• 4 minutes Energy Armageddon
  • 6 minutes How Far Have We Really Gotten With Alternative Energy
  • 10 minutes Russia Says Europe Will Struggle To Replace Its Oil Products
  • 2 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 45 mins Reality catching up with EV forecasts
  • 5 days "Natural Gas Price Fundamental Daily Forecast – Grinding Toward Summer Highs Despite Huge Short Interest" by James Hyerczyk & REUTERS on NatGas
  • 5 days A Somewhat Realistic View of the Near Future for Electric Vehicles Worldwide
  • 20 mins 87,000 new IRS agents, higher taxes, and a massive green energy slush fund... "Here Are The Winners And Losers In The 'Inflation Reduction Act'"-ZeroHedge
  • 11 days The Federal Reserve and Money...Aspects which are not widely known
  • 15 days US Oil Independence is a myth and will always be a myth
  • 15 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
The Bullish Case For Natural Gas Futures

The Bullish Case For Natural Gas Futures

The possibility of a Freeport…

Europe’s Natural Gas Prices Have Fallen 25% This Month

Europe’s Natural Gas Prices Have Fallen 25% This Month

Europe’s natural gas prices are…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Premium Content

Recent Events in the Battle to Export US LNG

This post is more of an appetizer compared to a more hearty meal which is to follow. The main course served later delves into a study on LNG exports and their potential economic impact. But before tucking into that, it seemed prudent to recap recent events regarding LNG exports and all that gubbins.

–There have been two different facilities approved to export LNG by the Department of Energy (DOE), Cheniere Energy’s Sabine Pass terminal in Louisiana (in May 2011), and Freeport LNG’s Quintana Island terminal in Texas (in May 2013). Sabine Pass has been granted the ability to export 2.2 Bcf/d, and Freeport 1.4 Bcf/d.

–While both have approval from the DOE, only Sabine Pass has regulatory approval from the Federal Energy Regulatory Commission (FERC). The DOE’s approval is more from an economic / public interest standpoint, while FERC’s approval is more from an environmental perspective.

Related article: Cook on Offshore Natural Gas Rig is Paid $240,000 a Year

ADVERTISEMENT

–The two facilities are authorized to trade with all Free Trade Agreement (FTA) anda non-Free Trde Agreement nations (think: Japan). Most of the terminals going through the approval process have already been approved to export LNG to FTA’s (…because the US only has FTA’s in place with 20 countries - it is not considered a significant market).

–The two facilities have been granted the ability to export 3.6 Bcf/d combined. Current US marketed domestic production is just shy of 70 Bcf/d, so if domestic production only shows a minor increase in the coming years (as is the base case of the EIA), this volume would account for 5% of total production. Not an inconsequential volume.

–The DOE has been assessing 20 applications for export terminals in the last few months, which if all approved, would present the prospect of well over a third of US domestic production being shipped out each day. Scary? Yep! Likely? Not on your nelly.

ADVERTISEMENT

–Some of the more bullish projections still only expect approval of 6.5 Bcf/d by the end of the decade. As for the 3.6 Bcf/d already approved, this is maximum capacity that could be exported, and doesn’t necessarily infer it will be.

North American Liquefaction Projects

Related article: Time to Hop on the Natural Gas Train

The crux of the LNG export debate is to find the right balance between approving enough volume as to spur on the maximum economic benefit through job creation and trade deficit reduction without significantly boosting prices. Which is something we will delve into in Part 2.

Given the recent events outlined above and the response by the natural gas forward curve (hark, a swift rally), although momentum is building for more approvals, we potentially are more than halfway through this process already.

By. Matt Smith


Download The Free Oilprice App Today

Back to homepage


ADVERTISEMENT


ADVERTISEMENT



Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News