![]() AAF determined this value by applying EIA projections of natural gas production and consumption to projections of natural gas prices, as well as LNG price estimates we derived from applying a coefficient to oil prices (LNG prices are commonly indexed to oil).ĪAF research estimates the annual trade value of natural gas exports will reach $31.8 billion annually by 2020, which would reduce our trade deficit by 7.3 percent. Cumulatively from 2016-2040 this would amount to $118 billion in federal revenue. By 2020 annual federal government revenues from natural gas exports could reach $2.7 billion, $4 billion by 2026, and $8.3 billion by 2040. Source: EIA International Energy Outlook 2016, and American Action Forum estimates.įor North American natural gas producers, adding the capability to export liquefied natural gas grants access to the highest value export markets which makes the value of exported LNG higher. The graph below shows the estimated production value of domestically consumed natural gas versus the total value. like Singapore and South KoreaĪccording to a previous AAF report, the cumulative nominal value of natural gas exports between 20 is expected to be $1.63 trillion USD. For that reason, other markets are currently being explored for exporting, including countries that have Free Trade Agreements with the U.S. With regard to the impact of future trade decisions on LNG exports, it remains to be seen what the incoming administration’s approach to trade with Mexico, one of the key U.S. The EPMA could be a boon to LNG exporters by putting a time limit of 45 days on the decision process for FERC. The approval requirement stems from a law set in 1938 which requires these contracts to be deemed “in the public interest.” The challenges of an ambiguous requirement being evaluated by regulators is leading to an approval process taking up to 4 years instead of 8 weeks One such policy that was included in the failed Senate version of the Energy Policy Modernization Act (EPMA) is accelerating the LNG Export Application Process.Īccording to another report by the American Action Forum, all applications for the export of LNG must be approved by the Federal Energy Regulatory Commission (FERC). policy does not allow exportation of natural gas without approval from the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DoE). According to a previous American Action Forum report (AAF), U.S. is exporting natural gas via pipeline, vessel and truck to Canada, Mexico, Argentina, Barbados, Brazil, Chile, China, India, Japan, Portugal, Taiwan and the United Arab Emirates.Ī May 2016 EIA report forecasted that much of the growth in natural gas exports will occur before 2030, as increased domestic natural gas supply satisfies new demand internationally with the development of LNG export capacity and growing demand for pipeline exports, and domestically, particularly in the industrial and electric power sectors.ĭespite the U.S.’s new status as a net exporter, there are still many obstacles to overcome. The image above represents 2014 liquefied Natural Gas (LNG) exports by country before the U.S. gas is readily available and comparatively cheaper to produce, and is expected to take over the number 3 spot in the next few years. Before that the global supply was dominated by countries such as Qatar, Malaysia, Nigeria and Indonesia as well as Australia. started exporting natural gas in February 2016, the world market has seen a major shift as U.S. This week, the Henry Hub spot price for natural gas was $3.48 per million British thermal units (MMBtu), using that price, natural gas exports would amount to nearly $26 million in earnings before interests and taxes each day or just over $9.6 billion per year. consumption of natural gas rose by 6% according to the Energy Information Agency (EIA). has been exporting, on average in November, 7.4 billion cubic feet of gas a day. According to the Wall Street Journal, the U.S. ![]() The United States has officially become a net exporter of natural gas, edging out imports in the past month. Using todays spot price for natural gas, exports could bring in over $9.6 billion in earnings before interests and taxes each year.The cumulative nominal value of natural gas exports between 20 will be near $1.63 trillion USD based on present value.is poised to be the number three exporter on the world market in the next 5 years ![]()
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