably considerable money borrowed on shales that either was borrowed based on assets that don’t exist or will never be commercially viable to extract.”

Lawrence added that the solar industry, by contrast, is on the rise. She presented data showing how solar has created more new jobs than oil and gas combined in the past three years and that solar stocks have been outperforming oil and gas stocks. Because of renewables, she said, “I’m actually one of the most optimistic people out there on the energy markets, because I think we are truly on the cusp of a new energy paradigm. I think there are dynamics occurring that are going to create an environment for probably the greatest wealth creation you or I will ever see.”

The four-day conference, which convened on the campus of New York University and was sponsored by IEEFA and the Institute for Policy Integrity at NYU’s School of Law, ended Thursday afternoon.

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