U.S. Energy Industry Looks for Clarity in China Trade Deal
On paper, China and the United States should fit nicely as energy trading partners. China is a fast-growing energy market, while the United States is a fast-growing energy exporter. China is trying to clean up the air of its polluted cities by burning less coal, and the United States is producing an enormous surplus of cleaner-burning natural gas. So any sign of an improvement in trade relations was viewed positively by executives.
Jack Fusco, chief executive of Cheniere Energy, the liquefied natural gas exporter with perhaps the most to gain from the deal, characterized it as “a step in the right direction that will hopefully restore the burgeoning U.S. L.N.G. trade with China.”
He was among several energy executives in the audience at the signing ceremony on Wednesday in Washington, and he was mentioned by name in President Trump’s remarks.
Mike Sommers, president of the American Petroleum Institute, the main oil industry lobby in Washington, stressed that both United States tariffs on imports of industrial components vital to the oil and gas industry and Chinese retaliatory tariffs on American energy exports should be removed.
“De-escalation of trade tensions is welcome news,” he said. “We encourage the administration to stay at the negotiating table until the U.S.-China marketplace for energy trade is fully restored and all remaining tariffs are lifted.”
Before the trade war, China was the second-largest market for American oil exports, after Canada. As the Chinese market shrunk, American companies were able to divert oil cargoes to other countries, and petroleum exports continued to expand.
China represents an even bigger opportunity for the natural gas export industry. The United States began large-scale exports of liquefied natural gas in 2018, and export terminals are rising along the Gulf of Mexico. Dozens of new terminals may be built if a long-term Chinese market can be assured.
Article source: https://www.nytimes.com/2020/01/15/business/energy-environment/china-trade-deal-energy.html?emc=rss&partner=rss