Why US Imports LNG Despite Its Gas-Export Boom

Why US Imports LNG Despite Its Gas-Export Boom
AP Photo/Carmelo Alen, File

More than a decade in and the U.S. shale boom keeps breaking output records, with fields from Pennsylvania to Texas producing more natural gas than the country needs. That has triggered billions of dollars of investments to ship liquefied natural gas overseas. Yet the U.S. is still importing LNG from places such as Russia and Nigeria. There are two reasons for that: pipeline bottlenecks and the requirements of a 1920 law meant to support a robust U.S. shipping industry.

1. Does the U.S. consume more gas than it produces?

No. Gas production jumped 12 percent in 2018 to a record 89.6 billion cubic feet a day while consumption was 81.7 billion cubic feet per day, according to the U.S. Energy Information Administration. The problem is getting it to the right places at the right time because of insufficient pipeline capacity near big metropolitan centers. Pipelines historically have been designed to operate at a reduced rate for most of the year so that when a cold snap hits, there's space for a surge in demand. But with the shale boom, many households, power plants and factories have switched from fuels such as heating oil and coal to take advantage of cheap gas. This added consumption means that some lines are close to full year-round and are thus unable to cope when demand peaks.

Read Full Article »
Show comments Hide Comments

Related Articles