US natural gas producers have been keeping their fingers crossed that the next energy bill out of Congress would include major incentives for the fuel. They were unhappy with the Waxman-Markey proposal for barely mentioning natural gas and have been in Washington ever since trying to get lawmakers to recognise the benefits of natural gas.
The American Petroleum Institute says it is still considering its view on Senators John Kerry and Joe Lieberman’s draft bill. Refiners are unhappy, while the electric power industry has been broadly very supportive. But the natural gas industry already feels the plan is a disappointment. In the words of Regina Hopper, chief executive of America’s Natural Gas Alliance:
“We appreciate the inclusion of language aimed at helping move toward the greater use of natural gas in merchant power generation and vehicles. While a useful starting point, we believe much more could be done right now to significantly reduce greenhouse gases and other pollutants by providing clean energy transition incentives to electric utilities as well.”
Meanwhile, the shale boom continues to attract foreign investors. The latest came this week, when two of Asia’s most active investment funds agreed to spend close to $1bn to acquire a landmark stake in a leading US producer of natural gas from shale rock, following a string of foreign investors in the production boom. Temasek, the Singapore state investment fund, and Hopu Investment Management, a Beijing-based firm, have agreed to buy $600m of convertible preferred stock in New York-listed Chesapeake Energy. In recent years Chesapeake has done deals with Total of France, the UK’s BP and Norway’s StatoilHydro to help fund development of its fields. And even the US majors are getting interested, after decades of having favored global fields. Indeed, ExxonMobil hopes to complete in this second quarter a $41bn deal to buy XTO, the shale gas specialist.
Yet it seems not everyone sees the benefits the industry is toting.
While investors continue to see gas as a key player in the US’ energy future, lawmakers have not yet committed. Environmentalists question what the fracturing of rock underground is doing to groundwater and what the entire process does to air pollution. That is not to say there is not a growing recognition of the importance of gas in Congress – as individual Congressmen see production cropping up in their backyards, an increasing number of them have signalled their support.
On October 1, Congressman Tim Murphy and Congressman Dan Boren launched the Congressional Natural Gas Caucus to develop Congressional policy on the importance of gas in the nation’s energy portfolio. More than 70 Congressmen have signed on. But that support has yet to translate into major incentives to grow the use of the fuel in the US.
Related links:
Natural gas fighting difficult battle in Washington – FT Energy Source
