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Don't Let Perfect Be the Enemy of Good

Thoughts & Data on the LNG Debate

TLDR Thoughts & Policy Considerations

We Provide Data to Frame the U.S. LNG Discussion

U.S. LNG exports in October 2023 were a bit over 12 Bcf/d. The U.S. is now the largest exporter of natural gas in the world.

Trailing 12-month LNG exports of 11 Bcf/d are at a record.

Over 16 Bcf/d of export capacity is currently approved and moving forward with FIDs. Reports have suggested proposed but unapproved facilities are now facing increased scrutiny.

The Focus on LNG Exports Alone Seems Misplaced

The U.S. natural gas market is large and complex. U.S. pipeline exports have increased 900% since 2000 at over 8 Bcf/d. The U.S. still imports 8 Bcf/d.

Some facts

  • Since 2000 the U.S. has imported 85 Tcf versus exporting 55 Bcf, for net imports of 30 Tcf

  • LNG exports to-date are 17.5 Tcf - compare that to 77.6 Tcf of natural gas imports since 2000

  • Since 2000, the U.S. has paid $386 billion for net imports, $100 billion more than funds received for exported gas

In total, the U.S. is exporting over 20 Bcf/d of natural gas.

The U.S. became a net exporter for the first time in 2017 as LNG export capacity ramped. Net imports are just over 12 Bcf/d.

Natural gas pipeline exports are under-discussed and significant, growing at a similar pace as LNG exports in recent years.

Mexico has been the largest beneficiary of increased U.S. pipeline exports.

Natural Gas Power Is Replacing Coal Power

Solar has seen impressed growth in recent years but is still a mid-single-digit contributor to the U.S. power stack. Wind has been effective largely in middle-America. Broadly speaking, natural gas has largely replaced coal generation over the last two decades in the U.S..

U.S. coal power generation is at all-time lows versus natural gas at all-time highs.

Coal-to-gas switching is economic and correlated with gas prices more so than renewable build-outs.

It’s Good Business

U.S. producers are receiving more for their product in export markets than U.S. markets. Significant investments have been made to invest in this price gap.

We wouldn’t push back on the idea of an annual assessment on U.S. natural gas reserve life tied to a long-term economic impact study. If U.S. consumers are being net harmed by LNG exports or if reserve life becomes worrisome, restricting LNG exports seems to be fair game. None of that appears to exist today. Curtailing U.S. LNG exports on environmental grounds in what is still a young U.S. LNG export industry feels like letting perfect be the enemy of good.

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