Posted August 14, 2017
A couple of new data points from the government show the importance of U.S. liquefied natural gas (LNG) exports to America’s trading posture and to its global energy security role, as a growing supplier of natural gas.
First, the U.S. Energy Information Administration (EIA) reports that the U.S. exported more natural gas than it imported in three of the first five months of this year – February, April and May – which is historic since the U.S. has been a net importer (on an average annual basis) for nearly 60 years. Below, monthly export/import levels and the trend line since January 2015:
In addition, EIA projects that the U.S. will be a net natural gas exporter for the year in 2017. Perhaps the biggest factor in this is the growth in LNG shipments from the Sabine Pass, La., terminal. EIA notes that Sabine Pass set a new monthly record of 1.96 billion cubic feet per day (Bcf/d) in May.
EIA expects that U.S. LNG exports will increase as liquefaction capacity grows, with five new projects now under construction coming online in the next three years, including Freeport and Corpus Christi in Texas; Cameron, La.; Elba Island, Ga.; and Cove Point, Md., later this year, increasing U.S. capacity from 1.4 Bcf/d at the end of 2016 to 9.5 Bcf/d by the end of 2019:
This would put the U.S. among the world’s leaders in LNG capacity, ranking third globally behind Australia and Qatar.
This is great for U.S. trade, American jobs and state and local economies – and for domestic natural gas production, as U.S. natural gas increasingly accesses global markets. It’s also important from a global energy standpoint – especially when you see articles like the one below on usnews.com, reminding of the way Russia has leveraged its natural gas customers in the past.
In an analysis, the American Foreign Policy Council’s Philip Decker writes:
In January 2009, Eastern Europeans were rudely reminded of a very blunt fact: If Russia wants to shut off the gas, it can. … Russian President Vladimir Putin has turned natural gas exports into a weapon, a leash designed to keep Russia's neighbors from straying too far westward. Today, we are again reminded of the Kremlin's grip on European energy by the planned expansion of the Nord Stream pipeline, which is scheduled to double its capacity by 2019. Polish and Baltic leaders are painfully aware of their dependence on Gazprom and are desperately looking for alternative suppliers.
Enter LNG supply from the U.S. In June, the first shipment of U.S. LNG arrived in Poland, and during a visit to Warsaw, President Trump promised more would follow. As Decker writes, U.S. LNG exports are in their infancy, yet a new stage is nearing with the added export capacity noted by EIA.
The overarching point is the golden opportunity for the United States to bring more natural gas to the global market – for the benefits of trade and to help friends and allies abroad. Here’s a chart we posted recently, showing the vastness of America’s natural gas resource base as detailed in a 2016 IHS study:
Again, the little white box in the upper left-hand corner is U.S. natural gas use in 2015, which is dwarfed by America’s natural gas reserves – showing the ability to supply consumers here at home as well as serving allies and trading partners.
That said, this opportunity hinges on continued growth in domestic natural gas production, meaning policies and regulatory approaches that support safe and responsible development. It also depends on the Federal Energy Regulatory Commission and the Energy Department approving, in a timely way, the much-needed LNG export projects that currently await government action.
As the world’s leading producer of natural gas and oil, the United States should fully build out its LNG export capacity. It’s the mark of a global energy superpower, and it’s in America’s best interests – home and abroad.
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.