OUR THOUGHTS ON:

China's Impact on Natural Gas

Energy & Resources

By Theodore Pettko

PRIMARY CONTACT: Theodore Pettko CPA (Pittsburgh)

With the abundance of natural gas here in the United States, energy companies have been promoting the exportation of liquefied natural gas.  BP last month signed a $20 billion deal to supply liquefied natural gas to China National Offshore Oil Corporation starting in 2019.  BP’s projected export plant; awaiting federal approval, will be located in Freeport, Texas.  It appears that China is looking at using liquefied natural gas as an energy source due to the environmental impact that coal-fired power plants are having on air quality in its cities.  Considering China’s demand for natural gas in the next five years is expected to double, an opportunity exists for western energy companies to begin exporting.

However, Australia and Russia are also in the mix to supply China with liquefied natural gas.  Australia has seven facilities under contract for the production of liquefied natural gas.  Russia recently signed a $400 billion deal to sell natural gas to China.  Dominion is working on an export hub in Cove Point, Maryland, but is facing heavy opposition by environmental groups, nearby residents, and even some U.S. manufacturers that rely on inexpensive natural gas as a power source.  Environmental groups are concerned about the environmental impact of gas shipping tankers on the Chesapeake Bay and the impact of increased demand for fracking from additional drilling. 

China is one of the variables in the tangled web of natural gas prices and demand, but only time will tell until we are able to export natural gas.

© 2014 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at contactSD@schneiderdowns.com.

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2018 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

comments