Last month, ExxonMobil and Qatar Petroleum announced that they will proceed with construction of the >$10 billion Golden Pass liquefied natural gas (LNG) export facility on the Texas Gulf Coast. This project would export up to 2.2 billion cubic feet per day (Bcf/d) of LNG and is just one of more than 50 LNG export projects to be approved by the U.S. Department of Energy (DOE). According to the DOE, since the startup of Cheniere Energy’s Sabine Pass LNG export terminal in February 2016, about 2 trillion cubic feet (Tcf) of domestically-produced LNG have been exported to 34 different countries. Cheniere Energy was the first major LNG exporter, but they were joined last year by Dominion Energy, which opened its Cove Point LNG export terminal.

This is just the tip of the iceberg, however, as the LNG export market is projected to surge over the next three decades. You can thank the shale boom for that.  LNG export growth is the latest example of how the U.S. shale boom has disrupted global oil and gas markets. Advances in hydraulic fracturing and horizontal drilling turned an expected natural gas deficit into a huge surplus.

Following years of stagnant production, U.S. natural gas grew 50% from 2005 to 2015 to reach 72 Bcf/d. In the process, the U.S. became the world’s largest natural gas producer, with 20 percent of the global production share.  This surge of production kept U.S. natural gas prices in check. Natural gas spot prices that had regularly spiked above $10/MMBtu fell below that level in 2008, and since 2010 have only been above $5/MMBtu during brief cold weather events.

Natural gas demand has kept pace.  Natural gas exports to Mexico have now exceeded 5 Bcf/d, equal to about 7 percent of U.S. daily production. Consumption by the electric power sector increased by nearly 50 percent from 2005 to 2016, reaching 27 Bcf/d. Industrial demand has also increased by 30 percent as some manufacturing relocated to the U.S. to take advantage of low gas prices.