How the United States became the world’s largest LNG exporter

In 2003, the late author and investment banker Mother Simmons predicted with “certainty” that the United States would be in a long-term natural gas crisis by 2005, and that the only solution was “pray.” Ta. T. Boone Pickens and many prominent energy figures agreed.

ConocoPhillips COP and ExxonMobil XOM have made major acquisitions of natural gas companies, betting on a future where natural gas prices will rise significantly. A liquefied natural gas (LNG) import terminal was being built to address anticipated supply shortages.

By 2005, U.S. natural gas production began to decline. Natural gas spot prices regularly soared above $10 per million British thermal units (MMBtu), sometimes reaching $15/MMBtu.

What happened next was unexpected. Natural gas producers were experimenting with a combination of hydraulic fracturing (“fracking”) and horizontal drilling. Their success will change everything.

Far from continuing to decline, U.S. natural gas production increased significantly by 2007. The industry was in the early stages of the largest expansion in U.S. natural gas production history.

Ten years later, natural gas production has increased by 50% over 2007 levels. Now he has increased by 86% and is still increasing. In the process, LNG import terminals were converted into his LNG export terminals, and more terminals were built.

The expansion of natural gas has been so dramatic that in 2016 the United States began to sharply increase its LNG exports. Initially, export volumes were small compared to the world’s two largest LNG exporters, Qatar and Australia. However, the rate of increase was rapid, and it looked like the United States could soon overtake these countries to become the world’s largest LNG exporter by 2022.

That’s what’s happening now, according to data compiled by Bloomberg. According to data through the end of December 2023, U.S. exports reached a record 91.2 million tons. The United States will overtake Qatar and Australia as the world’s largest LNG exporter in 2023.

The production increase was due to Freeport LNG returning to full service with an increase of 6 million tonnes, and Venture Global LNG’s Calcasieu Pass facility’s full-year production increasing by 3 million tonnes from 2022.

This is an extraordinary accomplishment for U.S. natural gas producers, but it’s even more impressive given the state of the industry in 2005. Predicting the future has proven difficult, even for a superpower like ExxonMobil.

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