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The United States’ share of global liquefied natural gas (LNG) exports has grown exponentially since 2016. The trend is likely to continue, according to the U.S. Energy Information Administration’s latest Annual Energy Outlook, as 2023 could be the year American exports top other major exporting countries.
The American LNG exporting industry has grown considerably over the past seven years. According to EIA data, LNG exports began to climb in 2016, with exports reaching 26 million cubic feet (Mcf) in January 2016. Since then, LNG exports rose more than 1 million percent, as U.S. exports totaled 337 billion cubic feet (Bcf) in January of this year.
The EIA’s Annual predicts that LNG exports will experience a triple-digit increase in the coming decades, which will also drive domestic dry gas production. According to the report, LNG exports could experience a 152 percent increase from 2022 figures to approximately 10 trillion cubic feet (Tcf) in 2050. A 15 percent increase in production is anticipated within the same time frame, achieving 42.1 Tcf.
The increase in production is expected to come from the Permian Basin in the southwest and Haynesville formation in the Gulf Coast due to their close proximity to LNG exporting infrastructure.
An explanation for the increased exports can be found when looking at its final destination. In 2022 69 percent of American LNG exports were destined for Europe, largely as a result of energy insecurity concerns brought on by the Russian invasion of Ukraine.
New realities in global energy markets have created a high demand for LNG in Europe that the United States is working to fill. In fact, last year the U.S. made a commitment to Europe to replace Russian gas, creating the joint Task Force on Energy Security with the European Commission, which secured increasing amounts of LNG to be exported to Europe through 2030.
As a result of increased exports, the U.S. is also bolstering its export capacity through the addition of new liquefaction facilities and export terminals. The EIA notes that new facilities and other infrastructure, like liquefaction facilities and LNG-specific railcars, are either now fully online and operational, or coming in the upcoming years. Chester County, Pennsylvania was recently explored as a potential site for a large LNG export terminal, but no official plans have been released.
LNG is expected to be a major source of exported energy through 2050, the EIA projects, although there can be some variation in the amount of natural gas produced depending on the price, available supply, and regulatory changes.