Shale gas revolution has been driving US energy market by
increasing economic and industrial competitiveness. Today, shale
gas has gained acceptance as "bonanza" which triggered
slump in gas prices and sparked off widening the energy gap between
US and Europe. US gas export is forecasted to be mounted up 6
billion cubic feet per day signifying UK's daily demand in
winter as of 2020. At this stage, a potential oil and gas trade
between US and EU will become an inevitable pace for world energy
Transatlantic Trade and Investment Partnership (TTIP) will
enable to access to US oil and gas markets which will likely to
decrease dependency on Russian gas in EU zone. Hence, TTIP may
become an epoch-making agreement in terms of US energy export
policy and EU gas import dependency . Hence, EU proposes a binding
agreement covering crude oil and gas trade licensing procedures
which will be ensured by modifying US longstanding energy
legislation and provide automatic license approval for energy
export to EU.
US Oil & Gas Export Regulatory Framework
Companies shall obtain two types of federal licences: Department
of Energy ("DOE") must grant an export permit and also a
facilities permission shall be obtained from Federal Energy
Regulation Commission ("FERC"). In case of gas exports to
countries which has signed a free trade agreement ("FTA")
accordance with public interest is adequate to attain licenses.
Notwithstanding that as to whether export gas to non-FTA countries
will be determined by DOE which shall be parallel public interest.
As of 2013, 26 projects have received permission for LNG gas
exports to FTA countries whereas merely 4 projects have obtained
approval for non-FTA countries. As the world's leader energy
producer, US must ease its restrictions on energy trading by reason
of having a corner on the global energy trading.
US crude oil exports ban has remained in force since of the
mid-1970s in line with the Arab oil embargo. At the president time,
US became dominant country in oil market with 50% boost in domestic
production. Effacement of trade restrictions on crude oil in US
legislation will actualize a genuinely unified front provided that
TTIP comes into force.
Expert Opinion: Effects of TTIP to EU and US Markets
Great Exposure on EU Energy Intensive Manufacturing
Although, TTIP may reduce EU dependency to Russian energy,
abolishment of all oil and gas trade barriers between US and EU
will cause downstream on investments to Europe since companies will
intend to benefit from cheaper manufacturing opportunities in US.
Particularly, heavy industry in Europe will encounter with market
shrinkage. Also, competitiveness of Europe energy markets because
of the difference in energy prices will no longer remain which may
be result of TTIP agreement.
Oil and Gas Prices Future In US
Energy export limitations in US market is a key component of low
energy prices. On condition that licensing procedures are
streamlined, oil and gas prices are expected to increase in US
market. TTIP agreement will originate an equilibrium price
mechanism in US and EU energy markets that is forecasted to be
formed above US current oil and gas prices and under EU market
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