Why Canada is better bet for gas exporters North America presents companies seeking to export natural gas to Asia with an intriguing conundrum: do they put their faith in the US or in Canada? The price of gas in the two countries is very similar, at about $3.30 per million British thermal units (mBTU) at Henry Hub in Louisiana, and about $3.40 in Alberta. The gap between those prices and the $16 or so per mBTU that Asian customers are paying for cargoes of liquefied natural gas is an enticing opportunity and many companies have been thinking about how best to exploit it. Their problem is that neither the US nor Canada offers ideal conditions for export and both present significant risks. Companies are starting to place bets based on how they expect those challenges to stack up. In the US, the difficulties are principally political. The country has never been a significant exporter of natural gas and it is having trouble adjusting to the idea that it might become one. The shale revolution has transformed its gas industry and encouraged expectations that prices will remain low for the forseeable future. But there is intense debate over how to make the best use of that windfall. For energy-intensive sectors, and petrochemicals in particular, shale promises to transform the global competitive outlook. With the economy still labouring through a slow and fitful recovery, the prospect of the new jobs and revenues these industries can generate is extremely exciting. Many manufacturers worry that allowing unrestricted LNG exports would erode that competitive advantage. Andrew Liveris of Dow Chemical, for example, has warned about the risk that higher Asian gas prices, linked to the price of oil, could "bleed back" into US gas prices. A study commissioned by the US Department of Energy from NERA Economic Consulting, published earlier this month, played down that risk, concluding that even unlimited LNG exports would raise US prices by at most a little over $1 per mBTU. Still, the government seems in no rush to give the green light to the 19 proposed new US LNG export projects. Only Cheniere Energy's Sabine Pass project in Louisiana has so far been awarded a licence to export gas to countries that do not have a free trade agreement with the US, and the energy department said it would begin to review applications for more "on a case-by-case basis." Mr Liveris has suggested that the government should give the green light to only "a few" projects at first, and he seems likely to get his way. Canada, by contrast, has a long history as a gas exporter to the US, and the idea that production should be retained in the country for the benefit of home-grown manufacturers holds much less sway there. Its problem is that compared to the US, which has well-developed pipeline connections to the coast and port facilities that can be converted to export LNG, it will need much greater investment in infrastructure. The most promising gas fields are the Montney and Duvernay shales of British Columbia and Alberta, which are several hundred miles from the coast. An LNG export project would need not only a greenfield gas liquefaction plant and tanker dock but new pipelines. Those projects will face political resistance but industry executives think it can be overcome. The pollution risk is lower for gas than for oil routes. One proposed Canadian LNG export plan, backed by Apache and EOG Resources of the US and EnCana of Canada, has already fallen by the wayside this year. Royal Dutch Shell is still pursuing its Canada LNG plan, however, in an alliance with Mitsubishi of Japan, CNPC of China and Kogas of Korea. Petronas of Malaysia, which has just been given Canadian government approval to buy Calgary-based Progress Energy Resources, is also looking at a possible project. PetroChina, CNPC's listed arm, just agreed to pay $2.2bn for a stake in EnCana assets in the Duvernay shale, which looked like a move to secure resources for future exports. In the US, companies including Dominion, Sempra Energy and ConocoPhillips are among the applicants for new gas export licences. ExxonMobil is riding both horses: applying for a US export licence as part of the Golden Pass consortium but also looking at a Canadian export project following its $3.2bn acquisition of Calgary-based Celtic Exploration. On the basis that politics is more intractable than geography, the companies that are backing Canada may turn out to have made the smartest bet. Ed Crooks is the FT's US Energy Editor