By Ben DuBose
HOUSTON -- The chairman and chief executive of
ConocoPhillips is calling on US regulators to allow market
forces to dictate critical policy decisions such as possible LNG
exports and approval of the Keystone XL pipeline system.
Ryan Lance, who delivered the keynote address Tuesday at the
IHS CERAWeek 2013 conference in Houston, cited the Obama
administrations all of the above pledge on
energy policy as a roadmap for future decisions.
It should live up to those words, Lance said of
upcoming administrative policy decisions. Let the market
choose the best ways to supply affordable energy and meet
environmental standards. Dont pick preferred energy
sources or solutions.
In the case of LNG
exports, Lance added that he believes governments should be
good international trading partners.
We live in an interconnected, mutually dependent world
that needs free trade, Lance said. In the case of
the US, this means allowing future LNG
exports and perhaps at some point even exports of
They would improve the US balance of trade, and create
jobs and income both here and in the importing
countries, he added.
ConocoPhillips stance in favor of exports runs against
some industry rivals such as Dow Chemical, who prefer the gas
largely remain in the US, citing reasons of domestic energy
security. Dow and other petrochemical companies have planned
new US plants in coming years, largely based on an assumption
of cheap gas supply for use as feedstock.
Opening up the gas to global markets, in theory, could raise
prices. But for global companies with significant upstream
stakes such as Conoco, any downside to the US could be made up
As a company, we certainly support exports, said
Lance. We ought to be exporting the resource that we
have. We have a century of availability on the natural
gas side in the US.
It makes an imminent amount of sense to connect the
markets that need a lot of natural
gas with those that have a lot of natural
On the Keystone XL front, Lance praised Canadian industry
for doing a great job of managing greenhouse gases,
adding that the industry has done well in reducing its
The naysayers out there who claim its such a
dirty crude are misinformed, he said.
As such, Lance believes the decision should come down to
market needs, which in this case are substantial.
The US needs more capacity to transport oil from the
new shale fields and Canadas oil sands, Lance said.
Yet the Keystone XL pipeline remains blocked.
Youre importing about 800,000 barrels per day to
the Gulf Coast, he continued. These refineries are
tooled up to handle that level of heavy crude. It just makes
sense. Think about the value that creates along the value
chain, in regards to margins and differentials.
Lance cited the oil and gas industry as vital to the US
economy, adding that he believed the industry has open
lines of communication with the Obama administration on
the pending policy decisions.
Were one of the solutions to the economic
problems the country is having today, he said. We
mostly need to get our story out there and educate them on the
value of oil and gas.
We look forward to those conversations.
The IHS CERAWeek conference continues through Friday at the
Hilton Americas in downtown Houston.