The war in Ukraine and the US gas business

"The use of hydraulic fracturing (fracking) in the United States, which began around 2008, has produced spectacular figures in the extraction of natural gas and, even more so, crude oil but in this article we focus only on the first of these fuels. From that date until 2024, natural gas production rose from 550 billion cubic meters to over one trillion, eliminating the long-standing U.S. trade deficit in 2014 and generating a surplus that grew to 206 billion cubic meters in 2024."

"Part of that surplus could be absorbed by increased exports via pipelines to the two neighboring countries, with sales to Mexico and, especially, Canada whose gas trade with the U.S. is substantial rising to 90 billion cubic meters in 2024. However, the bulk of the surplus had to find new markets. To this end, liquefaction plants were rapidly installed along the coasts of Louisiana and Texas to convert gaseous fuel into liquefied natural gas (LNG), which could then be transported by tanker over long distances."

"The drawback was that LNG prices were significantly higher than those for pipeline gas, as they had to incorporate both the cost of liquefaction and the subsequent regasification at the destination, plus maritime freight. Some of the LNG could be directed to Asian countries such as Japan, South Korea, and Taiwan, which had high domestic demand but limited domestic gas reserves, though they already had closer suppliers (Australia) and more established trading partners (Qatar)."

Hydraulic fracturing since 2008 boosted U.S. natural gas production from 550 billion cubic meters to over one trillion by 2024, creating a 206 billion cubic meter surplus. Pipeline exports to Mexico and Canada rose to 90 billion cubic meters in 2024, but most surplus required new markets. Coastal liquefaction plants in Louisiana and Texas converted gas to LNG for tanker shipment. LNG pricing included liquefaction, regasification, and maritime freight, making it costlier than pipeline gas. Major Asian buyers included Japan, South Korea, and Taiwan, with China and India increasing imports. Asian LNG sales reached 39 billion cubic meters and 15 billion to other regions, yet Europe emerged as a crucial target.

Read at english.elpais.com