Washington: Energy-hungry India, which invested nearly USD 4 billion in US' tight oil and shale gas sectors from 2008 to 2012, has strongly advocated the export of American natural gas to it, saying it presented a "win-win" co-operation opportunity for both nations.
"As shale gas has become economically viable to produce, the US has emerged as one of the world's most important gas producing countries," Indian Ambassador to the US Nirupama Rao said, while speaking at the American Enterprise Institute (AEI), a Washington-based think-tank.
"Growth in shale gas production in the coming years is now expected to substantially reduce, if not eliminate, the need for the US to import natural gas, and companies are instead looking to reach new markets beyond electric power, industrial and residential uses, both in the US and overseas," she said.
Rao strongly advocated the case for export of US natural gas to India.
"The potential of exports of natural gas from the US, on account of its linkage to the Henry Hub (HH) prices, would imply considerable savings in terms of landed costs in a country like India. We estimate that these savings would be in the range of USD 4-5 per million metric British Thermal Units (mmbtu)," Rao said.
She pointed out that according to the Energy Information Administration (EIA) of the US Department of Energy, in a few years time, around 2020, the total production of natural gas in the US will exceed domestic consumption.
"This scenario opens up the possibility of the export of liquefied natural gas (LNG) cargoes from the US to other energy scarce countries, including India, where there is significant untapped potential for natural gas demand in all end use segments," she said.
"This would result in cheaper electricity, lower subsidies on urea and other nitrogenous fertilizers, and a more economical fuel for a variety of industrial and consumptive gas usages. Thus, there is a clear and present benefit to India, if exports of US natural gas are permitted to India," the Indian ambassador to the US said.
"The point that I would like to stress is that the advantage is mutual and that natural gas exports represent a 'win-win' co-operation opportunity," Rao said.
According to another EIA study, roughly 20 percent of the USD 133.7 billion invested in US tight oil and shale gas from 2008 to 2012 has come from abroad, with Indian companies accounting for a total investment of nearly USD 4 billion so far.
These investments represent more growth, jobs and progress for the US economy and should, in my view, be welcomed, Rao said.
Meanwhile, influential Congressman Joe Barton voiced support for export of natural gas to American allies, saying it would enhance US' power and influence.
First Published: Wednesday, May 8, 2013, 16:03