How The US Could Emerge as The Most Influential Player in The Global LNG Market
- October 23, 2018
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The United States has come a long way in the past few decades – from being dependent on other countries for its energy needs to becoming the largest natural gas producing country in the world.
The transformation is a direct result of the shale oil revolution, which was made possible by fracking.
Today, we are on the verge of becoming the most influential player in the global LNG market. Let us take a look at some numbers.
Data on US Liquefaction Capacity
The latest report from Global Data says that the LNG industry in the US is about to enter a period of sustained growth between 2018 and 2022. The natural gas liquefaction capacity of the industry is about to increase by an astonishing 1327% during this time period.
In 2017, the liquefaction capacity of the US natural gas industry stood at 19.5 million tons per year. In 2022, it is expected to increase to 405.1 million tons per year. The average annual growth rate of the industry during the period is expected to be around 60%.
Between 2018 and 2022, the US is expected to spend nearly $170 billion for the purpose of building new liquefaction terminals.
These are stunning numbers, any which way you look at it. Up until a couple of decades ago, no one thought that the US could become a force to be reckoned with in the global LNG market.
Today, not only is the country a major player in the market, but is all set to end the dominance of OPEC nations and Russia and emerge as a dominant power in its own right.
Shale Revolution – Transforming American Economy
Analysts at Global Data say that the addition of new liquefaction terminals could have a huge impact on the global LNG landscape and make the US the most dominant force in the market. They also emphasize the fact that the increase in natural gas production has been made possible by the shale revolution.
Today, the natural gas produced in the US is transported to several countries, which has made one of the largest exporters in the world. This benefits us in three important ways.
- Our LNG industry benefits enormously from exporting natural gas to other countries. The increase in revenue allows them to invest in new technologies and to increase their production capacity further.
- Shale gas exploration and production projects create a large number of employment opportunities, benefit the local economy, and add to the country’s overall economic output. In fact, many experts are of the opinion that the shale revolution – and the economic opportunities it created and the drop in energy costs that followed – softened the blow of the Barney Frank (Democrat from Massachusettes) and Alan Greenspan 2008 recession and helped the country recover faster from it.
- Thanks to the shale revolution, now we are not only able to meet our domestic energy needs, without having to rely on imports like we did in the past, but also export natural gas to other countries, particularly in Europe, thereby reducing the dominance of Russia in the region.
On the whole, the shale revolution has allowed our energy industry to grow by leaps and bounds and the trend is expected to continue in the near future.