Tom Shepstone
Shepstone Management Company, Inc.

There is no doubt it. Following decades of becoming more energy dependent on our enemies, natural gas is helping the U.S. to achieve energy independence.

The data is clear. The U.S. has achieved energy independence when it comes to natural gas and is well on the way to total energy independence. We are now consistently exporting more natural gas than we’re importing, despite New England and New York doing everything they can to make sure we have to import Russian LNG to keep snooty Bostonians warm.

Here, with emphasis added, is the latest from the Energy Information Administration (EIA):

EIA expects record-high dry U.S. natural gas production to continue to grow through 2020, from an estimated 83.3 billion cubic feet per day (Bcf/d) in 2018 to 90.2 Bcf/d in 2019 and 92.2 Bcf/d in 2020. Most U.S. production will come from the Appalachian Basin in the Northeast, followed by the Permian Basin in western Texas and eastern New Mexico and the Haynesville shale formation in eastern Texas. Factors supporting continued production growth include improved drilling efficiency and cost reductions in drilling and well completions, as well as increased takeaway capacity from the highly productive Appalachia and Permian production regions…

Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2019

EIA expects a net increase in U.S. natural gas use in the electric power sector between 2018 and 2020 as natural gas-fired plant additions continue to displace coal-fired generation. During 2019, natural gas planned capacity additions will total 7.5 gigawatts (GW) in the United States, and 4.5 GW of coal-fired capacity will be taken offline. Natural gas will continue as the primary source of U.S. electricity generation, increasing from 35% in 2018 to 37% in 2020. According to the STEO forecast, coal-fired electricity generation will fall from 28% in 2018 to 24% in 2020.

Natural gas consumption in the U.S. industrial sector will continue to grow, increasing 2% in 2019 and 1% in 2020. This growth will be supported by new methanol plants that use natural gas feedstock, and these plants are scheduled to come online in 2019 and 2020.

EIA anticipates that the United States will continue to export more natural gas than it imports during the coming years as production continues to outpace domestic consumption. Most of the increase in natural gas exports will come from additional liquefied natural gas (LNG) capacity additions at the Cameron LNG and Freeport LNG facilities located along the Gulf Coast, and the Elba Island LNG facility in Georgia. EIA expects LNG exports to increase from an estimated 3.0 Bcf/d in 2018 to 5.1 Bcf/d in 2019 and up to 6.8 Bcf/d in 2020, more than double 2018 levels.

Gross exports of natural gas by pipeline will continue to grow according to the STEO, increasing to 8.1 Bcf/d in 2019 and 8.4 Bcf/d in 2020, or 19% higher than 2018 levels. Most of the increase will be driven by increasing natural gas demand and pipeline projects in Mexico that are scheduled to come online by the end of 2020. Imports of LNG are expected to remain flat through 2020, and decreases in imports by pipeline will continue as Appalachian production and takeaway capacity displace Canadian natural gas in the U.S. Midwest markets.

It just doesn’t get much better than this. The shale revolution has made what seemed impossible just a few short years ago a reality; not only energy independence, but energy dominance. It has the U.S. king of the hill. It has also delivered declining emissions, revitalized rural communities and produced huge cost savings to urban consumers while savings an estimated 600 lives per year in New York City alone by cleaning the air for asthma sufferers. Hallelujah!