US needs to expand global trade in natural gas

Apr 28, 2004 02:00 AM

The United States needs to expand the global trade in natural gas as a way to prevent future sharp price increases from harming its economy, Federal Reserve Chairman Alan Greenspan said. Greenspan said a dramatic rise in recent years in the price of both oil and gas for delivery six years into the future was almost certain to have an impact on the US economy. But he said the impact was likely to be greater for users of natural gas because they had no global supply to cushion price increases.
"If North American gas markets are to function with the flexibility exhibited by oil, more extensive access to the vast world reserves of gas is required," Greenspan said in remarks to an energy conference sponsored by the Centre for Strategic and International Studies.

Saudi Arabian Oil Minister Ali Naimi, speaking at the same conference, said his country and other members of OPEC still supported maintaining a $ 22 to $ 28 per barrel target band for oil prices despite Venezuela's recommendation to raisethe target by $ 2 per barrel at OPEC's September meeting.
"I don't believe there is a fissure" on the issue inside OPEC, Naimi said. "There is a dialogue, and some member countries expressed their desires."

Greenspan said imports of LNG accounted for only 2 % of the US market last year in part because environmental and safety concerns have limited the number of US ports with facilities to handle LNG, or LNG, shipments. But he said that situation could be changing.
"Given notable cost reductions for both liquefaction and transportation of LNG, significant global trade is developing," he said. "And high natural-gas prices projected by distant futures prices have made imported gas a more attractive option for us."

Source: Associated Press
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