We’ve written many times about the bright future for U.S. liquified natural gas (LNG) exports. Two years ago, we noted how the U.S. was on track to become the world’s largest LNG exporter by 2023. However, we’ve reached that milestone a year early as Europe’s energy crisis has increased demand for American shipments to new levels.
Last December, the U.S. bested its closest competitors Australia and Qatar shipping out a record-breaking 7.7 tons of LNG. This first-place ranking is expected to go unchallenged through 2022. It’s an impressive feat given that the first U.S. LNG exports left port just six years ago.
Yet, U.S. LNG competitors aren’t just sitting on their hands. For example, Qatar is laboring to increase its export capacity to 139 million tons per year, likely making it the world’s leading LNG exporter by 2030.
The news of robust U.S. LNG exports comes on the heels of Russia’s invasion of Ukraine. Western Europe was facing an energy crisis months before the attack. And, If anything, Vladimir Putin’s unprovoked war in Ukraine only highlighted Europe’s unquenchable thirst for this critical economic commodity. Why? European Union (EU) countries currently receive 40% of their natural gas from Russia. But, with their unanimous support of Ukraine, EU leaders rightly fear that Putin’s tap could turn off.
Fortunately, the Biden Administration is moving to assuage these energy shortage fears. On March 16, the Department of Energy issued two critical orders; Combined, these orders permit two Cheniere Energy owned export terminals in Louisiana and Corpus Christi, Texas to ramp up production and export LNG to any country with which the U.S. doesn’t have a free trade agreement, including all of Europe.
The capacity to meet the increased demand for U.S. LNG exports is a testament to the technological innovation and success of the U.S. oil and gas industry. Europe would clearly be more captive to Putin’s natural gas without this innovation. Let’s hope the Biden Administration follows its most recent orders by generally championing the U.S. natural gas industry and by cutting the regulatory “red-tape” that would do anything but establish the U.S. as the unquestioned and unparalleled leader of global LNG exports.