The United States is on track to saturate the global energy market with liquefied natural gas (LNG) exports by as early as this year putting itself on course to become one of the world’s largest LNG suppliers.
According to US Energy Secretary Ernest Moniz, four LNG export terminals are currently under construction in the lower 48 states and shipments from these terminals may start late 2015 or early 2016. At present the US only exports LNG from a single terminal on Kenai Peninsula in Alaska, but it is looking to expand operations amid rising international demand.
Between 2010 and 2040 the market for LNG is predicted to triple, with most new demand coming from existing and emerging markets in Asia Pacific and the Middle East. Approximately 80% of new LNG supplies are expected to come from North America, Australia and East Africa. Furthermore, the US Energy Department has stated that in a decade the United States could be on par with top exporters such as Qatar, which processes over 100 billion cubic meters of LNG per year through its terminals.
At last week’s IHS CERAWeek ’15 Andy Brown, Upsteam International Director of Royal Dutch Shell, reiterated the importance of LNG resources amid increasing global energy demand. Brown pointed out that natural gas has proven to be an efficient and cost-effective alternative to traditional fossil fuels. Additionally, natural gas is the cleanest burning conventional fuel, with emissions up to 60 percent less than coal.
According to a February 2015 report by the President’s Council of Economic Advisors, rising LNG exports from the United States would increase the country’s GDP while creating more domestic jobs.
Also, European LNG importers are largely dependent on Russia for gas supplies. Because of the conflict with neighboring Ukraine, Russian gas transportation bypasses the Ukraine, often resulting in higher prices for importers. A rise in US LNG could dramatically reduce Russia’s dominance in the European gas market.