From Reader Kern.. TY!!

***********************************************

Competition is the King!
Kern

Snip
Anna Mikulska, Rice University

(THE CONVERSATION) President Donald Trump complained during recent NATO meetings and through Twitter about how, in his opinion, Germany is “captive to Russia” because of that country’s reliance on Russian energy, especially natural gas.

This grievance may seem odd, given Trump’s often warm comments regarding Russian leader Vladimir Putin. But it makes sense in light of how Trump keeps insisting that the U.S. and Russia are “competitors” rather than adversaries.

Snip
US natural gas exports

Because of the spread of hydraulic fracturing and the directional drilling of shale rock formations, commonly called “fracking,” the U.S. is now the world’s top natural gas producer.

Abundant natural gas has not only kept prices historically low for U.S. consumers as more of the country’s electricity has been generated with natural gas, it has also made it possible for the nation to export more natural gas than it buys from other countries. That is what happened in 2017 for the first time in 60 years.

In addition to selling natural gas to Mexico and Canada, which gets transported by pipeline, the U.S. is now exporting liquefied natural gas, commonly called LNG.

Only two LNG facilities – one in Louisiana and one in Maryland – are operating today in the U.S., with total capacity of about 5 billion cubic feet per day. But at least four more are on the way and a shuttered plant in Alaska could be revived soon. Additional U.S. LNG capacity of up to 25 billion cubic feet per day could become available before long, depending on how many of the many LNG terminals being considered are ultimately built.

As American production and its capacity to liquify natural gas grows, the U.S. government’s Energy Information Administration is forecasting that China and other Asian countries will buy most of this fuel due to their swift economic growth and their efforts to slash pollution.

But surely European countries will buy some of America’s exported LNG, reducing Russia’s dominance of that market.

Russia’s European dominance

In recent years, Europe has imported about 20 percent of the natural gas it consumes, mostly from Russia and Norway.

Even as the region began to import liquified natural gas from the U.S., Europe’s Russian gas imports hit record highs in 2017. Demand was higher than usual thanks to the region’s economic recovery and extremely cold winter.

Several factors buttress Russia’s dominance of this market. First, many countries have signed long-term contracts, locking in their purchases of Russian gas for years to come.

Second, Russia can produce natural gas very cheaply and it costs little to bring it to Europe using pipelines, many of which have already been built. In contrast, U.S. producers spend money liquefying natural gas – even if it costs relatively little to drill – and ship it across the Atlantic Ocean. As a result, the price of the gas when it lands in Europe is more than double the price in the U.S.

U.S. LNG currently costs about US$6 per million British Thermal Units in Europe, about $1 more than the average price of Russian gas in that market.