Exxon evaluates exporting natural gas
A sign shows gas prices at an Exxon service station on March 13, 2012 in Washington, DC.
David Brancaccio: America these days is the land of natural gas and now there's word Exxon Mobil has an idea about what it wants to do with some of the glut -- export it to Europe and maybe Asia. Exxon's CEO believes gas could surpass demand for coal worldwide by 2025.
Marketplace's David Gura join us live from Washington with the story. David, why is Exxon considering this?
David Gura: Well, things have changed over the last few years pretty radically, as a matter of fact. For a long-time, the U.S. was a country that imported a lot of natural gas, and I should say, we use natural gas for electricity, for cooking and heating, for transportation. But now companies like Exxon Mobil, they have gotten a lot better, as you said, at extracting natural gas here in North America from what are called "unconventional sources" or controversial sources like shale gas and coal bed methane. So, the tables have turned, the U.S. has a lot of natural gas, David, and the demand for it overseas is growing.
Brancaccio: What about concerns about energy independence. Why would we want to export this stuff?
Gura: From a business standpoint, prices for natural gas here in the U.S. are really low, at a decade-low. And across the Atlantic, they're really high. Europe gets most of its natural gas from Russia, through pipelines, and the U.S. is on track to overtake Russia as the world's biggest producer of natural gas.
Brancaccio: But, there are downsides right?
Gura: Let's see, we've mentioned two of them David. Energy independence is one and also the techniques companies use to extract natural gas is another. There are also economic concerns as well about exporting liquefied natural gas.
Sue Tierney is with the Analysis Group in Boston.
Sue Tierney: It also will have implications for gas markets in the U.S., because it would tend to raise the price of gas in the U.S., if that were to happen.
Gura: So, no doubt Exxon Mobile will be weighing all these factors. The company would have to secure export licenses from the government, and building plants that could liquefy natural gas, David, is very expensive.
Brancaccio: Marketplace's David Gura in Washington, thank you.
Gura: Thank you.