U.S. produced liquefied natural gas (LNG) is revolutionising markets with the global natural gas market increasingly referencing U.S.-sourced natural gas. In the context of the American energy scene, gas would continue to not only grow faster than all other energy sources but will also dominate the markets.
Natural gas is undercutting nuclear and coal at prices less than $3/MMBtu. And, renewable would mostly be able to compete based on huge subsidies and state mandates. And, some professionals have voiced their fears about the industry being able to maintain these prices.
It is reported that the United States used around 30 trillion cubic feet of natural gas last year, and the demand for gas is expected to increase, as it has brought down the country’s carbon emissions to a 27-year low. America would double gas production by 2025 to meet demand. So, it would be logical to find the industry’s saviour connecting to the global market. However, connecting would require more pipelines and a lot of LNG terminals and tankers. In this context, LNG terminal planning and construction in the United States has skyrocketed since the beginning of 2010. And, today there are 20 LNG and regasification terminals operating (or under construction in North America).
The expansion is grounds for the EIA projecting that U.S. LNG capacity would rise from around 14 billion cubic metres (bcm) per year to around 110 bcm by 2020. The goal would be to reach 200 bcm by 2030. Many experts believe that the U.S. would become a serious gas exporter and also be poised as the world’s third-largest LNG exporter within two years behind Australia and Qatar.
In the context of the growing demand in the US for natural gas, the pipeline infrastructure is still not in place for the potential supply. Also, thousands of gas wells have been drilled in Pennsylvania and not yet been completed due to the dearth of pipelines. So, any rise in gas prices could have a domino effect on the economy. And, staying connected to the global LNG market would help the industry immensely.
In this context, Cheniere Energy based the price of LNG on low-cost U.S. natural gas and added only a fixed fee for liquefaction and transport to make real profits also offering potential customers unprecedented flexibility. Cheniere shipped its first cargo last year from its Sabine Pass liquefaction facility, and within a year, it delivered around four million metric tons of gas to 14 different countries. Thus, opening new avenues for America to set the future for its gas supplies and also bringing in changes to the LNG world.