While Exxon CEO Rex Tillerson filed missiles yesterday at the Obama Administration for supposedly inhibiting the production of natural gas (see page 3 of today's Section C of the Wall Street Journal), the Henry Hub price closed yesterday at $2.18. Some of the smartest people in the energy business with whom I was this week at an International Energy Agency workshop in Warsaw, Poland are predicting a $1.50 price this spring.
Here are obsrvations I would make about claims that the Obama Administration is inhibiting gas production.
First, the Obama Administration is doing a lousy job of slowing down gas production if that were its goal, given 2011 was an all-time record production year.
Second, the Obama Administration is responding, as it must, to massive public concern about fracking. Yes, a lot of that concern is based on misinformation or outright propaganda but there are also real issues. And the level of public concern is real and large. Just ask Governor Christie, Mitt Romney's national co-chair, who implemented a one-year ban on fracking in New Jersey, what the public mood about "fracking" is in the Northeast.
Third, what is the biggest problem facing the gas industry today? Too little demand? Or too little production? $1.50 gas as a real possibility this spring answers those questions.
Fourth, the Obama Administration has done more to promote natural gas demand than any Administration in US history. Take a look at the EPA Air Toxic Rule as just one example. There are many more. And the Obama Administration has taken immense heat for these rules and other initiatives that promote natural gas demand.