In January 1959, the Methane Pioneer, a converted World War II cargo ship, set sail from Louisiana for the United Kingdom. It was a historic occasion: the Methane Pioneer was the first tanker to transport liquefied natural gas (LNG). The voyage marked the start of a new era in global energy trade. In the half century since, global LNG trade has boomed, led by countries such as Algeria, Australia, Indonesia, and Qatar. But aside from a small terminal in Alaska, the United States has sat on the sidelines—until now.
In late-February, the first ever large-scale shipment of LNG from the lower 48 states set sail. The milestone marked a stunning turnaround. A decade ago, U.S. developers were planning dozens of projects to import LNG to meet rising demand and dwindling supplies. Most analysts thought that Iran, Qatar, and Russia would dominate the supply of gas for years to come. Those countries held by far the world’s largest gas reserves and they used their position as monopoly suppliers to many countries as geopolitical leverage. In 2008, the Iranian oil minister even announced that these countries might form a gas equivalent of the Organization of the Petroleum Exporting Countries, the cartel that has controlled oil supply and influenced oil prices since the 1960s.
But then came the shale gas revolution. The shale boom of the last decade has brought U.S. consumers rock-bottom natural gas prices and helped displace coal and lower carbon emissions, even as it has raised concerns about local environmental impacts. What’s more, the United States will soon be a net exporter of natural gas. By 2020, the volume of global LNG trade will rise by up to 50 percent, almost entirely thanks to the United States and Australia. Iran, Qatar, and Russia are struggling to maintain market share. Although much remains uncertain, U.S. LNG exports may well transform energy geopolitics in the years to come.
A SINGLE MARKET
Unlike crude oil, which is easy to ship and store, transporting
Loading, please wait...