As most advocates for clean energy already know, the U.S. is in the middle of a natural gas boom. We have seen it transform states across the country, such as Bakken Shale formation in North Dakota, the Marcellus and Utica Shales in Ohio, the Eagle Ford Shale in Texas, and a host of others.
Fortunately, 2018 was a record-breaking year for the American liquefied natural gas (LNG) industry, and just yesterday, the final investment decision was signed for the Golden Pass LNG Export Terminal, which is expected to generate $35 billion of economic benefits and create more than 45,000 U.S. jobs. Now, as domestic LNG reserves continue to grow, the U.S. is on track to move up to the third spot as the largest natural gas exporter in the world behind only Qatar and Australia.
“The dramatic expansion of U.S. LNG exports since 2016 continues to deliver tremendous benefits across America and around the world. With LNG export capacity set to nearly double in 2019, the United States is poised to become a leading global supplier,” said Todd Snitchler, Vice President of Market Development at the American Petroleum Institute.
This valuable resource is growing the economy, creating jobs, and paving the way for American energy independence. Indeed, natural gas is more important to our all-of-the-above energy portfolio than ever before.
It is part of the reason that the U.S. economy has proven it can continue to expand at a faster rate than energy consumption. Moreover, carbon emissions in our country have actually decreased by about 11 percent from 2007 to 2013, and that decline has been widely attributed to a shift from the use of coal to cleaner-burning natural gas in U.S. electricity production.
Fortunately, our nation now enjoys robust natural gas production due to large shale reserves that we’ve been able to produce thanks to decades of investment in innovative technologies and their widespread deployment. As a result, price of American liquefied natural gas has dropped through the floor. In fact, production has been so strong that natural gas prices in Texas actually fell below zero in November of last year! The low price of LNG also incentivized China to make a purchase in December 2018, despite the high tariffs in place. The prospect of a long-term trade agreement with China could be very helpful for continued growth in demand.
Natural gas production has increased to the point where the shipping section of the supply chain is having a hard time keeping up. The construction of new natural gas facilities are underway in order to meet the increased demand. With the new facilities online, the U.S. capacity for exporting natural gas is expected to reach 8.9 Bcf/d by the end of the year. We also supported H.R.4606 last year, which expedites approvals for small-scale exports and imports of LNG.
While LNG is not a zero-carbon source of energy, it is a cleaner burning of fossil fuel and has been instrumental to decreasing greenhouse gas emissions in the U.S., and—and can be in other countries too.
Its wide utility makes it an important global energy source. In its vaporized form, LNG can be used as a fuel, and it can also produce electricity for domestic heating and cooking, cars, buses, trucks, and marine fuel for ships. And it can do these things with a fraction of the carbon emissions that come from other traditional fuel sources.
All clean energy sectors recognize that cleaner-burning natural gas is the key “bridge fuel” that will help America transition to new forms of energy in the coming decades. That is why it is essential that we optimize our natural gas development—and it certainly looks like the country’s gas producers are doing a great job so far.