The United States produces natural gas in abundance and is poised to become the world’s third-largest exporter by 2020, a production ramp-up supported by President Donald Trump. Thanks to advances in shale gas production, notably in the northeast, America has been the world’s largest natural gas producer since 2009 and extracted two billion cubic meters per day in 2017. The United States is now seeking fresh international export markets for the product. ‘This 2018-2019 time period was always flagged as being a crossroads in the global natural gas conversation,’ said Breanne Dougherty, head of natural gas research at Societe Generale.
The United States already exports some of this bounty through pipelines to Canada and Mexico. But to reach more distant markets, US industry is betting on liquefied natural gas, which can be exported by ship. LNG exports began to grow in 2016 when for the first time Cheniere Energy chartered a tanker from its gas terminal at Sabine Pass in Louisiana. Prior to that, US exports had come solely from an Alaskan terminal that closed in 2015. LNG exports quadrupled in a year and the United States became a net exporter in 2017 for the first time in 60 years.
More than half of this went three countries: Mexico, South Korea and China. About a third was bound for Europe. Shipments are due to soar even higher since Dominion Energy brought a new terminal online in Cove Point, Maryland in March, with four other projects due to be completed by the end of next year. – Trump and US ‘energy dominance’ – This should bring US exports to 272 million cubic meters a day. As a result, according to the US Energy Information Agency, the United States should become the world’s third-largest LNG exporter by 2020, behind Australia and Qatar.
American exporters can expect to find eager buyers. The International Energy Agency estimates demand should grow by 1.6 percent a year through 2040, compared to growth of 0.5 percent for oil and 0.2 percent for coal. Trump is encouraging this effort. After calling US ‘energy dominance’ last year, Trump has several times hailed the virtues of American natural gas, saying for example during a visit to Poland last summer that European countries had an interest in diversifying their sources of supply. Asia is also a particular target. The IEA said 80 percent of the growth in demand expected between now and 2040 should come from emerging markets, China and India chief among them.
European officials say they suspect Trump’s decision to withdraw from the 2015 Iranian nuclear deal, which could hold down Iranian gas production, and his recent critical remarks about the Nord Stream 2 pipeline intended to link Russia and Germany, could also serve as a means of expanding US export markets. Dougherty said it would be an exaggeration to assume such considerations were Trump’s main motive, but she noted that ‘There is no doubt that there are energy implications associated with these geopolitical decisions.’
Sources and photo-credits: AFP, Gulf Times