• 4 minutes Who Really Benefits From The "Iran Attacked Saudi Arabia" Narrative?
  • 7 minutes Trump Will Win In 2020
  • 12 minutes Ethanol, the Perfect Home Remedy for A Saudi Oil Fever
  • 15 minutes Experts review Saudi damage photos. Say Said is need to do a lot of explaining.
  • 1 min Millennials: A boil on the butt of the work ethic
  • 8 hours Hong Kong protesters appeal to Trump for support.
  • 18 hours Europe: The Cracks Are Beginning To Show
  • 7 hours A little something for all you Offshore swabbies
  • 20 hours Iran Vows Major War Even If US Conducts "Limited Strikes"
  • 15 hours Ban Fracking? What in the World Are Democrats Thinking?
  • 6 hours Memorize date 05/15/2018 cause Huawei ban is the most important single event in world history after 9/11/2001.
  • 3 hours When Trying To Be Objective About Ethanol, Don't Include Big Oil Lies To Balance The Argument
  • 3 hours LA Times: Vote Trump out in 2020 to Prevent Climate Apocalypse
  • 1 min US and China are already in a full economic war and this battle for global hegemony is a little bit frightening
  • 5 hours Saudi State-of-Art Defense System looking the wrong way. MBS must fire Defense Minister. Oh, MBS is Defense Minister. Forget about it.
  • 6 hours Shale profitability
  • 2 hours Pompeo: Aramco Attacks Are An "Act Of War" By Iran
  • 15 hours Let's shut down dissent like The Conversation in Australia
Alt Text

U.S. And Russia Battle It Out Over This Huge Iraqi Gas Field

The geopolitically strategic gas field…

Alt Text

US To Supply More Than Half Of Global Gas By 2035

The United States is expected…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Is the Bright Future of U.S. Natural Gas Under Threat?

This week’s World Gas Conference in Washington hosted a bunch of upbeat natural gas executives and analysts that expect an exceptionally bright future for the bridge fuel of the future, as natural gas is commonly called these days. With forecasts that U.S. production of natural gas could grow by 60 percent over the next 20 years amid booming demand as consumers seek to replace coal with cleaner alternatives, there is certainly reason to be optimistic.

The United States is already the world’s largest producer of natural gas. It is also an emerging exporter of the commodity, with the potential to disrupt international gas markets as it gets increasingly competitive with other suppliers. Yet there is a shadow on the horizon. In fact, the shadow is much closer: the trade spat between Washington and Beijing.

China is a natural priority for all gas and LNG exporters. It is set to become the world’s top gas importer next year, with demand for gas there expanding by 60 percent between 2017 and 2023, according to the International Energy Agency. The Asian economy will alone account for as much as 37 percent of the world’s gas demand growth over the next five years. It makes all the sense in the world to make sure a lot of your gas goes to China.

So, U.S. producers have been pumping more gas and planning to build a lot more LNG export capacity. To date, the country produces about 72 billion cu ft of natural gas daily, and by the end of the year this should expand to 79 billion cu ft. Related: The Saudis Won’t Prevent The Next Oil Shock

Data from the Energy Information Administration shows that in March this year, the daily rate of exports was around 9.577 billion cu ft, with most of this going to Canada and Mexico by pipeline. LNG exports for March stood at 91.54 billion cu ft with the biggest portion, again, going to Mexico. LNG exports to China and India were split almost evenly at 10.74 billion cu ft going to China and 10.83 billion cu ft going to India.

Although not a huge amount, the cargoes to China have the potential to grow as long as producers keep pumping enough to maintain prices at an appealing level. But the trade dispute between China and the United States could hamper this growth.

The latest exchange of tariffs between Washington and Beijing saw the latter include in its list of U.S. goods and commodities oil and coal imports. For now, LNG has been spared, but this has not made producers any happier. It could be added to the list at any time.

French Total’s CEO recently warned that the tariff threat exchange could seriously hurt the chances of U.S. gas competing on a more equal footing with gas coming to China from Russia, Australia, and other rivals. The French company is one of the top LNG traders globally and has been expanding its footprint in the United States, taking part in the construction of two new export terminals in Louisiana. Related: China Is About To Disrupt Natural Gas Markets

“The US has a very good game to play in the LNG business, but the market is mainly driven by Asia, [particularly] by China,” Patrick Pouyanne said as quoted by the FT, adding that he hoped it would not “lose the Chinese market”.

Long-term, however, the prospects remain bright, according to industry executives and analysts. The world is moving from coal and oil, and this trend looks irreversible, so gas demand growth is a near certainty. The United States is set to benefit from this demand growth, trade spat or no trade spat.

In its “Gas 2018” report, the IEA said the country will account for almost 70 percent of the growth in global LNG exports between 2017 and 2023, and it will also be the leader in gas production growth in the period. Unless things deteriorate quickly beyond the point of recovery between Washington and Beijing, a remote possibility, those gas industry executives are right to be optimistic.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Dan on June 29 2018 said:
    Most interesting was the one, just one article on the web that posted the large list of big auto companies who are greatly silent on the natural gas cars coming to market by 2025. Very quietly. I'm keeping my money on Saudi oil moving to " my grandfather rode a camel, my father rode a Mercedes, I ride a Mercedes, my son will ride a camel. "

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play