U.S. is net exporter of natural gas, thanks to innovation

23 Sep 2017, 12:00 am
Michael Buchanan
U.S. is net exporter of natural gas, thanks to innovation

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Worldwide, Qatar is the top exporter of LNG, shipping almost 30 percent of the world’s supply. Australia, Malaysia, Nigeria and Indonesia are other top LNG exporters.

Natural gas tanks (Shutterstock)

For the first time in six decades, the U.S. will export more natural gas than it imports. That balance is due largely to U.S.-pioneered technologies that have revolutionized the energy sector.

“America will be a faithful and dependable partner in the export and sale of our high-quality and low-cost energy resources and technologies,” President Trump said earlier this year.

Innovation on two fronts helped make the U.S. an exporter in natural gas, a fuel that is commonly used for home heating, electricity generation and industrial production.

`American shale revolution’

First, techniques the U.S. Department of Energy helped develop became more widely used in the private sector over the past 10 years. These technologies allowed companies to tap into previously unrecoverable gas and extract natural gas from shale rock formations. These unconventional methods are called horizontal drilling and hydraulic fracturing, commonly called fracking.

These techniques helped launch what’s known as the “American shale revolution,” enabling U.S. companies to increase shale gas production more than 11 times from 2007 to 2015, according to the most recent analysis available.

U.S. Shale Gas Production 

Now that America is producing more of the energy that it uses, the country relies less on imports, increasing energy security. An estimated 95 percent of American natural gas produced in the U.S. is used in the United States, leaving about 5 percent for export.

A new way to transport natural gas

Another big change focuses on the way energy companies deliver natural gas to customers.

In the past, producers transported natural gas only through physical pipelines. But now, natural gas can be shipped anywhere in the world if it is converted into liquid form. Liquefied natural gas, commonly known as LNG, can be chilled and safely transported via specialized tanker ships and delivered anywhere with LNG facilities. That’s a big deal for countries’ energy security.

Lithuania, for example, relied on pipelines from one source to deliver natural gas until 2014. This source, Russian energy giant Gazprom, was able to charge high prices with the market to itself. But when Lithuania developed the capability to import LNG, it could buy natural gas from anywhere in the world.

Prices for natural gas dropped 20 percent from 2014 until 2015 in Lithuania. Better prices helped consumers, and diverse sources of energy supply boosted the Baltic nation’s security.

“Growing LNG supply from the U.S. means more competition, liquidity and supply diversity that will make global gas markets more flexible, efficient and secure,” said Jason Bordoff, an energy expert at Columbia University. “Gas will trade more like oil, meaning market forces will determine price and where supply flows.”

Worldwide, Qatar is the top exporter of LNG, shipping almost 30 percent of the world’s supply. Australia, Malaysia, Nigeria and Indonesia are other top LNG exporters. In 2016, the United States exported 1.1 percent of the world’s LNG supply. That share is expected to grow somewhat as more U.S. companies build infrastructure needed to export LNG.


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