Japan Asking for More US Natural Gas

Japan is feeling the effects of shuttering its nuclear power plants, and needs liquified natural gas  to run its power plants.  According to Bloomberg News, Prime Minister Abe is going to ask President Obama to approve more outlets for LNG in the US, to allow Japan some alternatives to LNG it is buying now.

The U.S. has only approved one export plant for shipments to countries without a free-trade agreement. Cheniere Energy Inc.’s plant at Sabine Pass is due to begin exports in 2015. The U.S. may ship about 50 million tons of LNG by the end of the decade, Royal Dutch Shell Plc Chief Executive Officer Peter Voser said last month. That compares with 77 million tons a year from Qatar, currently the world’s top exporter.

Japan paid an average of 67,210 yen a metric ton for LNG in December, according to data from the country’s Ministry of Finance. That’s equivalent to $15.79 per million British thermal units. U.S. gas futures traded in New York hit a 10-year low in April of less than $2 per million Btus. The gas price rose 0.2 percent to $3.3 per million Btus today.

Some politicians, such as Rep Markey of Massachusetts, oppose sending gas overseas because they think it will drive up prices here in the US.  As prices are uneconomical for drilling at this time in many locations, a little higher price for gas would be welcome,  and would help keep America producing an abundant resource.  Here's hoping President Obama will recognize the godsend that the Japanese Prime Minister's request represents.