Exporting Natural Gas Positive For Our State and Country
It is no secret that an oil and gas shale revolution is taking place around the world. Right here in the United States, over a dozen shale plays are being explored. Companies are drilling for oil and natural gas from South Texas to North Dakota. We have gone from a declining 60-year supply to a 100-year and growing supply. However, it was just six short years ago, there were 45 LNG import projects in North America.
Today, the story has changed. The shale revolution has brought about a natural gas supply that is large enough to fulfill the U.S. demand, and yet still ship natural gas around the world to the open market. Over a dozen companies have applications that have been submitted to the federal government for liquefied natural gas (LNG) export facilities. Cheniere Energy, based out of Houston Texas, is the only LNG facility that has been approved by the appropriate federal agencies. Cheniere has a facility that is being converted into an LNG export plant in Cameron Parish, Louisiana, to the tune of $11 billion dollars. Four short years ago, this same facility was constructed to import natural gas into the United States. Not only is the export plant good for the Louisiana economy, but it is also a win for our country.
The United States has recently surpassed Russia as the number one producer of natural gas in the world. However, at the current moment, Russia is the number one exporter of natural gas in the world, followed by Qatar, Norway and Canada. Out of the top ten countries exporting natural gas, the United States does not make the cut. In fact, the United States is not currently exporting any natural gas. With the abundance of natural gas in the U.S. market thanks to the shale revolution, it only makes financial and national security sense to become a chief player in the natural gas export business.
Along with a boost to our state economy, helping our country from a financial and national security standpoint, the exportation of LNG will also keep the Haynesville Shale in North Louisiana active. Operators in the Haynesville Shale have seen a recent decline in their rig counts due to the supply and demand curve being off-balanced. This new demand will allow operators to continue producing dry natural gas, which can then be sent through the state’s pipeline infrastructure directly to the Cheniere Energy export facility.
Analysts are tossing around the question of how many LNG export facilities will actually be approved. While we cannot predict what the federal government will do, it is a safe bet that at an $11 billion dollar price tag, the total number of export facility will not reach 45 anytime soon. Cheniere Energy’s CEO, Charif Souki, recently predicted to the New York times that while the United States would probably only export a trickle of gas over the next five years, it could be exporting four billion cubic feet a day by 2022, and as much as 15 billion cubic feet a day by 2027.
Posted on Sun, March 3, 2013