The “shale revolution,” as it’s been called, has led not only to the construction of new pipelines and LNG terminals, but also to a significant increase in this country’s energy exports. Less than a decade ago, U.S. gas production from conventional fields was in a downward spiral. And experts predicted that the country would become, of necessity, one of the largest importers of natural gas.
But that changed with the technological advances that have enabled the extraction of huge amounts of oil and gas trapped for eons in shale rock here in the States. With the new abundance of those resources—especially from fields in Pennsylvania, West Virginia and Ohio—it became clear that more pipelines would be needed to transport natural gas. In Mexico, for instance, demand has outpaced domestic production and turned that country into an important destination for natural gas from its neighbor to the north.
Export hubs for liquid natural gas
Additional LNG (Liquid Natural Gas) export hubs along the coast would also be needed to meet the demand from markets across the globe.
According to an article in the Fiscal Times, “Since Cheniere Energy shipped the first U.S. LNG commissioning cargo out of its Sabine Pass LNG terminal en route to Brazil in February of last year (2016), the terminal has exported an estimated 113 Bcf (billions of cubic feet) of LNG to 12 countries worldwide . . . More than half of those exports were bound to South America and the Caribbean, followed by India and China in Asia, the Middle East (UAE, Kuwait, and Jordan), Europe (Portugal and Spain), and Mexico.”
A total of five more LGN export terminals are currently under construction and expected to be operational by 2020—putting the U.S. on a path to become one of the world’s largest exporters of natural gas by 2018, according to projections from the EIA (Energy Information Administration). As of September, 2016, seventeen other terminals—most of them along the Gulf Coast—are in the proposal phase or awaiting various authorizations.
A faster, cheaper, better way to go
Those Gulf Coast terminals will certainly benefit from the expansion of the Panama Canal, which is now able to accommodate 90 percent of the world’s LNG tankers. That expansion has also enabled shippers to cut travel time and transportation costs. Today, for instance, a shipment through the Canal to Japan takes just 20 days, compared to 34 days via a route around the southern tip of Africa, or 31 by way of the Suez Canal. And with Japan, South Korea, China, and Taiwan accounting for nearly two-thirds of LNG imports worldwide, these quicker, less costly trips create an advantage for shippers.
In summary, the increase in U.S. production of natural gas has also created more outlets through which it can reach its destinations. Via new pipelines, the U.S. is selling more natural gas to Mexico than ever. And with the arrival on the scene of Gulf-Coast LGN terminals, the U.S.—though currently still an overall net importer of energy—is poised to become a natural gas net exporter in 2018.
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