In a statement Tuesday, Warren accused ConocoPhillips, EQT Corp., Exxon Mobil Corp. and eight other natural gas producers of raising prices, reaping record profits and “gaming the system” by keeping production low and raising exports, instead of ensuring that there’s enough domestic supply.
“This corporate greed is inexcusable, and represents the results of a rigged system that enriches energy company executives and investors, and leaves American families struggling to pay the bills,” Warren said in letters addressed to ConocoPhillips’s Ryan Lance, Occidental Petroleum Corp’s Vicki Hollub, and other chief executive officers.
The global energy shortage gripping Europe and Asia is increasing demand for American liquefied natural gas and sending prices surging. Meanwhile, the shale industry’s restraint in spending on more gas production and limited pipeline capacity have stirred fears of power outages in some parts of the U.S.
The U.S. benchmark price of the power plant and heating fuel has nearly doubled this year. In Europe, prices have jumped to unprecedented levels.
More than a third of U.S. natural gas production comes from the Appalachian Basin of Pennsylvania, Ohio and West Virginia, where political roadblocks have prevented new pipelines from being built. More than a 10th comes from the Permian Basin of West Texas and New Mexico where natural gas is a byproduct of oil production and dependent on drilling activity.
Of the 97 billion cubic feet of gas produced in the continental U.S. on a daily basis, roughly 6 billion is exported via pipeline to Mexico, while another 11 billion is exported from six liquefied natural gas plants. Mexican exports are expected to remain steady, while LNG demand is expected to climb next year above 12 billion cubic feet per day.