BHP Billiton chairman urges US to promote exports of onshore oil, natural gas
By ROBB M. STEWART
MELBOURNE -- The chairman of BHP Billiton, which is pumping billions of dollars into developing shale assets in the US, says the country should be encouraging oil and natural gas exports rather than worrying about weaning itself off foreign crude.
"I don't like the phrase energy security and energy independence. I think that would be really wrong for a country to go down that path," Jacques Nasser told a business luncheon in Melbourne Thursday. "The US should not be afraid to import certain forms of energy, but also should be promoting exports of certain forms of energy."
Mr. Nasser, BHP's chairman since 2010 and a former president and chief executive of Ford Motor Co. from 1998 to 2001, said all forms of energy should be traded globally.
The export of onshore oil and gas, which has surged in recent years as new extraction techniques have been developed, will bring geopolitical benefits around the world and also create a large number of highly skilled jobs, he said.
"As a country I used to be critical of the US because it never had an energy policy. Then they surprised the heck out of all of us, because by not having an energy policy they weren't able to regulate those really smart, innovative entrepreneurs who started the shale gas and oil revolution," Mr. Nasser said.
The US Energy Information Administration last year estimated the country's natural gas output will increase to 33.1 trillion cubic feet in 2040 from 23 trillion cubic feet in 2011, driven largely by shale production. It expects crude-oil production will increase to about 7.5 million bpd in 2019 from 5.7 million bpd in 2011.
Cheniere Energy, which is building a liquefied natural gas (LNG) export terminal in Sabine Pass, La., is the only company to hold permits to export gas out of the lower US where the bulk of shale production is taking place. Several other companies have applied for licenses to export, but are awaiting regulatory approval.
BHP in 2011 expanded a petroleum portfolio that already included operations in the US Gulf of Mexico, Australia and elsewhere by grabbing thousands of acres of shale assets in the US with the $12.1 billion takeover of Petrohawk Energy and $4.75 billion purchase of Chesapeake Energy's Fayetteville operation.
The company has said it expects output of 240 million bbl of oil equivalent in the year through June. The company also produces energy coal and uranium.
The surge in gas volumes coincided with a jump in shale developments to hit the price of the fuel and last year prompted a number of energy companies to write down the value of assets, although US gas prices have recovered. BHP booked a $2.8 billion impairment charge against its Fayetteville gas assets in the last fiscal year.
"We're bullish on energy demand in total," Mr. Nasser said, adding growth was expected to at least equal gross domestic product levels.
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