Full Title: An Assessment of U.S. Natural Gas Exports
Author(s): Tim Boersma, Charles K. Ebinger, and Heather L. Greenley
Publisher(s): Brookings Institution
Publication Date: 07/2015
Increased natural gas production in the United States has fueled a lively debate on the future of natural gas exports. This debate has focused so far predominantly on exports of liquefied natural gas (LNG). At the same time, the debate is clouded with many confusing statements about the regulatory regime related to natural gas exports with many foreign nations and even some domestic observers having the erroneous belief that the United States has severe restrictions on exports, when in fact no project has to date ever been rejected. In addition, estimates about the amount of U.S. natural gas that will be competitive in global markets vary widely, in part because a number of new supply sources are expected to enter the market in the coming years. There are also many uncertainties regarding global demand for LNG going forward. Finally, declining natural gas sales to the United States have incentivized Canada’s provincial and federal authorities to search for opportunities to market its product elsewhere in the world, though unconventional gas development in Canada trails U.S. production, and in some parts of the country gas infrastructure is less developed than in most parts of the United States.
This policy brief provides an assessment of U.S. natural gas exports in the coming years, as well as its competitive position vis-à-vis other suppliers that are emerging worldwide. It does so by briefly outlining the existing regulatory framework related to LNG exports from the United States. It then proceeds with a timeline for LNG export projects that are being developed.2 The policy brief then turns to what are currently considered major (potential) rivals of U.S. LNG, before it concludes with some final observations regarding the competitive position of U.S. LNG as of June of 2015.
This paper builds on extensive discussions within the Brookings Institution’s Natural Gas Task Force (NGTF), along with our analysis of available literature on existing natural gas production trends, price formation, and legal and infrastructural limitations. We are grateful for the rich debates that have occurred in our NGTF. Despite the generosity and valuable contributions of all our speakers and participants, this policy brief reflects solely our views, and any errors remain our own.