Yves here. Keep in mind how disastrous underwhelming LNG output growth would be for the US and even more so for Europe. Europe is in such desperate shape that its leaders are focused on how to get through this winter, energy-wise, when unless they kiss and make up with Russia (vanishingly unlikely), Europe will suffer a massive, permanent reduction in its standard of living. There is not enough LNG available to make up for the energy shortfall, even before getting to the wee problem of insufficient tanker capacity and high cost.
And in the longer term, remember that shale gas wells have very short productive lives (or more accurately, high flow in the first couple of years, then a long tail of very low output). US shale gas output overall was forecast to peak in the early 2030s, slowly diminish over the decade, and fall more rapidly in the late 2030s.
By Charles Kennedy, a writer for OilPrice. Originally published at OilPrice
While American LNG is poised for long-term growth, next year could see a slowing of domestic natural gas demand due as infrastructure and expansion plans experience limitations, Natural Gas Intelligence reports, citing experts on the sidelines of a Gulf Coast energy forum.
Central for Liquefied Natural Gas (CLNG) executive director Charlie Riedl told NGI that while LNG dynamics are expected to accelerate this decade, buoyed by Russia’s invasion of Ukraine, facility and pipeline expansion will be “mission critical”, with a focus on connecting the Permian Basin and the Haynesville Basin to LNG export terminals.
Experts note that while new projects are underway, the timing will see a lag.
The Freeport LNG export facility continues to be out until at least early November after a fire in June. When it does restart, it would return some 2 billion cubic feet per day to the market. Aside from that, however, experts told NGI that no other expansions of export capability are on the books for two years, with Exxon’s Golden Pass LNG–in cooperation with QatarEnergy–not slated for initial startup until 2024.
Right now, the market is gearing up for a slight pause as LNG expansion catches up with the longer-term prospects here.
Speaking on the sidelines of the three-day forum, Easy Daley Analytics’ Rob Wilson told NGI that Gulf Coast LNG export capacity is set to increase gradually through 2025, but that slower near-term expansion growth could impact natural gas producers as new projects lag behind market dynamics.
“I think it will be March and April, when storage ramps up, and we see levels reach significantly above historical averages,” Wilson told NGI.
For 2023, Wilson predicts that while demand from Asia and Europe will continue to be high, U.S. natural gas producers will see lower prices as the market waits for demand to catch up with supply.
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in my neck of the wood natgas price probably will be $0.75 – $1.25 per therm this winter (10,000 BTU).
hit $1.20 in August. Versus 0.30 to 0.45 in early 2021.
These prices cause demand destruction whether in homes or industry.
and anger over last winter’s gas bills might even be enough to tip the scales in WI and PA.
one of my kid’s friends heads customer service for a propane company, last fall they got customers break down when calling about their propane bill. this winter will be no different.
I have to admit to being unsure about the last sentence where the author says ‘U.S. natural gas producers will see lower prices as the market waits for demand to catch up with supply.’ From my perch, there is far more demand than there is supply and in fact, old Joe I believe is limiting the amount of gas heading to Europe to try to keep US prices down because of the upcoming midterm elections in about a month’s time. And that gas that does go to Europe is being sold at a rate of four times what is being sold in the US itself. French Finance Minister Bruno Le Maire has complained that ‘it’s unacceptable that Washington “sells its liquefied natural gas at four times the price than it sets for its own industrialists,” adding that “the economic weakening of Europe is not in anyone’s interest. We must reach a more balanced economic relationship on the energy issue between our American partners and the European continent.” ‘ The destruction of the Baltic Sea pipelines now means that there is even less supply for the prevalent demand and that will not change anytime soon. Maybe I missed something then?
https://www.rt.com/business/564457-us-seeks-economic-domination-eu/
I may be wrong on this, but I think the quote from the French Finance Minister Le Marie conflates the cost of natural gas via pipelines with the cost of natural gas turned into LNG and shipped to Europe. And “Washington” doesn’t set the US price.
Re. limiting the amount of LNG going to Europe, rumor has it that the US is mulling an export ban to keep domestic prices low. F*** the EU indeed to quote Ms Nuland!
reading the same passage you cited, i can’t imagine any way that makes sense..
Given the already lackadaisical approach to safety in the fossil fuel industry in the US, I would not be surprised of hostile actors were considering “fires” similar to the one at the Freeport LNG export facility.
US pipelines will become ever more self-destructing for the foreseeable future. Trust a feller who’d rejected ~38 out-of-spec (client AND API 5L) repair welds only to have to recover all my texts, reports & emails when two 36″ joints failed in a very showy explosion six weeks after installation (and another ethane line blew right-the-fuck-up 60miles north of the first a few weeks later; attributable to “subsidence,” according to PHMSA!) Great, empirically knowledgeable and innately talented 3rd Party, Gas Company & mill QC/ NDE hands replaced by scared, indentured 1099 temps, frequency undocumented & servile, craven & mostly running from PO, deputies, IRS, repo-men, ex-spouses 1099 skip-tracers? Working in 4 Indian & 7 Russian oligarch owned mills; dying, disabled, sick or impoverished from PASC organ failure?
Well, dang. It looks like all the Russks have to do is wait for everything to decay.
Thing is, Constitution was some kick-ass pipe & I’m betting we’ll be fracking up into NY state & ALL over Allegheny County (for NYC’s conversion to gas apartment boilers, alone) before DNC™ LLC installs “Worse Than Trump” with a Congress, resembling a casting call for Justified! ACP had scary girth welds but does Warren Buffet still own Dominion & Duke’s pipelines? I’ve lost interest?
Even though we (Poland) have an LNG facility and now we have gas from Norway via new pipeline, I’m very happy that I have 2 years of firewood cut, stacked and dried. Also, happy that GasPol volunteered to top me up with propane (2000L) over the summer even though they normally wait until level drops to 20% in tank.
Unfortunately, I suspect a lot of green/wet wood will get burnt this year in Poland.