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America's gas exports

February 18, 2024

During the past eight years, the United States has witnessed remarkable transformations that have brought profits to oil and gas companies and strengthened American influence abroad. The United States has risen from being a country that barely sells gas abroad to being the number one supplier of liquefied natural gas in the world.

US LNG exports reached monthly and annual record levels in December 2023 – according to Reuters – which analysts say has put the United States in a position to overtake Qatar and Australia; To become the largest exporter of liquefied natural gas in 2023.

This record growth is due to two main factors: the return of the Freeport LNG plant to full capacity, which added 6 million MT, and the full production of Venture Global LNG's Calcasieu Pass plant, which added 3 million MT from 2022.

LNG exports contributed significantly to the growth of total natural gas exports, although natural gas exports via pipelines also increased.

US natural gas exports via pipeline to Canada and Mexico increased by 4% (0.3 Bcf/d) in the first half of 2023 compared to the first half of 2022; Its average reached 8.8 billion cubic feet per day.

Net natural gas exports via pipelines, especially to Mexico, have contributed to record levels of natural gas exports.

U.S. natural gas exports by pipeline to Mexico reached a monthly peak of 6.8 billion cubic feet per day in June, representing about 66% of total U.S. pipeline exports from January to June.

According to data published on the US Energy Information Administration, Figure 1 shows that the United States of America’s exports of natural gas increased significantly from 2000 to 2022. It was only 0.2 million cubic feet, then it rose to approximately 7 million cubic feet in 2022, with the share of liquefied gas exports compared to the share of pipelined gas exports increasing gradually and noticeably beginning in 2016, until it exceeded the amount of gas exported through pipelines in 2021. Until 2022.

Figure 2 highlights US gas exports from 2017 to 2022, which explains the increase in US gas exports in the recent period by the continuous increase in liquefied gas exports. This is due to the growing trend among European countries towards importing liquefied gas from the United States to replace Russian gas.

Negative effects of US gas export:
Despite the economic and political benefits of exporting American gas, there are some negatives, especially at the environmental level.

The study (Kemal Sarica, 2016) finds that allowing the export of natural gas leads to a small decrease in US GDP, and also increases greenhouse gas emissions and other environmental emissions such as particulate matter, and higher electricity prices.

This study also finds that the United States does not receive significant export revenues, and higher gas prices resulting from increased exports cause widespread losses in the commercial, industrial, and residential sectors.

Low electricity prices due to the abundance of gas also put economic pressure on renewable and other energy sources. Which may hinder the shift towards a more sustainable energy mix.

In the last week of January, the White House issued a surprise statement announcing a temporary suspension of contracts related to LNG exports to non-FTA countries. This decision is intended to give the Department of Energy enough time to make updates to the basic analyzes of the licenses.

The statement explained that the current methods used by the Department of Energy to evaluate LNG projects do not sufficiently take into account potential increases in costs for American consumers and manufacturers, in addition to the impact of greenhouse gas emissions, specifically methane and its catastrophic impact on the climate, and the temporary pause is expected to give the opportunity To incorporate these considerations is vital in future analyses.