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The U.S. Coming To Dominate The Globalizing Natural Gas Market

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© 2019 Bloomberg Finance LP

Since the U.S. shale revolution took flight in 2008, natural gas production has soared 60% to nearly 90 Bcf/d

Even though demand has risen 30% to over 80 Bcf/d, our gas imports have plummeted 30% to below 8 Bcf/d, basically all of which gets piped in from friend Canada.

This has helped greatly increase U.S. gas security, essential since natural gas is now increasingly our go-to fuel for electricity.

In fact, we now account for 22% of total global gas production and yield 25% more gas than 2nd place Russia.

This boom in domestic gas production has given American families and businesses some of the lowest prices in the world.

This is important because many of our international competitors are relentlessly (and unfairly) supported by governments, which is clearly a detriment to the fair market.

Moreover, more gas in the U.S. power system, for instance, has drastically reduced our greenhouse gas emissions to abate climate change: “Thanks to Natural Gas, US CO2 Emissions Lowest Since 1985.”

And remember to ignore the naysayers: "Natural Gas Dominates Under EPA's "Clean Power Plan."

Photo Credit: BP

The good news is that the U.S. shale revolution will not be slowing down anytime soon.

We are expected to still supply the most amount of incremental gas in the coming years.

The U.S. Department of Energy forecasts that domestic production will continue to increase non-stop 1-2% per year for as far out as it models through 2050.

And the reality is that history has proven DOE modeling to underestimate new U.S. gas output.

There is THAT much gas to produce here at home, and our companies have become THAT efficient perfecting the constantly evolving technologies and operations used in fracking and horizontal drilling for shale.

And as a big return of such rising production and low cost supply, we will also become the world’s largest gas exporter, increasingly crucial because the “dash to gas” is global.

Photo Credit: IEA

And our primary export focus will be LNG, liquefying natural gas and putting it on cargo ships to sell to nations all over the world.

Now accounting for ~14% of total gas consumption globally, the future for LNG is as bright as any energy market.

The trade has been growing 8-10% annually recently and is expected to grow 4-7% per year for decades.

Asia constitutes 70-75% of global LNG demand, while Europe is at about 15%.

China and India are the primary incremental LNG buyers, but other massive still developing nations are emerging, such as Bangladesh and Pakistan.

If a trade deal can get worked out, the U.S. could even be the largest seller to all-important China by 2024.

Today, Qatar and Australia are the largest sellers globally, but the International Energy Agency now expects the U.S. to lead by 2024.

Around 65% of global LNG is still precariously linked to the price of oil.

Thankfully, the U.S. is helping to change this.

We offer more flexible and short-term (and even spot) contracts that are quickly bringing vital liquidity to the long overly rigid LNG business.

And this is a great thing because more U.S. natural gas not only helps cut greenhouse gas emissions but it also brings an affordable, reliable, and modern energy source to poor people all over the world: "Remembering Stockholm: The Environment is People and Their Necessity for More Energy."

We are also giving buyers more options to disengage from undemocratic nations that regularly infringe on human rights

Russia and the Middle East, for instance, hold a combined 60% of proven global gas reserves.

Buyers aligning closely with these suppliers will cause global geopolitical headaches for us - or far worse.

U.S. LNG will continue to bring enhanced energy security to a swiftly globalizing gas market in a world that needs huge amounts of more energy: electricity demand will more than double by 2050.

The future of natural gas is obviously very bright: International Energy Agency forecasts indicate that demand increases even under the most stringent of climate policies to limit the average global temperature increase to 2°C by 2100.

Photo Credit: IEA

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