Friday, January 28, 2011

Gambling with Cheniere

I've started to get excited - at least a little bit - about the prospect of LNG export from the U.S.  Outside of the Kitimat project in western Canada, the closest possibility of realizing LNG export is converting import facilities at  Freeport, TX and Cameron, LA to export terminals.  It is not a short-term fix to gas prices, as the first facility is at least four years off on the best timeline.

Lest I get too excited, I've got the New York Times to bring me back to reality.  An article in today's edition  about Cheniere Energy (owner of the Cameron, LA facility) discusses the pros and cons of the conversion and paints the CEO of the company as something of a speculator.  More than anything, it reminds me that to create a viable market for natural gas in North America, we have to start at home through organic growth and capturing market share in power generation and transportation.  Export is nice (although it might eventually throw a wrench in pricing and demand), but progress starts at home.

1 comment:

Fivethousandoverlibor said...

Right on Mr. Hutchinson. Develop market-clearing demand here first.

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