America’s LNG growing pains
DEEP DIVE: Manufacturers are howling at expensive gas. Activists clamour to ‘leave it in the ground’. Yet soaring exports seem unstoppable
Cheap, abundant natural gas has become the bedrock of the American economy – but the drillers that produce it are sitting on their hands, even as prices rise. Manufacturers are getting twitchy, calling for liquefied natural gas exports to be capped. This is unlikely for many reasons, meaning US consumers might have to get used to higher bills. This could be good news for both coal and renewables – unless jaded investors forgive the US shale sector’s sins. In any case, the US isn’t quite ready to keep its gas for itself.
Liquefied natural gas is giving America a taste of the true value of a precious energy resource that it has for too long squandered at the wellhead. Surging US LNG exports jacked up prices to levels not seen since the fracking boom flooded the domestic market with cheap gas in the early 2010s.
Futures on US gas benchmark Henry Hub are trading at more than $6 per million British thermal units (MMBtu) for delivery in December and January. That’s more than double the year-a…