IEA says growth in production, as fracking opens up shale oil and gas deposits, will see US rival Russia and Norway.
The American shale gas revolution will enjoy a second wind as rapid growth in domestic production sees the US join the world’s club of top gas exporters, a leading energy authority has predicted.
Fracking has already opened up US shale oil and gas deposits, leading to a fall in gas prices and greenhouse gas emissions as power generation switches from coal to gas, as well as reducing America’s historical reliance on fossil fuel imports.
But an increase in US gas production over the next five years will cause another revolution as the country begins liquefying and shipping gas to Asia, Europe and the Middle East, the International Energy Agency said.
In a report published on Thursday, the IEA forecast the US would generate almost 40% of the rise in global gas output between 2016 and 2022. Come 2022, the US will produce more than a fifth of the world’s gas, putting it on the same level as top gas exporters such as Russia and Norway, the agency predicted.
“The US is already the largest gas producer in the world and will increase production more than any other country over the next five years,” said Keisuke Sadamori, director for energy markets and security at the IEA. “US gas production will grow by nearly 3% a year.”
More than half of that new production will be turned into liquefied natural gas for exports, he added.
Three major LNG terminals are being built on the Texas coast by Houston-based firms, at a cost of tens of billions of dollars, to export the gas.
Last weekend, the first shipment of US LNG import arrived in the UK, to provide around half of the country’s gas needs this summer. That came just weeks after the first US LNG shipment to central Europe, in a delivery to Poland, which is trying to reduce its reliance on Russian gas.
Although more exports of LNG to Europe are expected, the biggest demand is predicted to come from Asia. China is anticipated to account for 40% of global demand growth, driven by government policies to tackle the dangerous levels of air pollution in many cities, which is largely caused by coal power stations.
The sources of demand in those countries will also change, with industry taking over from the power sector as the “main engine of demand growth”. The IEA cited the examples of the growing use of gas in the chemicals sector and in fertilisers in India.
By 2022, the agency said the three giant LNG exporters would be the US, Australia and Qatar, the Gulf state undergoing a blockade that the IEA said served as “a reminder that security of gas supply cannot be taken for granted”.
Last month, a giant floating LNG vessel set off from a South Korean shipyard to work on Shell’s Prelude gas field off Western Australia, where production is expected to begin in 2018.