Exxon Mobil Corp. (XOM), the biggest U.S. oil producer, said efforts by Dow Chemical Co. (DOW) to limit the country’s natural gas exports would create a price cap for the commodity.
Dow is a member of America’s Energy Advantage, a group of manufacturers and gas distributors that says unfettered exports of liquefied natural gas may undermine the benefits of rising output from shale rock. Companies such as Dow want a return to government controls on gas prices that ended in the 1980s, said Stephen Pryor, president of Irving, Texas-based Exxon’s chemical business.
“That’s what they are calling for,” Pryor said yesterday in an interview in Houston. “It’s basically a price cap.”
Dow isn’t seeking a cap, said Kevin Kolevar, the Midland, Michigan-based company’s vice president for government affairs and public policy. The Department of Energy needs to consider effects on manufacturing, consumers and energy security before approving LNG exports, he said by telephone today. Dow isn’t calling for gas prices to be a trigger in the decision-making process, he said.
Exxon is considering exporting U.S. gas from LNG terminals in Alaska and Texas. Pryor said most studies forecast exports equal to 5 percent to 15 percent of U.S. gas demand, consistent with Exxon’s outlook. Production will rise with exports to keep price increases “moderate,” he said. He declined to provide a specific price forecast...