© 2018 by Robert Person.  The views expressed on this website are my own and do not represent the official policy of the U.S. Army, Department of Defense, or U.S. Government.

kirby.einck
Feb 11

Qatar and Exxon Mobil Plan $10 Billion Gas Investment in Texas

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Qatar and Exxon Mobile have recently decided to invest more than $10 billion into Golden Pass, a terminal in Texas designed to import gas from the domestic shale fields of Texas and New Mexico. With investments from Qatar and Exxon Mobile, the hope is that Golden Pass will become an export hub for the extracted gas. According to the Chief Executive of Exxon Mobile, Darren Woods, this investment “will provide an increased, reliable, long-term supply of liquefied natural gas to global gas markets, stimulate local growth and create thousands of jobs,” Qatar Petroleum is already the biggest liquefied natural gas exporter in the world, but with this investment, Qatar will be able to push deeper into the United States to allow for quicker access to Latin America freeing more of its domestic production for Asian markets. This investment will also allow Qatar to strengthen its relationship with the Trump administration, which has established close ties with Saudi Arabia. This proves to be important because it has been nearly two years since Saudi Arabia and its allies have placed a trade embargo on Qatar and with this investment, Qatar hopes that they can come into favor with President Trump. Qatar has also left OPEC to focus on its gas business as the dominance of Qatar in long-distance shipping of natural gas, is under threat from America and Australia. It has even been said that natural gas has the fastest growing demand worldwide and the number of countries importing this gas has more than doubled.

 

This article further explains why free trade is so valuable and why the general public should see trade as a way to achieve higher real income that would otherwise not be attainable. As it stands now, the general public strongly believes in instituting tariffs because it protects their main interests. What is concerning to the public about trade are the employment, income, conditions of workers in developing countries and the fear of losing or other’s losing from free trade. However, what they don’t understand is that free trade can result in more jobs as seen with the investment in Golden Pass. It is estimated that from this investment there will be 9,000 jobs in construction alone not to mention the 200 plus permanent jobs. Qatar wants to establish strong relationships with the United States because they want more free trade that they are no longer receiving from Saudi Arabia. Free trade would allow Qatar to benefit from their abundance of oil and would create a stronger comparative advantage in the rapidly expanding market. Not to mention free trade allows for further specialization and exchange, higher returns to scale from larger markets and the exchange of ideas and technology, all which Qatar is currently missing out on because of the embargo emplaced on them. The United States is their last-ditch effort to maintain their dominance in the long-term supply of natural gas. Finally, this article also spoke to the sector model of trade politics in the sense of losers and winners in this scenario. Although this article does not directly relate, it does in the sense this model predicts that the supposed winner in competition is the one who employs labor and capital in a country’s industry that relies on an abundant resource. Since oil is the abundant resource and considered to be export-oriented, Qatar’s investment in Golden Pass would only increase their likelihood of remaining a dominant force in this field.

Article Found at: https://www.nytimes.com/2019/02/05/business/energy-environment/qatar-exxon-mobil-gas-export.html?rref=collection%2Ftimestopic%2FInternational%20Trade%20and%20World%20Market&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=latest&contentPlacement=3&pgtype=collection

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