International Energy Agency Chief: “Huge Expectations Around the World” for U.S. LNG

As the world’s top oil and natural gas producer, energy exports strengthen the U.S. economy and geopolitical standing across the globe.

Earlier this week, Fatih Birol, executive director of the International Energy Agency, touted his great expectations for U.S. natural gas – made possible by shale development – and its potential impact on the global market:

“My belief is that the world has not seen yet the full impact of [the] shale revolution,” he told reporters at a press conference at DOE headquarters alongside Energy Secretary Rick Perry. “The first phase finished by mainly using shale oil and gas for the United States domestically. Now, the export phase comes and this will have major, long-lasting implications for global oil and gas markets.”  

Birol noted that there were only five liquefied natural gas import facilities overseas in 2000, but that figure will have ballooned to 49 around the end of next year. He also said that about two-thirds of the LNG export market growth over the next six years is slated to come from the U.S., which will compete with Qatar and Australia.

“This is going to change the entire dynamics of gas markets, gas security, gas pricing, among others,” he said. “There are huge expectations around the world for U.S. LNG.

U.S. LNG exports continue to increase with the growing export capacity. The U.S. Energy Information Administration (EIA) projects that LNG export capacity will reach 8.9 billion cubic feet per day by the end of 2019.

In February, the Federal Energy Regulatory Commission (FERC) approved the long-delayed Venture Global Calcasieu Pass export facility in Louisiana; many hope this will speed along the approval process for several other facilities along the coast.

The ramp up of natural gas exports will provide extensive economic and geopolitical advantages for both the United States and its allies abroad. Already, U.S. LNG has recently been filling an energy gap in Poland as the European nation looks to upgrade its energy security by diversifying its supply away from Russia, according to the New York Times:

“Poland is determined to end its reliance on Russian energy within the next few years, part of a broader effort in Europe to diversify the region’s energy supply. Relations with Russia have been unsettled, sometimes perilously, over political differences as well as the role of Poland, a former Soviet satellite, in NATO.

The country has found a ready replacement in the United States, which has an abundance of natural gas from the shale boom and a political incentive to ease Russia’s chokehold on Europe.

“Given a choice of suppliers and a good commercial deal, Poland was happy to buy American,” said David L. Goldwyn, who served as the State Department’s international energy envoy in the Obama administration and now heads an advisory firm, Goldwyn Global Strategies.

… Global L.N.G. imports grew by more than 9 percent last year, a much faster rate than oil or gas, according to Rystad Energy, a market research firm. While the United States is only a modest gas exporter now, it is on pace to be a global leader like Qatar in the coming decades, made possible by the disruptive technologies like fracking.”