Former Exxon CEO Says Shale Unknowns Could Hinder LNG Exports

April 2012, Vol. 239 No. 4

Political constraints and concerns that production gains at shale fields aren’t sustainable will hinder development of LNG export plants in the United States, former ExxonMobil chief Lee Raymond said in an article reported by Bloomberg.

“There is going to be a big debate in the U.S. as to whether they’re going to permit the export of LNG,” Raymond said in an interview in Oslo. “Even if you get past the politics, you have to test whether the resource base is sufficient. It’s going to be a little while before people are really confident that there is going to be a sufficient amount of gas for 30 years to support the construction of an LNG plant,” said Raymond, who stepped down in 2005.

“I’m frankly not sure that we have enough experience with shale gas to make the kind of judgment you’d have to make. … If you build any LNG, from a producer’s point of view, you can only do that … if you’re assured that you have a long-term competitive supply because these are huge investments.”

The U.S. is not the only country with shale rock, though “just because it has the name shale on it doesn’t mean it’s something that would be economic to try to develop,” Raymond said. Production of shale gas in China, however, would be a “real game changer,” he added.

“China is run by engineers, it’s not run by politicians. … They’re technically competent and they approach things in the same way a good engineering group at a major oil company would approach things.”

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