Adoption of alternative energy sources has increased significantly, given increasing awareness about reducing greenhouse gas emissions and lowering rate of climate change. While renewables like solar and wind are more preferred options when it comes to the development of a carbon-constrained environment, demand for natural gas is gaining steam as it is the cleanest fossil fuel.
For the United States, rising demand from emerging Asian markets is driving natural gas exports.
U.S. Natural Gas Exports Impress
Per the U.S. Energy Information Administration’s (EIA) latest report, in the first half of 2018, net natural gas exports from the United States averaged 0.87 billion cubic feet per day (Bcf/d), more than double the average daily net exports in 2017. Impressively, the United States, which became a net natural gas exporter on an annual basis for the first time in almost 60 years in 2017, continues to export more natural gas than it imports.
Currently, the country has a huge surplus of natural gas production, which has encouraged construction of pipelines and port facilities thereby enabling America to become a major exporter of the commodity. Notably, gross production of natural gas in the United States has increased lately buoyed by production enhancement in the Appalachian Basin in the Northeast, the Permian Basin in western Texas and New Mexico, and the Haynesville Shale in Texas and Louisiana. Per an EIA report, as of August 2018, these three regions collectively accounted for nearly 50% of total U.S. natural gas production compared with less than 15% in 2007.
New drilling and completion techniques, including longer well laterals that have increased well productivity, have boosted production in these regions.
LNG Demand on the Rise
Rising global demand for Liquefied Natural Gas (LNG – Free Report) remains a major growth driver for the booming natural gas market, buoyed by increasing liquefaction capacity and utilization. Interestingly, Asia is playing a dominant role in driving LNG demand, with China taking the lead. Through 2017, the United States shipped 103,410 million cubic feet of LNG to China, surging from just 17,221 million cubic feet a year ago.
