Opinion

U.S. Liquefied Natural Gas Reshaping Energy Use in Asia

Natural gas was used in place of coal in many Chinese cities this winter, and air pollution has seen marked improvement. According to an estimate from Goldman Sachs Group Inc. analysts, air quality in Beijing improved 41 percent relative to the historical trend, meaning improved health and an important step forward in global efforts to reduce emissions.

Behind this reduction is natural gas produced over 7,000 miles away in the United States. Since the first cargo of U.S. liquefied natural gas was shipped just over two years ago, LNG exports are already having a profound impact on the global natural gas market.

While attention has deservedly been focused on the role U.S. LNG is playing in improving the energy security of our European allies and weakening Russia’s grip on the European gas market, an equally important story is unfolding in Asia. U.S. natural gas is helping to promote gasification programs in China and India, critically important to combatting traditional air pollution and reducing global carbon emissions.

The success the U.S. has had in reducing its own emissions through natural gas hasn’t gone unnoticed in Beijing and New Delhi. Thanks to the shale revolution, natural gas has become a leading fuel for electricity generation in the U.S; and as its use has grown, U.S. carbon emissions have plummeted. In fact, U.S. carbon emissions are now at a 25-year low, even as the size of the U.S. economy tripled during the same period.

An expanding LNG market is helping China and India follow suit. China leapfrogged South Korea this winter to become the world’s second largest LNG importer behind Japan. By some analyses, China could become the world’s largest importer by the close of this year.

India – where some cities have air pollution that is among the worst in the world – wants to follow suit, and New Delhi appears to be launching a gasification program to rival Beijing’s. India is planning on adding 11 LNG import terminals to the nation’s existing four.

GAIL India Ltd., the nation’s largest natural gas company, has already entered into two 20-year supply contracts with the Sabine Pass and Cove Point export facilities here in the U.S. On March 30, GAIL received its first U.S. LNG cargo under a long-term contract.

Secretary of Energy Rick Perry recently returned from India, where he helped launch the U.S.-India Strategic Energy Partnership and officially announced the creation of the U.S.-India natural gas taskforce, an effort aimed at building a thriving gas economy in India. Perry is helping promote U.S exports by assuring U.S. trade partners such as India that the U.S. is not only committed to helping shape the global natural gas market, but that we have the supply needed to meet rising demand.

The secretary is armed with a compelling story to tell. U.S. natural gas reserves continue to grow, and production is only rising. While demand for U.S. gas is on the upswing, U.S. natural gas prices remain attractively low to consumers. Our supply of gas – and the technological knowhow to produce even more at lower costs – continues to outpace demand.

As the world’s largest producer and a rapidly growing exporter, it is fair to say that the U.S. is firmly in a golden age of natural gas. It’s no coincidence, then, that for the first time in 30 years, the World Gas Conference will be hosted in a U.S. city – Washington, D.C. – this summer.

As experts inside and outside the industry, including policymakers, convene for natural gas’ premier event, it is our hope that both the progress and opportunity that natural gas signifies are made clear. For too long, LNG export projects have been embroiled in a regulatory quagmire, but the benefits they foretold are indeed delivering as promised. As developments in India and China attest, they are helping achieve global climate progress.

Now is the time to lean into policies that promote the production of U.S. natural gas, its use and the development of the infrastructure needed to move it to the consumers that need it. There are few better places to start than updating our LNG export permitting process to ensure we capture as much of the global market as we can.

 

Charlie Riedl is the vice president of the National Gas Supply Association and executive director for the Center for LNG.

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