US still in early stages of natural gas development and export

Fuel Fix:

The flood of natural gas unleashed by the shale boom is shaping the North American economy in wide-reaching and disparate ways, fueling a switch from coal-fired power plants to a cleaner-burning fossil fuel, triggering a rebirth of the petrochemical and manufacturing industries and bringing home jobs from overseas, a panel of top gas industry executives said Wednesday.

At a time when wild swings in oil markets have sown anxiety about the future of the U.S. oil industry, vast supplies of natural gas continue to give North America a distinct competitive advantage over other countries, the CEOS of three companies that pump, transport and supercool natural gas said during a panel discussion on the third day of IHS Energy’s weeklong CERAWeek conference.

Domestic natural gas remains a good bet, thanks to its ample supply and stable, albeit low, prices, the panelists said.

“We’re in the fourth inning. I believe that we’re in the fourth inning,” said Michael Smith, CEO of Freeport LNG, which is building a $13 billion plant south of Houston to export liquefied natural gas. “We’re not in the ninth.”

Projects like Freeport LNG have provided one of the most dramatic examples of how swiftly the influx of natural gas changed the energy outlook for the United States.

The Freeport terminal was originally conceived as an import facility with plans to take in overseas shipments of LNG, warm it back to its gaseous state and pipe it out to customers in the U.S. where gas supplies were expected to become scarce. Advances in hydraulic fracturing and horizontal drilling allowed drillers to tap into previously untouchable reservoirs of gas and seemingly overnight, the U.S. went from worrying about a lack of natural gas to having more than it could consume on its own. Natural gas prices plummeted. Companies stopped pulling it from the ground. Without the pipelines to bring it to market, drillers burned it off at the wellhead.

This newfound abundance created a new business opportunity for mothballed LNG import terminals. More than 30 projects have been proposed to export LNG from the continental U.S., and while analysts doubt all will be built, projects like Freeport LNG that have existing facilities and were first in line for federal approval are the most likely to cross the finish line.
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Europe is one obvious market for the esxports that will help them deal with Russian extortion.  But South America and Asia are also huge potential markets for the export terminals.