US facing natural gas shortage due to record LNG exports to Europe
09/30/2022 / By Kevin Hughes
America’s domestic natural gas consumption is being threatened by record liquefied natural gas (LNG) exports to Europe. According to a study by Reuters, shale producers in the U.S. are struggling to address the rising demand for domestic and international natural gas.
Shale producers account for the bulk of U.S. natural gas output.
With the winter season fast approaching in both Europe and the U.S. and with a lot of people in both places using gas for heating, the price outlook for gas does not look good from a consumer’s perspective. A Reuters column noted that “U.S. gas prices are up by a whopping 300 percent from a few years ago when gas was cheap because it was abundant.” (Related: US headed for serious natural gas shortage and high prices this winter, experts warn.)
Sanctions on Russia have made it more difficult to acquire the natural gas necessary for Europe, with Germany suffering the most at this time. But if the U.S. sends too much natural gas there, then it could see itself in a similar situation pretty soon.
Meanwhile, natural gas prices in the U.S. dropped significantly after trade unions and railway companies reached a tentative deal that averted a potentially devastating strike.
Natural gas prices fell by nearly a dollar per million British thermal units (mmBtu), but inventories remain below the seasonal average and producers are beginning to struggle to meet demand, both at home and abroad.
Inventories remained the second-lowest for this time of the year for the last 12 years, the Reuters column noted. It added that there were no signs of improvement in the level of inventories despite the rise in prices.
This suggests higher prices for natural gas both in the U.S. and international markets.
America’s electricity generation to reach record levels this year
The Reuters column noted that electricity generation in the U.S. is seen reaching a record high this year, thanks to post-pandemic economic rebound and a hotter-than-normal summer. A cold winter would certainly push gas consumption even higher.
The lack of alternative sources of electricity generation, along with the retirement of coal plants and droughts in several parts of the nation that undermined hydropower capacity are also contributors to the high electricity demand.
And while this is occurring in America, the demand for gas remains strong worldwide as several nations seek to stock up on fuel for the coming winter. American energy companies are exporting LNG at record rates.
“We appreciate that the [Joe] Biden administration has been working with European allies to expand fuel exports to Europe, [but] a similar effort should be made for New England,” a group of governors from New England said in a letter to Energy Secretary Jennifer Granholm this summer.
The governors also called on the Biden administration to ensure there is enough LNG for American consumers, essentially asking the president to reduce LNG exports.
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More related stories:
Who is behind a series of “mysterious explosions” at natural gas facilities in the United States?
Natural gas shortages prompt power plants to switch to oil Natural gas shortage worsening in Europe and will trigger food crisis in coming months: Report.
Experts warn about monumental natural gas price surges as winter approaches.
Germany to nationalize struggling energy firm Uniper amid worsening financial crisis.
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Biden administration, chaos, economic rebound, electricity, electricity generation, energy supply, Europe, fuel shortage, fuel supply, gas prices, Germany, LNG, natural gas, panic, rationing, Russia, scarcity, shale producers, United States
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