High oil prices and new technologies have generated profound changes in the world energy map, due to a decrease in oil imports and the discovery of abundant reserves of natural gas in the U.S.
New technologies, such as hydraulic fracturing and horizontal drilling, increased U.S. domestic production of natural gas between 2005-2011 by almost 30 percent. This abundance brought down natural gas prices from $14 per million British thermal units in 2008 to around $2 in 2012, and $3.20 this year.
Comparing those prices of natural gas with $11 in Europe and $14 in Asia, U.S. producers are interested in exporting to profit from the price differentials. This has generated opposition among big consumers of natural gas, such as producers of fertilizers and steelmakers, grouped in an organization-denominated America's Energy Advantage. On the other side, the producers of natural gas include giants such as Exxon Mobil and about 300 companies grouped in what is known as the Marcellus Shale Coalition.
Additionally, the debate has been joined by environmental organizations, such as the influential Sierra Club, concerned that an increase in external demand will intensify production and therefore have negative environmental consequences.
The last word belongs to the Department of Energy, responsible for issuing the licenses required to permit exports of natural gas to countries that have not signed a free trade agreement with the U.S.
Isaac Cohen is an international analyst and consultant, a commentator on economic and financial issues for CNN en Espaņol TV and radio, and a former director, UNECLAC Washington Office.
Most Popular Stories
- Accenture Gets 8 Percent Bump in Q1
- Insurance Rule Change Angers Industry
- Revised GDP Up 4.1 Percent in 3rd Quarter
- Alex Kinsey, Sierra Deaton Crowned 'X-Factor' Champs
- Obama Opens Last-Minute Loophole in Insurance Law
- Obama's Dad Was Abusive Drunk, Half Brother Says
- Brian Boitano Announces That He Is Gay
- BlackBerry Posts $4.4 Billion Quarterly Net Loss
- The Costs of Repealing Obamacare
- Economic Growth Boosts U.S. Futures