United States became a Natural Gas importer to exporter. Thanks to a boom in a shale gas drilling over the last decade, taking the country a giant step towards the goal of energy independence. Now the upheaval of the domestic energy sector is going global. A swell of gas in liquefied form shipped from Texas and Louisiana is descending on global markets, producing a broader glut and lower energy prices.
The United States was supposed to be a L.N.G. importer not a world class exporter. The drilling in shale gas fields across country changed that over last decade, creating a glut far larger than domestic demand could possibly consume. Companies has to change their build import platforms to export platforms, which will cost billions of dollar.
The switch will remake the global gas market for decades. Energy experts are predicting that the transformation will weaken Russia’s dominance over European power markets and help clean the air in cities across China and India by replacing the burning of coal and eventually provide cheaper and cleaner fuel to African villages.
The full dimensions of the wave over the next four or five years, including its impact on the environment and climate change, are hard to predict, in part because they will depend on the policies adopted by many governments. But as several American export terminals come on line , few doubt that the influence of more gas, as the cleanest burning fossil fuel, will be consequential for powerful and poor countries alike.
Gas experts point to Mexican model as an example of how transformative gas can be in a matter of few years. As the American shale boom accelerated, producing more gas than its northern neighbour could consume, Mexico decided to import as much cheap gas as possible. Mexico replaced its dirtier burning coal and petroleum products, and now more than a quarter of the country’s electricity is powered by American gas.
The gas imports have improved air quality, helped Mexico reach it’s goals to reduce its carbon footprint to meet Paris climate agreement targets and freed capital to invest in more exploration and production of oil, which is more valuable on world markets. Because Mexico has a border close to Texas oil and gas fields, pipelines have made the transformation relatively easy. Exporting and importing liquefied gas is more complicated.
Gas is expensive to ship overseas because it must be cooled to minus 260 degrees, condensing it to what is called liquefied natural gas, or L.N.G., to be shipped in giant tankers. The importing country then has to turn the liquid back into gas so it can be transported by pipelines. But even though liquefied gas is usually more expensive than piped gas or even coal, demand and supplies are growing fast.
Amy Myers Jaffe, an energy security expert at the Council on Foreign Relations said that this bulge of L.N.G. is going to completely upset the world’s energy politics and the global competition of fuels that is still hard for people to comprehend. Russia will be the loser. We can already see their leverage on the gas market in Europe and the leverage they are trying to create over China dissipating. Enough L.N.G. export capacity is under construction to catapult it from 33 percent to nearly 40 percent of the total international gas trade by 2022, even while piped gas shipments are also growing globally.
Lithuania became the first former Soviet republic to import a shipment of American natural gas in August, a symbolic move that came as Washington pledged to reduce the dependency of Europe on Russia, which has been known to use gas as a political weapon. The Lithuania shipment came only a month after Poland became the first Eastern European country to import American gas. Russia has already been forced to lower its gas prices to Europe in an attempt to diminish European thirst for American gas. That effort has cost Russian companies revenues and made expansion of L.N.G. facilities in the Arctic less economically feasible.
Forcing Russia to compete in a more competitive gas market in Europe and giving European consumers alternative sources of supply significantly weakens Russia’s geopolitical influence in Europe, said Jason Bordoff, who was a senior energy adviser to President Obama and is now director of Columbia University’s Centre on Global Energy Policy. The transition of the U.S. to one of the world’s largest gas exporters has very significant economic, environmental and geopolitical implications.