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November 20-21, 2014

Industrial giants ExxonMobil, Dow Chemical square off over US LNG exports

ExxonMobil said that efforts by Dow Chemical Co. to limit U.S. natural gas exports would create a price cap for the commodity, Bloomberg said. Dow, a member of America’s Energy Advantage, a group of manufacturers and gas distributors opposed to unfettered exports of LNG, wants a return to government controls on gas prices that ended in the 1980s, said Stephen Pryor, president of ExxonMobil’s chemical business. “That’s what they are calling for. It’s basically a price cap,” Pryor said in an interview with Bloomberg. According to Dow’s Keven Kolevar, the company’s vice president for government affairs and public policy, Dow isn’t seeking a cap. Kolevar said that the DOE needs to consider effects of LNG exports on manufacturing, consumers and energy security. ExxonMobil plans to export U.S. natural gas from terminals in Alaska and Texas.

“We must oppose protectionism in our home countries,” Pryor said at the IHS World Petrochemical Conference in Houston. “These proposals to block LNG investments, justified by artificial price caps, represent a selective and harmful departure from free-market and free-trade principles.”  Dow cited a report by Charles River Associates that states that LNG exports may contribute to a gas shortage by 2030 that would triple prices. “We do have concerns that there is a tipping point at which LNG exports turn from a net positive for this nation to a net negative,” Kolevar said. “The problem is, once you hit that point, it’s too late to go back.” Dow, which plans to spend US$4 billion on new chemical plants on the Texas coast, uses gas to run its factories and as a raw material for making plastics and other materials.


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