U.S. Energy’s Growing Strength In Global Markets

on December 06, 2016 at 10:00 AM

Domestic Oil And Gas Production

Energy trade publisher and data provider S&P Global Platts reports that this month the United States is a net exporter of natural gas, exporting an average of 7.4 billion cubic feet a day (bcf/d) – topping the 7 bcf/d the U.S. imported.

Given the fact it has been nearly 60 years since the U.S. exported more natural gas than it imported annually, that’s a pretty big milestone. Even if it’s just for November, the data indicates where things appear to be headed. The U.S. Energy Information Administration projected the U.S. would become a net exporter annually in 2018, but quite clearly it’s already starting.


Perhaps more importantly, the November natural gas export/import numbers suggest new U.S. muscularity in the global energy marketplace, built by America’s domestic energy renaissance. Record natural gas output, largely developed with advanced hydraulic fracturing and horizontal drilling, is creating export opportunities for U.S. liquefied natural gas (LNG) and increasing U.S. energy influence globally. The Wall Street Journal reports:

… the exports show how American shale energy producers continue to expand their influence in ways few predicted a decade ago. “Gas is just one of the first signs of the growing strength of U.S. production power,” said Anthony Yuen, global energy strategist at Citigroup.

More from the Journal:

Overseas producers now have to deal with the growing clout of the U.S. energy industry, which is aggressively looking to ramp up its global market share to help offset a long period of low prices. “It’s indicative of things to come,” said Sid Perkins, managing partner at the brokerage Ion Energy Group. Natural gas is “going to be taking on the characteristics of a global-macro market, like crude, where global factors will influence what happens to gas.”

LNG exports are increasing. Shipments from Cheniere Energy’s Sabine Pass terminal on the Louisiana/Texas border now average 1.5 bcf/d, the Journal reports. Other export projects have been approved by the government and could begin shipping out LNG next year and in 2018. The newly expanded Panama Canal is a boon for U.S. LNG export terminals along the Gulf Coast eying potential buyers in Asia, including Japan.

We know that European allies are eager for U.S. gas – as the ambassadors of seven central and eastern European countries recently made clear. This summer a NATO communique connected stable, reliable, diverse energy supplies with the ability of the alliance’s European members to “increase our resilience against political and economic pressure.” Click here for detailed analysison Europe’s tense energy relationship with Russia.

The larger point is one we’ve made before: The global LNG market is developing, and the United States is well-positioned – thanks to abundant domestic natural gas – to be a major player in it. We need policies that strengthen America’s competitiveness in the evolving marketplace – chiefly, to clear away any unnecessary delays in bringing U.S. export projects online. Currently, 30 applications for approval to export are pending with the U.S. Energy Department, almost half of them submitted in 2014 or earlier.

Members of Congress are discussing energy legislation that could be completed during the current session. Provisions to expedite LNG export project approvals should be included in the finished legislation.

By Mark Green

Originally posted November 30, 2016

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