The People of America's Oil and Natural Gas Indusry

The Growing Momentum of U.S. LNG Exports

Mark Green

Mark Green
Posted March 27, 2018

The U.S. Energy Information Administration (EIA) has a couple of new reports on the growth of U.S. liquefied natural gas (LNG) exports, and they paint a promising picture.

EIA says that last year the United States exported more natural gas than it imported for the first time since 1957, making the U.S. a net LNG exporter. The chart below is a little wonky, but it shows natural gas imports (tan, top) and exports (bottom, brown). You can see that the dark line, representing imports and exports compared to each other, dipped below the zero line on the graph, indicating America's new status as a net natural gas exporter:

natgas_trade

EIA:

Natural gas production in the United States increased significantly over the past decade. The United States surpassed Russia in 2009 as the world’s largest natural gas producer as shale gas production drove overall increases in natural gas production. Most recently, production increases have been concentrated in the Appalachia region – primarily the Marcellus and Utica shales. Natural gas production reached an average of 73.6 billion cubic feet per day (Bcf/d) in 2017, a 1% increase from the 2016 level and just slightly lower than the 2015 record level.

This chart shows the growth of U.S. natural gas exports by type – LNG and pipelined natural gas to Canada and Mexico:

natgas_exports_growth

This leads into EIA’s second report, detailing how U.S. LNG exports quadrupled from 2016 to 2017, from 0.5 billion cubic feet per day (Bcf/d) to 1.94 Bcf/d. EIA credits this rise to the expanded ability to export LNG the past two years with the opening of the Sabine Pass facility in Louisiana and the Cove Point facility in Maryland.

lng_exports_quadruple

These have raised our LNG export capacity to 3.6 Bcf/d. Four additional export projects are scheduled to come online in the next two years, which would increase that capacity to 9.6 Bcf/d – putting the U.S. on a course that the International Energy Agency projects could make the U.S. the world’s leading LNG exporter by the mid-2020s.

Here’s why these developments are important:

Strength and Security in Abundance

Abundant domestic natural gas – production is up 45 percent since 2006, largely thanks to advanced hydraulic fracturing and horizontal drilling – has changed the U.S. natural gas narrative, from one of needing to import natural gas to becoming a net natural gas exporter. The result is our country is more secure in the world because it is less dependent on others. (Likewise, for crude oil. The U.S. is becoming more self-sufficient because of surging domestic production.)

Helping Allies

The United States’ growing ability to export LNG to friends and allies around the world is helping create a new global market for natural gas that benefits those who’ve seen energy used as a political tool in the past. U.S. natural gas provides choice for countries that once had limited supply choices.

Environmental Progress

Exporting natural gas to the world means others could realize the kind of environmental benefits we’ve had in this country. Carbon dioxide emissions across the entire U.S. economy are at nearly 25-year lows, mostly because of increased use of natural gas (our No. 1 fuel for electricity generation).

This has occurred even as the U.S. economy has grown, breaking the historic pattern of economic expansion being accompanied by emissions increases. U.S. LNG exports could create a similar environmental opportunity for natural gas importers around the world.

Moving forward, the federal government should continue its efforts to promote LNG exports for the continued benefit of workers and consumers here at home, for our national security, our allies and the environment.

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.