US senator questions oil and gas companies on rising LNG exports, gas prices

US Senator Elizabeth Warren has joined those criticizing US energy companies for higher domestic natural gas prices this winter, writing 11 gas companies seeking explanations for exports of record amounts of US natural gas.

In letters dated Nov. 23, the Massachusetts Democrat expressed concerns about the impact of rising gas prices on families struggling to pay their bills and the extent to which prices are "being driven by energy companies' corporate greed and profiteering."

Warren's letters come as the US Energy Information Administration in its Oct. 13 winter fuels outlook predicted higher prices for the winter season across all fuels and US regions compared with last winter, citing a colder winter than last year in much of the US and returning economic growth following the pandemic-related downturn.

According to S&P Global Platts M2MS forward curve data, Henry Hub winter strip settled at $4.78/MMBtu Nov. 23, up from a forward average at $2.73 a year earlier.

During recent questioning before the Senate Energy and Natural Resources Committee, EIA Acting Administrator Stephen Nalley Nov. 16 said fundamentals in the US market are "probably still primarily at play" in the higher US natural gas prices, although high prices in Europe and Asia were having an impact. He noted that EIA sees US LNG exports increasing 50% in 2021 and 17% in 2022.

In her letter, Warren argued that rather than being a result of "a market that works for American families," the higher US natural gas prices "appear to be the result of a successful profit maximization effort by massive multinational oil and gas conglomerates."

Details by Dec. 7

She asked companies to detail by Dec. 7 the amount of gas, for each of the last 10 years, that they had exported, the share of the company's total gas production that was exported, as well as profit margins for domestic and exported natural gas.

She also asked whether top executives had been awarded bonuses based on increasing exports.

"Has your company considered cutting, suspending, or ending exports of natural gas to help ease spiking domestic prices?," she said in the letter.

Companies Warren is questioning include ConocoPhillips, EQT, ExxonMobil, Coterra, BP, Antero Resources, Chesapeake Energy, Ascent Resources, Southwestern Energy, Range Resources, and Occidental Petroleum, according to the senator's press release.

Her criticism of the industry follows recent letters to the Biden administration from the Industrial Energy Consumers of America. A long-time opponent of US LNG exports, IECA has been asking the Department of Energy to reconsider whether its export authorizations are in the public interest and consider a "consumer safety valve" on exports to non-free trade agreement countries.

In response to Warren's letter, API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola, asserted that US policymakers also play a role in affecting US gas supplies.

"Rising natural gas costs reflect an imbalance between supply and demand that is exacerbated in regions like the Northeast due to added state-level policy restrictions on building much-needed gas infrastructure that has made the region more reliant on foreign imports," he said.

Domestic gas production has recently begun to rebound. On Nov. 24, US gas production reached a nearly two-year high at over 95 Bcf/d, according to Platts Analytics. The uptick comes as producers respond to strong crude, natural gas and refined product prices, with an uptick in drilling activity, which is approaching pre-pandemic levels.