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Natural gas can be exported throughout the world and the US is quickly becoming a major exporter. Image Credit: Quiltsalad
The natural gas boom has not only made the United States less dependent upon other nations for its energy but also looks set to transform the country into a major energy exporter.
Economist Nathaniel Karp of bank holding company BBVA Compass has predicted that it could make the United States a leading energy exporting nation.
There are a host of different benefits to the US exporting natural gas. It will help trade imbalances, improve relations with other countries and provide fuel to places where it is currently rare and expensive.
Demand for Natural Gas Increasing
It is believed that exporting liquefied natural gas could inject fifty billion dollars into the US economy throughout the course of the next seven years.
There are currently restrictions in place on exporting liquefied natural gas. However pressure is mounting for them to be lifted.
Global natural gas demand has been rapidly increasing. The International Energy Agency has predicted that it will continue to rise by fifty percent throughout the next two decades. This means that US companies could boost their profits tremendously by exporting this commodity.
Improving National Security
A study carried out by the American Security Project indicates that exporting natural gas could be beneficial to US national security.
One of the reasons for this is that a more diverse range of natural gas sources could potentially reframe tenuous geopolitical relationships related to energy supplies. This would help to improve global stability.
US natural gas exports could also increase the effects of sanctions against Iran that were imposed due to its nuclear program. Turkey is currently dependent upon Iran for a fifth of its imports of natural gas but if new natural gas import sources become available, this would no longer be the case and Iran would suffer financially as a result.
Exporting to Japan
It is believed that exporting natural gas to energy-hungry allies like South Korea and Japan could help to strengthen America’s diplomatic relationship with these nations.
Japan stands out as a country to export to, as the Fukushima Daiichi disaster led to the closure of nearly all its reactors. Providing it with natural gas would be a good way of helping out an ally whilst earning a profit in the process.
Stimulating Domestic Exploration and Production
It is clear that there are a variety of different benefits to exporting natural gas, as doing so could strengthen diplomatic relationships, increase national security and significantly improve the US economy.
International natural gas prices are up to quadruple those of America, meaning that considerable profits could be generated from exporting to these markets.
Natural gas production has provided a major boost to America’s financial situation. Exporting it could mean that it injects even more money into the nation.
The Heritage Foundation think tank predicts that exporting this commodity will stimulate further domestic exploration and production, leading to industry growth.
In summary, the exportation of natural gas is likely to be advantageous for drilling companies, investors, and the United States as a whole.
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