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US Natural Gas Exports—Revolutionizing the Future of Energy

For the first time in 60 years—in 2017—the US natural gas export was higher than its import. The US Energy Information Administration reports that this shift was due to the country’s rising gas production. This increase in natural gas production gave way to lesser gas imports from Canada.

The Bold Impact of the U.S. Helping its Neighbors Export More Natural Gas
The Bold Impact of the U.S. Helping its Neighbors Export More Natural Gas

This development has also increased US natural gas exports to other countries such as the Latin America—Mexico, Argentina and Chile—, Asia Pacific—China, South Korea and Japan—, and Europe—UK, Poland, and Portugal.

The Apparentness of the Phenomenon

This phenomenon brought about by US Natural Gas Exports shouldn’t come as a surprise. It’s true that the country’s natural gas resource is abundant.

In the Appalachia Region alone, natural gas production tips at 26.7 billion cubic feet per day. Likewise, the Permian Basin, an oil-rich region sitting on top of Texas and New Mexico, has been gleaning a lot of attention from investors.

With the discovery of new technologies in extracting natural gas, the incumbent administration has been working to set the country as a major player in the natural gas arena.

In truth, the effects of the natural gas boom have been fanning out to various sectors of the society. Experts have yet to ascertain the impact of this growth. However, as this industry gathers strength, several outcomes have already manifested.

US Natural Gas Exports and its Benefits

  • Environment

Natural gas emits 50-60 percent less carbon dioxide than coal. Truly, there is a mounting need for a cleaner source of energy. Thus, natural gas will likely play a significant role in the transition from coal to renewable energy sources—especially in reducing the world’s carbon footprint.

In the energy sector, companies have switched to natural gas. The U.S. Energy Information Administration attributes two-thirds of the emission reduction from 2006 to 2014 to the energy sector’s switch to natural gas.

  • US Economy

The natural gas industry readied the way for 3 million jobs. It has also contributed about $385 billion to the national economy yearly. Related industries such as steel manufacturing, chemicals, transportation and shipping industries are also set to feel the ripples of this economic shift. In 2012, the spending power of households was increased by $1,200. Thanks to lower energy costs, even households are feeling the positive developments.

  • Partner Countries

The effects go beyond economic and environmental developments. The advancements in natural gas resources have allowed the US to be a transformative partner to countries looking to switch from oil to natural gas. Mexico is an example. This neighboring country sits as the top natural gas export destination for the US. It has replaced a quarter of its energy sector gas consumption with natural gas.

  • Energy and Fuel Industry

For several decades, Qatar and Australia have been dominating the global natural gas production., With the emergence of the US as the third largest supplier of natural gas—according to Bloomberg—, a shift in the geopolitics of energy could very well be underway. By 2022, the US is predicted to stand side-by-side Qatar and Australia as one of the global leaders in natural gas production.

Consider the intensifying demand for natural gas from China and the rest of Asia. The US is ready and poised to respond to this huge demand. This potential has been drawing the interest of independent firms to invest in infrastructures and build Liquefied Natural Gas or LNG import facilities.

a chart that shows US Natural Gas Exports statistics

US Natural Gas Exports—Looking at its Bold Impact

The boom in US natural gas exports is not in full throttle yet. Nevertheless, it is making a definite bold impact in the energy arena.
Indeed, the development of relevant technologies and domestic consumption has leveled with gas production. With this fact, experts predict that the country will be energy-sufficient by the year 2020.

Indeed, low dependence on imported oil and fuel source results to lower energy costs. This outcome means additional cost savings for both the government and the consumers.

Economic Predictions and Other Repercussions

Economic opportunities abound too. This energy boom has ushered in millions of new jobs in 2012. Job predictions will reach up to 3.3 million, by 2020. Plus, there will be a boost in investments as well.

An IHS Markit study predicts that more than $120 billion in new capital investments will be allocated to expand the US petrochemical manufacturing capacity.

Predictions and estimates point to a 60 percent hike in the natural gas production in the next two decades. However, the downside to this growth could later be found in the air—literally. While studies show that natural gas emits more methane in the atmosphere, scientists are currently working on lowering methane emissions from natural gas systems.

US Natural Gas Exports—Looking at its Notable Future

Let’s look at this phenomenon unfold from a holistic, worldwide perspective. We can safely assume that the story doesn’t end where it is now. Whether this spirals to an adverse outcome or this blossoms to a positive payoff, US natural gas exports have made an impact in the world. They have undoubtedly opened doors for scientists, businessmen, and even countries for endless explorations in the field of renewable energy.

Conclusively, the US introduction to the natural gas revolution is a welcome development as the world blazes a new path for a coal-free future.

China Brings Crude Oil Import from the United States Back Again Cartoon

cartoon of a dragon burning a paper containing the tariff list while standing between Xi Jinping and Donald Trump, depcting the fact that the China oil import from the U.S. resumed after the tax policy change
China will be buying United States oil again in October. Is this scenario the start of a possible long-standing intimidation game between the two countries?

China Oil Import from U.S. Resumes After Tax Policy Change

China’s Unipec will resume purchasing US crude oil in October, following a two-month hiatus from trade disputes between the two economies. A few months ago, Beijing excluded crude oil in its tariff list. But in August, China changed its policy again, effectively including crude oil back in the list. Unipec will be buying oil again, and loading in October, which will then reach Chinese shores in November or December.

The Effect on China Oil Import

Prior to the trade dispute, China was the largest importer of US crude oil in 2018, surpassing Canada. It imported about 350,000 barrels of oil every day, according to the US Energy Information Administration.

China put crude oil in its tariff list as an act of retaliation to the United States. In June, Beijing announced that it is imposing a 25 percent tariff on crude oil sourced from the US.

Consequently, Unipec’s imports shrunk, and there were talks of purchasing oil from other countries like Qatar and Papua New Guinea. It is, however, estimated to return to normal as volumes increase over time. It was not disclosed how much oil it would be buying from the US. There were also reports that the October purchases were probably meant for third-party trading and might be sold to other countries.

Unipec is the trading arm of Sinopec, Asia’s biggest refiner. It is also one of the biggest customers of US oil. It lobbied for the exclusion of US oil in the tariff list. In August, the list no longer had the high tariff rates for US crude oil.

china oil import, US and China ships facing each other
Recent geopolitical developments are showing that the trade war may not be over yet.

Looming Trade War

It seems this goes beyond mere trade tiffs. President Donald Trump has been outspoken about suspicions he has about China’s trade and political practices. He has accused China of stealing tech and trade secrets from the US and taking millions of jobs from Americans, among many other issues. Because of this, the Trump administration sees China more as a competitor than a partner nation. In July it realized its threat to impose tariffs on $34 billion worth of Chinese products, including aircraft parts, televisions, and medical devices. Goods marked for tariffs have a 25 percent border tax as they enter the US. In effect, the US may be punishing China by making Chinese products extremely expensive for American businesses and consumers.

China then accused the US of initiating the largest trade war in history. As a response, China also imposed 25 percent tariffs on $34 billion worth of goods entering China. This includes automobiles and food, such as lobsters and soybeans. Trump further threatened to hit China with another multibillion-worth round of tariffs on Chinese goods.

On September 17, 2018, Trump announced tariffs on $200 billion worth of Chinese goods. This included a wide range of products, from minerals for manufacturing, electronics, and health and safety products. The previous tariff list concentrated mostly on industrial machinery, while the newest list exhaustively includes consumer products. All these goods require a 10 percent duty until the end of the year and will increase to 25 percent at the start of 2019.

Tense Consequences

The tug-of-war continued as China threatened to impose $60 billion worth of tariffs on US products. Should this happen, the Trump administration will respond with an extra $267 billion worth of imports. On September 24, 10 percent of tariffs on $200 billion worth of Chinese goods went into effect. Prior to this day, Chinese exporters rushed to bring their products to the US to beat the deadline. Beijing then accused Washington of “economic intimidation,” as the standoff between the two nations continued. The friction between the two economic giants is only growing, and it seems that there is no foreseeable end to the trade fight.

a chart showing US and China Trade Tariffs

World Trade on the Balance

China oil imports are just a small segment of a larger, undulating political landscape. While it is reassuring for China that they will be purchasing oil at a normal rate, this signals the start of a possible long-standing intimidation game between the US and China. The rest of the world is on the edge of their seats anticipating how these two countries will engage with each other in the coming months and years. Billions of spectators are hopeful that the US and China may forego its shifting trade relations, and instead energize the oil industry and the global economy.