Published
August 22, 2017
We continue to produce a lot of natural gas from the shale boom. The Energy Department estimates that nearly 60 billion cubic feet a day will be produced in August.
So much natural gas is coming out of the ground that in three of the first five months of 2017, the United States has been a net exporter.
As a result, natural gas exports are going through the roof, Nikkei reports:
The U.S. exported 197.6 billion cu. feet of liquefied natural gas from January through April, exceeding the total for all of last year, as American influence in the international market grew.
April's exports alone quintupled on the year to 50.6 billion cu. feet, according to data released at the end of June by the Energy Information Administration. Latin America and the Caribbean account for 44% of exports, and Asia for 28%, said Executive Vice President Anatol Feygin of Cheniere Energy, the sole company constructing and operating LNG export terminals in the lower 48 states.
The U.S. now exports its LNG to 23 countries. Poland began imports in June, and Japan's Chubu Electric Power imported the first American LNG derived from shale gas in January.
Mexico has also become a big customer of American natural gas:
"Pipeline imports of U.S. natural gas make up nearly 60 percent of total Mexican natural gas supply, compared to just 22 percent in 2010," according to the report's executive summary reviewed ahead of publication by the Washington Examiner. And that trend isn't about to change any time soon. "Platts Analytics expects that U.S. natural gas imports will rise to nearly 70 percent of total supply by 2022."
To meet the demand for natural gas from the U.S., Mexican pipeline import capacity has risen by 145 percent in the last seven years, according to the report. Mexican officials in the U.S. recently pointed out that the increase in natural gas use is driven partly by environmental targets that demand it switch to cleaner-burning natural gas to meet its electricity demand.
Expect demand to continue rising as Mexico’s natural gas markets get more sophisticated.
This fact is an important wrinkle to NAFTA negotiations. Not only do supply chains tie North America together economically, but energy is also binding us closer. Canadian oil shale is imported to U.S. refineries (the Keystone XL pipeline would be a helpful addition), and U.S. natural gas is becoming a big component to Mexico’s growing energy appetite.
We need enough energy infrastructure to maintain momentum that supports jobs and economic growth from the natural gas boom. More pipelines need to be approved and built to move natural gas from where it’s produced to consumers either domestically or internationally. We also need to speed up approvals of liquefied natural gas (LNG) facilities so we can sell more energy to hungry markets.
Now that there are enough commissioners on the Federal Energy Regulatory Commission, it can work through their energy infrastructure backlog. A least $50 billion in projects await FERC review.
With enough energy infrastructure in place, American energy can get to market, supporting good-paying jobs and economic growth.
About the authors
Sean Hackbarth
Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.
