The Lng Market Overview

In 2011, the United States produced 8.5 million cubic feet of natural gas, a value of nearly $36 billion, from shale gas alone. As a result, the U.S. is now the world’s top manufacturer of natural gas. Imported gases compose merely 8 percent of total natural gas consumption in the United States. Since America does not rely on imported gas, the United States has balanced it trade as the U.S. domestic supply has grown to meet its demand. Business magnate T. Boone Pickens stated, “Natural gas is the best transportation fuel. It is better than gasoline or diesel. It is cleaner, it is cheaper, and it is domestic. Natural gas is 97% domestic fuel.”

Natural gases are the most important source of energy in the modern world of technology and electricity production, which makes the skyrocketing gas production in the U.S. due to hydraulic fracturing incredibly valuable in terms of global trade and economy. The United States has always been reliant on the Middle East and other European and Asian countries for energy, but is very quickly becoming energy independent. "By 2020, the Energy Information Administration predicts that the USA will become a net exporter of natural gas", reaching energy independence from other countries and starting to export gas to provide revenue and pay off debts (Hassett and Mathur). Even

Central Idea: Gas prices are on the rise in the US recently because of three major factors: the price of crude oil, the increase in internal regulations, and the increased demand for the gas.

W hy does everyone care so much about natural gas? Why is it such an essential part of modern culture? Sure, it's an exciting and up and coming technology, which is fuel for the technological generation that we've grown up in, but we need to take a closer look to see the methods and impacts that could affect generations after us.

The Industrial Revolution created a society and energy consumption based on coal. However, in a more traditional society, natural gas has been obtained through oil drilling. While

The demand of gasoline has increased steadily over the last twenty years. In 1981 the U.S. averaged 6.5 million barrels of gasoline consumption per day. By comparison, in 2004 the U.S. averaged 9.2 million barrels of gasoline consumption per day. For most of this time period, gas prices stayed relatively the same. This is because the U.S. refineries increased their production to meet the demand and maintain the equilibrium price. Also during this same time period worldwide demand for crude oil increased 27%. Crude oil producers also increased their production to meet the demand keeping prices the same.

3. Liss, William. "Demand Outlook: A Golden Age of Natural Gas." Chemical Engineering Progress 108.8 (2012): 35-40. ProQuest.Web. Available at: <http://search.proquest.com/docview/1034899165?pq-origsite=summon>. Date accessed: 1 Nov. 2014.

As of 2015, US natural gas proved reserves totalled 324.3 tcfg. The US produces 28.8 mmcfg (million million cubic feet of gas) each year (4). With unrestricted drilling of new sites, totalling 723 tcfg, the US could significantly increase its natural gas production per year in the next 10-20 years (5).

It turns out that the market for natural gas is a very competitive one and that there is in fact a shortage in supply that is causing the price to increase. Natural gas must be drilled for and there are only a certain number of active companies that drill and they all have a set amount of capital. In the short run the supply of natural gas is very inelastic because they cannot just produce more gas. They would need

Obviously, oil and natural gas made up the two biggest items in both years. Together they comprised over half of the total percentage. Oil accounted for 42% in 1980, but this dropped slightly to 33% in 1990. A similar trend can be found in natural gas, which decreased by 1% to 25% in 1990.

The IEA expects global demand for natural gas to hit 4.75 trillion cubic meters by 2035. If we keep using natural gas how we do, we will have

Figure above shows the percentage of electric energy in the U.S. Over 50% of the energy is from coal. This year nuclear energy use was increasing; however, it creates radioactive. Natural gas will pollute the air and caused global warming. According to the National Oceanic and Atmospheric Administration, wind is the fastest growing energy resource. It increased by 46.6 percent by 2005.

Recent spike in US and Canada shale gas production have reduced the prices in the region to historical minimum of less than $4/MMBtu, a half of the price for Europe and five times less the price for China or Japan. This difference in prices has raised huge interest to export of LNG from USA to Asian market. Out of country’s total 11 LNG

There are two primary factors influenced the market of energy: population and economic output (Exxon Mobil, www.exxonmobil.com). According to International Energy Agency (International Energy Agency, www.oilmarket.org) global oil product demand will rise up from 84.5 mb/d in 2006 to 86.1 mb/d in 2007, and in forecast for 2030 will grow 1.8% per year. The world oil prices are forecasted to decline from $68 per barrel in 2006 to $49 per barrel in 2014, then rise to $59 per barrel in 2030 ($95 per barrel on a nominal basis). Total world liquids consumption rises to 118 million barrels per day in 2030.

World oil demand is increasing as emerging economies need more energy to increase their living standards. Estimates, shown below, are that by 2030, China and India as emerging markets will import over 70% to 90% of their fossil fuel needs (1) . Coupled to a continued high and growing demand for oil, makes this a robust market for the next 30 years.