A sub issue related to the U.S. LNG export battle is the question of regulation of hydraulic fracturing, which is a critical component of successful shale gas exploitation. If that technology is regulated or outlawed, the domestic E&P shale gas industry will be forced to reconsider its future, along with the potential American re-industrialization. At the present time two LNG export terminals have been approved with several others close to being approved.

There are 19 additional export terminals in the approval pipeline, which if all were approved and operated at capacity would account for nearly 40 percent of current U.S. natural gas production. There is little likelihood all these export terminals will be approved given the conflict between industrial America and the E&P industry. But which ones will, or should be approved? Unfortunately, the history of regulation of the U.S. natural gas industry has been marked by missteps, which have contributed to periods of supply shortages or huge gas surpluses. Counting on regulators to get it “right” is a dangerous strategy.

At the heart of the LNG question lays the issue of the output performance of shale resources. The financial shambles the U.S. E&P industry finds itself in today is a reflection of poor resource performance coupled with overly optimistic financial expectations. This poor performance is leading to a restructuring of the U.S. E&P business. A lack of resource performance could also doom the American LNG export initiative with its knock-on effects for the global LNG business. A restructured U.S. gas producing industry will alter control over gas volumes available for export further impacting the dynamics of the global gas business. Five to ten years from now, we may find that the global LNG business has barely changed. That may be welcomed news for conventional gas exporting countries who may be worried about their future.

Eoin Treacy's view It has been our view at Fullermoney since at least 2010 that unconventional natural gas represents a game changer for the energy sector. As with any major development the impact has been far reaching with competing interests lining up to take advantage. Suppliers who are presented with marginal economics at today's prices and consumers who are benefitting from a significantly improved cost structure would both benefit from a balanced regulatory structure. Just how likely that is in the current highly charged political environment remains doubtful. What seems clear is that some degree of exports will be allowed but not nearly as much as suppliers might have been hoping for.

Conoco Philips (P/E 11.36, DY 4.21%) broke out of a two-year range earlier this month and has been consolidating mostly above $62 since. A sustained move below $60 would be required to question medium-term scope for continued upside.

Exxon Mobil (P/E 11.47, DY 2.75%) has paused in the region of its historical peak near $95 and would need to sustain a move above that level to confirm a return to medium-term demand dominance.

Royal Dutch Shell (P/E 8.21, DY 4.87%) has been ranging mostly between 2000p and 2400p since 2011 and is currently trading in the region of the upper boundary. A sustained move above 2400p will be required to confirm a return to medium-term demand dominance.

British Gas (P/E 17.96, DY 1.53%) found support near 1000p from November. It is currently unwinding the short-term overbought condition developed since April. The benefit of the doubt can be given to additional higher to lateral ranging provided it holds the majority of the recent advance during this consolidation.

LNG and LPG tanker operator Exmar is listed in Belgium (P/E 12.08, DY 10.56%) and continues to form a first step above its three-year base. It is currently testing the upper boundary and a clear downward dynamic would be required to check potential for a successful upward break.

US listed Teekay LNG Partners is also an LNG tanker company (P/E 18.1, DY 6.09%) and broke out of a two-year range earlier this month. A sustained move below $40 would be required to question medium-term potential for additional upside.