The Energy Edge: High on Supply - US Nears Complete Self-Sufficiency in Natural Gas

The steady stream of positive natural gas news continues to flow. But while it’s easy to sit back and look at the industry through rose-colored glasses, there’s still work to be done to make this bright future a reality.

A recent report from the U.S. Energy Information Administration (EIA) found that in 2018, 90 percent of the natural gas used in the United States was produced domestically, with the main users being electric power and the industrial sector. A few decades ago, such an accomplishment was unthinkable. Yet through the hard work of producers in the Appalachian region, along with Texas, the U.S. is becoming almost completely self-sufficient in natural gas consumption.

This follows news of the U.S. finally becoming a net exporter of natural gas for the first time in almost 75 years and increasing chemical industry investments in natural gas. Both natural gas production and consumption reached record highs of about 30 trillion cubic feet (Tcf) in 2018. In fact, the Marcellus and Utica regions are now together the largest source of natural gas and gas liquids in the entire world.

Yet, despite all this growth, there is still plenty of opportunity for the industry to take advantage even more.

The little energy that could

While the U.S.’s supply of natural gas can sometimes seem as if it’s growing quicker than the industry can sell it – production is expected to more than double by 2040, according to the EIA – it’s certainly not for a lack of trying.

Energy Secretary Rick Perry recently spoke about how he’s working to grow U.S. liquefied natural gas (LNG) exports around the country. Today, he says, 36 countries are buying LNG from the U.S. with hopefully more on the way. In the past few months, the Federal Energy Regulatory Commission (FERC) has approved a number of new LNG export projects and is expected to continue doing so. Meanwhile, greenhouse gas emissions have consistently declined across the U.S. since their peak in 2007, including significant reductions in Perry’s home state of Texas.

Meanwhile, the reality is that challenges – both financial and political – still remain. While Berkeley, California’s removal of gendered language from its city code got most of the headlines, it’s the move to ban natural gas from nearly all new buildings that presents a real issue for Californians. In New York an aggressive climate plan threatens to halt and even reverse progress in the natural gas space. Other states and local municipalities will no doubt look to follow suit, which is why the industry is already showing its fight and will need to continue doing so. New York gas utilities provider National Grid announced a suspension on processing new natural gas service applications in some of its territories until the Northeast Supply Enhancement (NESE) gas pipeline receives permits to move forward.

It’s clear that many in the industry are doing what they can to push natural gas downstream. But as always, there’s more that can be done.

The Edge: It’s time for natural gas to show its worth

During the past 20-plus years, the natural gas space has shown its possibilities. Hydraulic fracturing has paved the way not just for growth in the industry, but growth as a country. No longer is the U.S. reliant on foreign producers to power American homes, vehicles, industries, and more. The country is doing it all on its own now, and the natural gas space is to thank for that.

But the full scope for what this industry can achieve doesn’t end there. There are opportunities for more downstream development – if politicians allow it to happen. There are opportunities for more exporting – if politicians allow it to happen. There are opportunities to spread LNG to more people across the U.S. – again, if politicians allow it to happen.

It’s on the industry to make the case for natural gas to representatives in Washington, D.C. and at the state level every day. Growing the natural gas market isn’t just a benefit for the industry, but for Americans as a whole. And that isn’t hyperbole. But if we sit back and simply enjoy the recent good fortune, the industry will never reach its full potential.