‘Drill, Baby, Drill' Mantra Set to Make US LNG Exports Less Competitive
Welcome to Energy Daily, our guide to the commodities markets powering the global economy. Today, US reporter Ruth Liao and Asia Energy Team Leader Stephen Stapczynski look at how the White House's 'drill, baby, drill' policy may have repercussions for domestic liquefied natural gas.
President Donald Trump's push to make oil cheap again and rein in inflation may end up triggering unforeseen, and negative, consequences for US LNG exporters.
The reason is that most liquefied natural gas producers abroad price their long-term contracts to a percentage of the benchmark oil price, an industry practice dating to the 1970s. The US, meanwhile, links the vast majority of its shipments to the domestic gas marker known as Henry Hub.
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