A top Exxon Mobil Corp. executive on Friday blasted opponents of exporting natural gas from the United States, where booming production has led to surpluses and low prices.
“It’s absolutely embarrassing for people in our industry at very high levels to make a case that’s blatantly to put money in their pocket,” Exxon Mobil Senior Vice President Michael Dolan said on the final day of the IHS CERAWeek energy conference at the Hilton Americas-Houston in downtown.
Dolan made the comments after discussing Exxon Mobil’s $25 billion purchase of natural gas producer XTO Energy. Exxon Mobil bought XTO in 2010, before a glut of gas caused a steep drop in prices for the resource, hurting XTO’s revenues and raising concerns about the acquisition.
While the United States market for natural gas is oversupplied, there is strong and growing demand overseas, prompting many producers to advocate for exporting the fossil fuel in a liquefied form.
But opponents have argued that opening the door to wider exports of liquefied natural gas could cause a sharp increase in prices that would hurt consumers of the cheap fuel in the United States. Dow Chemical Company has been the most prominent opponent of broad LNG exports, with high level executives arguing aggressively that the door for exports should not be thrown wide open.
“There’s a lot of natural gas today,” Dolan said. “All of those molecules are owned by some company, some private landowner in the United States… If, in their view, exporting natural gas is the best way for them to get value for the risks that they’ve taken, then that’s what they should be able to do.”
The federal government has granted only one permit to LNG export terminals for shipping of natural gas to countries with which the United States does not have a free-trade agreement.
Dolan’s address was meant to offer an outlook on the next 30 years of energy. He highlighted what he expected to be the continued dominance of hydrocarbon resources, including oil, natural gas and coal.
He said those sources would remain the most reliable and cost-effective, arguing that renewable energy technologies rely on government subsidies.
“They will depend on the willingness of taxpayers to finance these technologies over the long term,” Dolan said.
Exxon Mobil projects that 80 percent of the world’s energy needs through 2040 will be met with hydrocarbons, Dolan said.
He briefly discussed the company’s efforts to produce a hydrocarbon fuel from algae, but said progress was slow. The company has yet to find a way to produce fuel from algae in a way that is cost-effective and sustainable, he said.
Exxon Mobil is in its third year of a 10-year effort to develop fuel from aglae, Dolan said.
“I think we learned in the first few years is its probably harder than we had all hoped,” he said.