CERAWeek ’13: Conoco calls for US LNG exports, Keystone XL approval

By Ben DuBose
Online Editor

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 administration’s “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. Don’t 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 oil.

“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 elsewhere.

“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 gas.”

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 footprint.

“The naysayers out there who claim it’s 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 Canada’s oil sands,” Lance said. “Yet the Keystone XL pipeline remains blocked.”

“You’re 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.

“We’re 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.

The Author

Related News

From the Archive