U.S. government official says country to become key source of global energy supplies. The United States will become a key source of energy supplies to meet growing demand globally, with innovation in technology and financing set to boost U.S. oil and gas production in the next decade, the country’s top energy diplomat said.
“In the next 5-10 years, we expect to see improved recovery rates and even a doubling in some of our most prolific (gas) basins,” said Frank Fannon, assistant secretary in the energy bureau of the U.S. state department. “What this means in the near-term is that the United States may double production, double export capacity and introduce new market innovation,” he said at an industry conference in Singapore.
Fatih Birol, executive director of the International Energy Agency (IEA), said at the same event that the United States would become the “undisputed leader” of global oil and gas production. In oil, the United States crude production overtook that of Arabia earlier this year, recently hitting a record 11 million barrels per day (bpd), putting the United States within reach of top producer Russia.
Largely thanks to the U.S. increase, crude output from the world’s top 3 producers reached 33 million bpd for the first time in September, Refinitiv Eikon data showed. That’s an increase of 10 million bpd since the start of the decade and means that these three producers alone now meet a third of global crude demand.
In gas, the IEA’s Birol said the United States, together with Australia and Qatar would supply 60 percent of global liquefied natural gas (LNG) by 2023. The U.S. currently only has two LNG export projects operational, although several are waiting for financial approval.
More News On LNG.
Next-wave LNG race hits hurdles in U.S.-China trade war. The delay of a U.S. Gulf Coast liquefied natural gas (LNG) export project has crystallized fears that the U.S. trade battle with China is hampering efforts to line up buyers needed to move ahead with multi-billion-dollar builds.
The United States is positioning itself as the dominant provider of the supercooled fuel as Asian nations shift away from dirtier power sources like coal, and this month’s approval of a giant Canadian project led by Royal Dutch Shell bolstered enthusiasm for the sector overall in North America. That optimism took a hit on Monday, when Australia’s LNG Ltd delayed until next year a planned decision on whether to build its Louisiana-based Magnolia LNG plant due to problems lining up Chinese customers. And it comes when bankers and analysts in the sector had already questioned whether the next wave of projects in the pipeline would pass muster with investors.
“Chinese LNG demand growth is the largest piece of demand growth out there, and Chinese buyers have got to feel reluctant to commit to U.S. capacity when the U.S. government sees trade as a means of exerting political leverage,” said Bob Ineson, managing director of North American natural gas at IHS Markit. China set a 10 percent tariff on U.S. LNG imports last month, extending a trade scuffle in which U.S. President Donald Trump imposed tariffs on $250 billion worth of imported Chinese goods and China retaliated with duties on $110 billion worth of U.S. goods.
China’s LNG demand has skyrocketed in recent years on Beijing’s pollution crackdown, with imports nearly tripling since 2015. Last year it overtook South Korea as the world’s No. 2 importer of LNG.