Which country was the largest contributor to growth in the global natural gas supply last year, by a factor of two?
If you said the United States of America, you’d be right.
The shale gas revolution has transformed the U.S. energy sector and has roiled energy politics to the point that natural gas was a keynote subject of the first presidential candidates’ debate.
U.S. natural gas output is expected to continue to soar, even as localized low prices have weighed on production growth in recent months. Plans to use gas in transport and to use it in chemical plants have been accelerated and expanded beyond the wildest expectations of those industries.
But there’s another use for all that natural gas that could go some way in solving many of the other political and economic problems that have bedeviled the economy in recent decades.
The United States is set to become a major exporter of the fuel, earning back dollars it has traditionally sent to Venezuela and Persian Gulf states.
Improved trade balances could come to as much as $45 billion each year, according to recent numbers in Barron’s.
There is an air of inevitability about the expansion of shale gas as liquefied natural gas among energy industry participants. With the economics so compelling and few alternative sources able to produce as cheaply or at the same scale yet, the United States is the obvious leader.
The gap in domestic energy prices relative to prices elsewhere around the world — particularly in Europe — is unlikely to close despite rapid increases in exports, forecasters say, and despite the pressure from competing natural gas producers such as Qatar, Canada and potentially China.
But only one LNG export terminal has been approved in the United States — Cheniere Energy’s Sabine Pass facility in Louisiana. Several others currently sit at various stages in the permitting and financing stage, and their prospects remain uncertain, mostly because of fears that federal permission to move ahead will boost U.S. prices.
The risks are complex, and there is no way to guarantee what will happen next in the energy sector. We’re talking about restructuring a very complex global marketplace, and it’s not going to be easy or straightforward, but U.S. natural gas is going to play a central role.
The Department of Energy’s own analytical body has projected that an increase in LNG exports would not significantly increase prices. The projected boost for U.S. consumers is a mere 1.7 percent over a reference case without LNG exports, a recent study from Deloitte said.
Continued opposition to LNG export terminals would leave the administration standing on the wrong side of history.
The economics are compelling. The resource is present and likely to flow to the highest bidder.
With the broader benefits for the U.S. economy apparent, moves that do anything beyond getting the best deal for the U.S. taxpayer are simply obstructionist.
Rep. Eric Swalwell, D-Calif., walks on Broadway after a Future Forum with young entrepreneurs in the Flatiron District of New York City, April 16, 2015. Reps. Steve Israel, D-N.Y., Seth Moulton, D-Mass., and Grace Meng, D-N.Y., also attended.