Jim Willis
Editor & Publisher, Marcellus Drilling News (MDN)

An interesting new report from the U.S. Department of Energy breakdowns exactly where in the world our domestically produced LNG exports are going.

The U.S. Department of Energy’s Office of Fossil Energy has just released an interesting report that shows the number and volume of LNG (liquefied natural gas) exports from Feb. 2016 (when U.S. LNG exports began) to Dec. 2017. It’s really quite fascinating.

For example, which country do you think we have (so far) shipped more LNG to than any other country? Someplace in Europe? Maybe Japan or China? Nope. The #1 one trading partner that received our LNG for 2016-2017 was…Mexico! That’s right, Mexico. Even though we have all sorts of natural gas pipelines crossing the border into Mexico. Apparently those pipelines don’t connect with large parts of the country, so LNG tankers meet the need instead.

Number two on the list of countries receiving our LNG exports: South Korea. Followed by China (#3), Japan (#4) and Chile (#5). The report also breaks down deliveries by other criteria. For example, even though Mexico was #1 on the list for our exports, if you break our exports down regionally, Asia/Pacific received most of our exports, while Latin America (including Mexico) was the #2 region.

Or how about this: Free Trade Agreement (FTA) countries vs. non-FTA countries. Would it surprise you to learn that non-FTA countries got more of our exported LNG (52.7%) than FTA countries (43.3%)? The reason MDN readers should be interested in LNG exports is because exports are a huge future market for Marcellus/Utica gas. Be sure to spend some time with this important report.

Click to read full report.

Editor’s Note: Our guest blogger and commenter Mark Dye brings to my attention another related story at E&E News, the headline of which says it all:

Environmentalists lost big on LNG exports. Now what?

The lengthy article, by their excellent reporter Ellen M. Gilmer, points out the following:

After years of fever-pitched opposition to liquefied natural gas exports, the Sierra Club quietly pulled its last LNG lawsuit from federal court last month.

The withdrawal followed a series of losses in similar cases, a subdued end to environmentalists’ chief legal campaign against shipping U.S. natural gas around the world. The Sierra Club considers LNG exports too risky for the climate, but federal judges repeatedly found that the government had sufficiently considered impacts…

But while environmentalists may have abandoned the specific approach used in the failed LNG challenges, they’re positioning themselves for a second wave of combat that could prove every bit as bothersome to the industry and the Trump administration…

Activists’ idea is to starve the system. The more expansive the infrastructure is, the easier it is to build LNG terminals; stopping the spread of pipelines dries up fuel sources for exports.

The Chesapeake Climate Action Network, one of the fiercest opponents of Dominion Energy Inc.’s Cove Point LNG export facility in Maryland, is at the forefront of that battle.

“Our goal all along was to prevent or keep at a low, low minimum the amount of gas that Cove Point ever exports,” CCAN Director Mike Tidwell said. “The fight continues to adhere to that original goal, and that is to make sure that the export facility at Cove Point is a failed enterprise. We tried to trigger the failure through the regulatory process to keep it from being built and the legal process, and now we’re on to the longer-term, multipronged movement.”

…The industry, conversely, is looking to capitalize on the Trump administration’s “energy dominance” agenda by advocating for a more streamlined DOE approval process.

“There’s an argument to be made based on what we know about supply that you could essentially treat all exports as ‘in the good of the public interest,'” said Riedl, the Center for LNG director.

In other words, the center thinks exports to countries without free-trade agreements with the United States — “non-FTA countries” — could skip the in-depth review process and instead receive the routine approval granted for shipments to free-trade partners.

There are two major takeaways from this insightful piece. First, non-FTA countries are likely to get even more LNG from us because it’s a way around burdensome regulatory processes and environmental extremist exploitation of the same. Second, those extremists are boldly and carelessly exposing their political non-scientific goals of starving LNG projects for the sake of ideological opposition to oil and gas development in general, which makes their future likelihood of success in courts dimmer by the decibel as they shout. 

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