Monday, January 22nd, 2018

US Now a Net Exporter of Natural Gas

US a Net Exporter of Natural GasUS natural gas exports increased tremendously over 2017. This occurred despite regulatory arguments, back-and-forth debates, a lot of pressure from disparate groups, and even uncooperative weather. Now, the US is a net exporter of natural gas for the first time since the late 50s. And, that trend looks to continue for the foreseeable future.

What Does It Mean to be a Net Exporter?

Net exporting requires an entity to export more than they import of a product. The US has reached a point where foreign entities are spending more on natural gas from the US than the US spends on it from out-of-country sources. This could have huge implications for the US trade imbalance going forward and possibly tip the scales back in our favor.

In 2016, the US trade deficit was approximately $500 billion. However, since Donald Trump has taken the office of President, he has stated that reducing the trade deficit is a priority for his administration. The US becoming a net exporter of natural gas is another huge step in that direction.

Keeping the Net Exporter Trend on Track

The US trajectory towards net export occurred year over year. A large concern is whether that trend was a fluke, or if it will continue. Reports by the EIA illustrate that there is no stopping this trend. The numbers and the recent activity in the US concerning natural gas also show no stop to this trend.

  • Exports to Mexico hit record highs and are only increasing
  • Production in the lower 48 reached record highs and continues to increase
  • Less gas is coming into the country from Canada
  • LNG exports have increased to various other countries

New pipelines from the Appalachian are coming. Shale production of natural gas is up. The Trump Administration champions opening large swaths of ocean acres to exploration. The list of countries around the world receiving natural gas from the US continues to grow.

Interestingly, while exports and production increase, domestic consumption was on a slight decline due to less severe winter conditions. This opens the door even wider to new opportunities for natural gas exports in foreign markets.

by Randall Kenworthy


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