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Forbes: U.S. Natural Gas Production Set New Record, But Don’t Expect Relief On Your Heating Bills [LNG Exports Link U.S. To High Prices]

By Robert Rapier, Senior Contributor

These excerpts from this article first appeared on Forbes.com September 25, 2022--

There was a time when what happened in the rest of the world didn’t impact the U.S. natural gas markets all that much. We consumed what we produced, and imported a bit.

Because the U.S. market was essentially isolated from the rest of the world, large price dislocations could occur.

But as natural gas production ramped up in the U.S., companies began to build liquefied natural gas (LNG) terminals.

Over the past decade, the U.S. became the world’s fastest-growing LNG exporter, and is on a pace to become the world’s largest LNG exporter this year.

The implications are that the global LNG market now impacts U.S. natural gas prices. And that market has been upended by Europe’s needs.

Russia is a major supplier of natural gas for Europe, but those gas exports have plummeted as a result of Russia’s invasion of Ukraine.

Thus, Europe is out trying to secure natural gas supplies for the winter.

American companies are exporting as much LNG as they can to Europe, and that is impacting U.S. prices in a way it wouldn’t have a decade ago.

That is a big part of why Americans are facing steep heating bills this winter.

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-- PA PUC: Cost Of Natural Gas Provided By Major Utilities In PA Increased As Much As 154% Over Last Year [PaEN]

NewsClips:

-- Reuters: Europe Races To Prepare For Energy Crunch This Winter; European Natural Gas Prices More Than Doubled From Start Of 2022

-- Bloomberg: Unrealistic Demands Hindering European LNG Natural Gas Deals: ‘If You Want A Cheap Price… The Answer Obviously Is ‘No’’