LNG Bravo Sierra of Sierra Club – Watt?

Guest “Bravo Sierra!” David Middleton

In President Trump's inauguration speech, he promised to unlock the “liquid gold” under American feet and increase the production of fossil fuels. Doing so would lower gasoline prices and lead to cascading American wealth, he suggested. In an executive order declaring a “National Energy Emergency,” he directed the Department of Energy to resume processing LNG export authorization and prioritize the development of LNG in Alaska.

There is no actual “energy emergency” – at least in the sense of Trump. Under former President Joe Biden, the United States is already raising record oil and gas. A growing body of evidence suggests that Trump’s plan to maximize liquefied natural gas exports will actually achieve the opposite goal His established goal: Two reports in January show that increased U.S. LNG exports will drive Domestic natural gas prices, most of the liquefied natural gas profits are transferred overseas in the inventory of foreign investment companies, which is particularly beneficial to China.

LNG funds are handed over to foreign investors

The first report came from a private equity stakeholder project and found that part of the profits in LNG in the U.S. were handed over to foreign investment companies. The researchers found that 14 investment companies from eight foreign countries funded 11.5 billion cubic feet per day with U.S. LNG export capacity, accounting for about 78% of U.S. liquefied natural gas export capacity in 2023.

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Bravo Sierra Club

Note to Ms. Nolan: This is how private equity works. I don't have the time or tendency to verify exactly who funded who is currently under construction in seven operating LNG export facilities or five under construction. However, those who fund construction usually reap most of their profits until the financing notes are paid off. Regardless of the Bravo Sierra Club’s misconceptions, North America’s LNG export capacity will be more than twice as high during President Trump’s second term.

The vast majority of this export capacity will be along the U.S. Gulf Coast and will be exported to natural gas produced in oil and gas fields in the U.S. and U.S. Gulf. If LNG exports prompt prices to raise prices, that's already done.

From 1997 to 2012, the United States consumed more natural gas than we produced, with an average price of $4.76 per thousand cubic feet (MCF). Since 2013, we have generated more gas than we consumed, at a price of $3.35/mcf. If we take out the price at an unusually high price in 2022, the average is about $3.00/mcf.

The United States has the ability to become a net exporter of natural gas because we produce more than we consume. This can reduce the price. If LNG exports are restricted or prohibited, it will temporarily collapse gas prices. Drilling will be restricted, production will fall and prices will rise again.

What makes natural gas prices rise? It does not increase production or consumption.

Imported gas drives prices – Because we produce less than consumption when we consume, we are net importers.

But we will use up all our reserves!

U.S. crude oil and gas prove to be reserves, end of 2022

Using 2022's data | release date: April 29, 2024 | Next release date: April 2025

Petroleum highlights

• U.S. crude oil and leased condensate proved that reserves increased by 9% from 44.4 billion barrels to 48.3 billion barrels by the end of 2022 (Table 1).
• U.S. crude oil and leased condensate production grew 6% in 2022.
• In Texas, its reserves of crude oil and leased condensate have more reserves than any other state, proving that reserves have increased by 9% (1.7 billion barrels) in 2022 (1.7 billion barrels), the largest net increase in any state ( Table 6).
• In New Mexico, crude oil and leased condensate water proved to have risen by 26%, the second largest net increase (1.3 billion barrels). In North Dakota, proven reserves rose by 14%, the third largest increase (600 million barrels).
• Among the certified crude oil and leased condensate reserves in 2022, the largest net decrease was 13% (225 million barrels) (Table 6).
• The 12-month average spot price for West Texas Intermediate (WTI) crude oil in Cushing, Oklahoma, rose from $66.26 a barrel in 2021 to $94.54 a barrel in 2022, up from $94.54 a barrel in 2022 43%.

Natural gas highlights

• Proof of U.S. natural gas reserves grew 10%, from 625.4 TCF at the end of 2021 to 691.0 TCF at the end of 2022, setting up a new record of new gas proven reserves for the second consecutive year in the United States (Table 8).
• Natural gas reserves in Alaska increased by 25% in 2022, increasing the state's total from 99.8 TCF to 125.2 TCF, the largest growth in any state in 2022.
• Texas has the second largest increase in gas reserves in 2022 (21.2 TCF, or 14%), while New Mexico has the third largest increase in gas reserves (9.9 TCF, or 27%).
• The 12-month average spot price for the first day of gas in the Henry Hub in Louisiana increased 71% in 2022, from $367 UK Heat Units (MMBTU) per million in 2021 to $6.29 in 2022 /mmbtu, the highest annual average price since 2008.
• Operators in Pennsylvania reported the largest net decrease in natural gas reserves in 2022 (652 billion cubic feet, or 0.6%).
• In 2022, U.S. natural gas exports were 6.9 TCF, the highest volume on record.

Prove it is reserve It is the estimated amount of hydrocarbon resources, and analyzing geological and engineering data can prove that it is recyclable under existing economic and operational conditions. Reserve estimates change yearly:

• Price and cost changes
• New discoveries
• Comprehensive assessment of existing areas
• Existing reserve production
• New and improved technologies

To prepare this report, we collected independent estimates of proven reserves with Form EIA-23L from samples of U.S. operators of U.S. oil and gas fields. We use this sample to further estimate a portion of the proven reserves of operators that are not reported. This year, we received 397 responses from 404 sampling operators that provided about 90% of proven oil reserves, while at the national level, 93% of proven natural gas reserves. We develop estimates of reserves located in the United States, each state, individually and certain state districts. Countries and regions with partitions are:

• California
• Louisiana
• New Mexico
• Texas
• Federal Offshore Bay in Mexico

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