Analysis and Recommendations:
Natural Gas soared today, with reason. The price reached 2.746 and is still climbing at this time. Today’s new is all about a report on Dow Jones Newswires that Japan hopes it can secure liquefied-natural-gas supplies from U.S. shale-gas deposits, although the two countries don’t yet have a free-trade agreement.
“We are conducting negotiations at the moment so that it can be exported unconditionally, even if we don’t have an FTA,” Yukio Edano, Japan’s minister for economy, trade and industry, said in an interview at St. Petersburg in Russia, according to the report.
In the absence of domestic production of such fuels, Japan pays high prices for LNG imports. Gas prices in the U.S. are relatively much lower.
Although new production techniques have boosted U.S. shale-gas output and turned the country into the world’s biggest gas producer, opposition to large-scale gas exports is rising, Dow Jones reported.
The report added that while the Department of Energy could be expected to approve requests for LNG exports to countries with which the U.S. has free-trade agreements, the agency has been delaying decisions on exports to other countries until it completes its studies on the potential domestic impact from exports.
Edano said he believed that the U.S. could meet Japan’s LNG needs without hurting domestic consumers. “There is plenty of room for [the U.S.] to export shale gas,” he reportedly added.
Ever since the tsunami that destroyed or caused the closure of all the Islands nuclear electric production the country has been facing difficult securing the energy it needs to produce electricity. This new agreement would help boost the US exports and help reduce the Japanese trade balance which has been distorted because of its imports of crude oil.
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