The Growing Good-News Story on U.S. Natural Gas
Posted March 5, 2019
The International Energy Agency’s Fatih Birol regularly heralds the positive impacts of the American shale energy revolution (see here, here and here). All good, but U.S. shale’s global impact is just now starting to be felt, IEA’s executive director said last week.
During a global markets update at the U.S. Energy Department with Secretary Rick Perry, Birol said the United States will be responsible for about two-thirds of the growth in the global liquefied natural gas (LNG) export market. Of course, this reflects the abundance of domestic natural gas, largely produced from shale formations. Big-time global impact lies ahead, Birol said:
“My belief is that the world has not seen yet the full impact of [the] shale revolution. The first phase finished by mainly using shale oil and gas for the United States domestically. Now, the export phase comes and this will have major, long-lasting implications for global oil and gas markets. … This is going to change the entire dynamics of gas markets, gas security, gas pricing, among others. There are huge expectations around the world for U.S. LNG.”
Add to that environmental and climate progress, which we’ll get to in a bit.
Certainly, there’s every reason to believe U.S. natural gas and oil can meet or exceed global expectations. Soaring U.S. crude oil production has increased global supply, supporting the stability of global markets – while reducing weekly U.S. crude imports to their lowest level in 23 years (as of Feb. 22), according to the U.S. Energy Information Administration.
Natural gas is as big a story as Birol suggests. Marketed natural gas production was a record 32.7 billion cubic feet in 2018, the result of modern hydraulic fracturing and advanced horizontal drilling that has driven the energy revolution. In turn, increased production has helped support U.S. LNG exports, which have skyrocketed, reaching nearly 1.1 billion cubic feet last year. Expanded market opportunities for U.S. natural gas abroad helps stimulate domestic output.
U.S. LNG is poised for significant growth. With the Federal Energy Regulatory Commission’s recent approval of the Calcasieu Pass LNG export project in Louisiana, there’s hope the commission will move swiftly on other export projects awaiting approval – all of which could strengthen America’s exporting hand.
In addition to trade, production and economic benefits, there’s a big climate opportunity for the world through U.S. LNG. Increased use of natural gas is the main reason the United States’ energy-related carbon dioxide emissions are at their lowest level in a generation. Now, imagine the emissions reduction benefit with more and more U.S. natural gas supplying markets around the world.
Finally, there’s also the partnership between natural gas and renewable energy sources like wind and solar, a partnership that is key to renewables’ growth. The Pacific Research Institute’s Wayne Winegarden for the Washington Post:
[N]atural gas should be viewed as a powerful tool to reduce emissions – while improving air quality. Natural gas can help increase the use of renewable energy like wind and solar because it offers a low-cost backup capacity that’s critical for the power grid. …
Natural gas offers a solution to the reliability problem. Gas-fired plants are necessary to provide “baseload” power for a continuous, uninterrupted flow of electricity, as well as the “peak” load needed to meet unexpected demand surges. The ability to quickly ramp up or scale down output from these natural gas-fired peaking plants makes them a required complement to renewables in times of fluctuating demand.
For all of these reasons, U.S. natural gas is a big story – with the potential to get even bigger.
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.
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