Newcomer to the exportation of liquefied natural gas (LNG), the United States, is gearing up to become the leader in export, given its projections.
Speaking at day two of the three-day Energy Conference held at the Hyatt Regency Hotel last Tuesday, Shawn Bennett, deputy assistant secretary for oil and natural gas at the Department of Energy outlined the growth from consumer to mass producer.
"Because we are blessed with so much natural gas in the United States really the price is going to dictate the drilling and it's not the resources going to dictate the price. As we see LNG exports increase, the drilling will be able to ramp up and meet our needs."
Bennett said with consumption of LNG worldwide expecting to increase, the US' dominance, based on their projection, will not relent.
"According to the International Energy Agency (IEA) global gas consumption is expected to reach about four billion cubic metres by 2023 adding about 376 billion cubic metres. The markets will be the Asia and Pacific regions which will account for over half of the consumption of the growth from 2023 and much of this natural gas growth demand will be met with LNG."
He added that there are seven projects currently in operation with current export capacity of around eight billion cubic feet a day or about 80 billion cubic metres per year. This as the US hopes to have other projects online by 2022 through 2025.
Despite these boasts as well as others, he said the US should be looked at as a partner rather than a competitor.
In 2016, the US began exporting LNG to Barbados while still importing from TT, according to a report by the US Department of Energy. Barbados, the report stated, purchased LNG for almost double the amount the US bought from TT. In August 2019, NS Energy placed the US as fourth on the exportation of LNG in the world with Qatar being the top exporter. According to the article, Qatar exported 104.8 billion cubic metres the previous year.
"Since the United States began exporting LNG, the US exported more than 3.5 trillion cubic feet. Moreover, over a hundred billion cubic metres of natural gas has been exported as LNG to 37 destinations on five continents. From November of 2019 South Korea has been our largest importer of US LNG, followed by Japan, Spain, Mexico and France. Now while over 35 per cent of the exports have gone to the Pacific region, over the three plus years the US has been exporting LNG, the EU was the top destination in 2019, taking 172 cargoes."
Bennett said one of the reasons the US is pleased to be back in the exportation of LNG since the 1950s is the opportunity to increase global energy security.
Backed by legislation, there are now smaller companies allowed to export LNG to the Caribbean and Central and South America, Bennett said, to meet the needs of a smaller market. What adds to the US competitiveness is their no final destination policy.
"We recognise that we are newer to LNG so we wanted to make sure that those who are doing business in the United States know about how serious we take this. So, the Department of Energy has no record of ever having vacated or resented an authorisation in the export of natural gas. Under these export authorisations there is no destination. So once the LNG makes it on the open water, if it is headed to Spain and it needs to go to the UK it can, or go to Korea if it needs to go to China. They (the company) can make that decision."
Purchasers of US LNG, then, may sell/deliver LNG to any entity unless there is a country-specific US sanction against that country, making US LNG one of the most, if not the most flexible LNG on the market."
Bennett noted results of a study done in the US that claimed US LNG, versus alternatives, is also better for the environment.
"What we found in the 2019 study was that US LNG exports will not increase global greenhouse submissions versus other fuels that it will be replacing. So you're seeing that environmental benefit to providing LNG around the globe."