• 4 minutes Why Trump Is Right to Re-Open the Economy
  • 7 minutes Did Trump start the oil price war?
  • 11 minutes Covid-19 logarithmic growth
  • 15 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 18 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 2 hours Russia's Rosneft Oil Company announces termination of its activity in Venezuela
  • 4 hours America’s Corona Tsar, Andrew Fauci, Concedes Covid-19 May Be Just a Bad Flu With a Fatality Rate of 0.1%
  • 9 hours Saudi Arabia Can't Endure $30 Oil For Long
  • 2 hours TRUMP pushing Hydroxychloroquine + Zpak therapy forward despite FDA conservative approach. As he reasons, "What have we got to lose ?"
  • 6 hours KSA taking Missiles from ?
  • 8 hours Where's the storage?
  • 8 hours Western Canadian Select selling for $6.48 bbl. Enbridge charges between $7 to $9 bbl to ship to the GOM refineries.
  • 8 hours Hillary Clinton tweeted a sick Covid joke just to attack Trump
  • 10 hours China extracts record amount of natural gas from Gas Hydrates in South China Sea
  • 12 hours Wait till America opens their Q1 401k Investment Statements and see they have lost 35% of their retirement savings. They can blame the Authoritarian Chinese Communist Party..
  • 13 hours There are 4 major mfg of hydroxychloroquine in the world. China, Germany, India and Israel. Germany and India are hoarding production and blocked exports to the United States. China not shipping any , don't know their policy.
  • 15 hours Oxford Epidemiologist: Here’s Why That Covid-19 Doomsday Model Is Likely Way Off
Alt Text

Oil Tumbles Towards $20 As Glut Grows

The brief rebound in oil…

Alt Text

Saudi Arabia Is Ignoring U.S. Pressure

Saudi Arabia is unlikely to…

Alt Text

The Worst Is Still To Come For Oil Markets

There isn’t any incentive to…

Gary Hunt

Gary Hunt

Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a…

More Info

Premium Content

How the Export of Coal and Natural Gas in the U.S. has Developed over time

The beaten and bruised US coal industry got up off the floor from the body blows of US EPA’s regulations and got back in the race as an export champion serving energy hungry Asian markets. Fourth quarter 2011 US coal exports increased 6.6 percent from the Q3: 2011 and 32.6 percent from Q4: 2010 to 27.7 metric short tonnes (mst) with exports going mostly to Europe and Asia continuing to climb.

Meanwhile, total U.S. coal consumption decreased by of 18.8 percent from third quarter 2011 and 9.4 percent from fourth quarter 2010 to 227.1 mst.  This was the lowest since second quarter 1995 according to the US EIA Coal Quarterly Report. The decrease in coal consumption for power generation to 208.6 mst was due to mild weather and resulting high stockpile levels combined with strong competition from lower priced natural gas in the fourth quarter of 2011.  US coal imports also fell to their lowest level since Q2: 2000.  The US imported 2.7 mst of coal in Q4: 2011, but that was 24.7 percent lower than Q3: 2011 and 43.9 percent lower than Q4: 2010.

Natural Gas Export Terminal Approved

America now has so much natural gas that prices have fallen to near record lows and producers line up to export LNG.  The Federal Energy Regulatory Commission approved a certificate of public convenience and necessity to build a liquefied natural gas (LNG) terminal on the Texas-Louisiana Gulf coast to export excess US natural gas from all the shale gas development growth. Cheniere Energy won FERC approval to retrofit its Sabine Pass natural gas terminal designed to accept LNG imports so that it can export LNG.   FERC said there were seven more pending requests for export terminal certificates.  The reason is that cheap American natural gas exports can be turned into higher priced LNG sold at premium prices in the same Asian markets buying US coal exports and Canadian oil sands crude exports.

So what does all this mean?

Natural gas is the fuel of choice with low prices and abundant domestic supply reliability. The growth of natural gas from shale E&P is widespread across the US made possible by horizontal drilling and hydraulic fracturing.  This shale development is largely taking place on private lands under state by state regulation.  While EPA seeks to find a reason to regulate fracking so far it recognizes it risks the wrath of Congress and states benefiting from the job creating, revenue producing, confidence building growth of natural gas many markets.

Low Gas Prices Encourage More Oil Drilling. But low natural gas prices are their own worst enemy reducing the margins for producers so the switch is on as more producer shift their focus from natural gas to oil and petroleum liquids.  The same plays that have brought us natural gas can, in many cases, bring us oil and valuable petroleum liquids from the same private lands development reducing oil imports.

The markets are ruthlessly efficient at rationalizing changing supply and demand conditions.  As new rules and low gas prices undermine the economics for coal in US markets, that coal is finding new markets abroad in an energy hungry world.  Low gas prices are also moderating the E&P activities in natural gas causing producers to shift their drilling to higher prices oil and liquids.  Amazingly, no intervention from the government is required for rational economic behaviour to restore equilibrium.  Think of that!

By. Gary L Hunt

Gary Hunt is President, Scalable Growth Strategy Advisors, an independent energy technology and information services adviser and a partner in Tech & Creative Labs, a disruptive innovation software collaborative of high tech companies focused on the energy vertical. He served as VP-Global Analytics & Data at IHS/CERA; global Division President at Ventyx, now an ABB company; and Assistant City Manager-Austin Texas responsible for Austin Energy and Austin Water.


Download The Free Oilprice App Today

Back to homepage






Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News