We’ve been preaching about this here for years, but it bears repeating: this is how the United States wins in terms of establishing our global position compared to both Russia and Arab oil states. For the first time in more than half a century, American natural gas production is exporting more energy than we import, and that adds up to leverage on the global stage. (Wall Street Journal)
The U.S. has become a net exporter of natural gas, further evidence of the how the domestic oil and gas boom is reshaping the global energy business.
The U.S. has exported an average of 7.4 billion cubic feet a day of gas in November, more than the 7 billion cubic feet a day it has imported, according to S&P Global Platts, an energy trade publisher and data provider. Exports also topped imports for a few days in September, Platts reported. It has been nearly 60 years since the U.S. last shipped out more natural gas than it brought in annually, according to the U.S. Energy Information Administration.
The milestone comes less than a year after restrictions on most crude oil exports were lifted, allowing tankers of crude to be freely shipped overseas for the first time nearly half a century, and together they mark a significant and potentially permanent change in the way U.S. energy flows around the world.
The partial lifting of export bans played a large role in this, though it took far, far longer than it should have to get it done. If the incoming president is good to his word we should see more movement in this direction. But it’s not just the raw export numbers which contributed to American leadership on this front. Production has been on the rise in Pennsylvania, Texas, Ohio and other shale rich areas. The American rig count continues to rise also, reaching nearly 600 last week. That’s still down a ways from the peak of 744 we saw last autumn, but it’s up significantly from earlier this year when we dipped down to the low 400s.
On top of that, the list of destinations for exports has been expanding in number. For one example, we just sent our second shipment of Liquefied Natural Gas (LNG) to China this month. (Bloomberg)
China is on the verge of receiving its second shipment of shale gas from the U.S.
The Methane Julia Louise has signaled it’s bound for Ningbo, a port city on China’s eastern coast, ship-tracking data compiled by Bloomberg show. Earlier this month, the liquefied natural gas tanker owned by Mitsui & Co. arrived at Cheniere Energy Inc.’s Sabine Pass terminal, according to the data.
The delivery would come on top of a cargo sent to Shenzhen in July from the export terminal in Louisiana, which shipped its first cargo in February. Chinese LNG imports are up by almost a fifth in the first three quarters from a year earlier, according to Timera Energy.
We spent decades allowing the fortunes of other nations to control our destiny on the energy front. The threat of reduced production was able to drive up prices in the United States and cause significant market disruption and unrest among consumers. At the same time, other nations like Russia were able to leverage their vast resources to twist the arms of governments in Europe, Africa and beyond. That’s all beginning to change now. If we can manage to maintain our focus and not bow to the politically correct forces tying to “keep it in the ground” for a while, this sector will be a major driver of not only jobs and prosperity at home, but of enhanced American influence abroad.