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INTERVIEW-U.S. brings forward gas self-sufficiency forecast

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LONDON | Wed Nov 14, 2012 12:24am IST

LONDON Nov 13 (Reuters) - The United States is bringing forward by several years the date at which it expects to become a net exporter of natural gas, the country's top energy adviser said on Tuesday in the latest boost for the government's energy independence agenda.

The U.S. Energy Information Administration (EIA) 2012 Annual Energy Outlook (AEO) published this summer said exports would overtake imports in 2022. A revision due out in a few weeks will bring that date forward to the "late teens" of the century - as little as four or five years from now, EIA Administrator Adam Sieminski told Reuters in an interview.

He cited continued "robust" domestic production - despite the low prices that are causing pain to many domestic producers. Lower pipeline imports from Canada, a further slowing of liquefied natural gas (LNG) imports, and full export capacity at the country's only licensed LNG export terminal at Sabine Pass in Louisiana complete the picture.

"The AEO 2013 reference case is going to be published in December and that is going to move that 2022 date in. It'll be in the late teens. So the U.S. is going to be a net exporter sooner than 2022," he said.

Cheniere Energy's Sabine Pass will not be ready to export until 2016, and there is political opposition to plans for further LNG export terminals. Most of the 11 proposed are, like Sabine Pass, refitted former import facilities that were left high and dry by the United States' shale gas revolution.

Opposition to more licences is mainly based on fears that exports could deprive the country of the competitive advantage bestowed on it by cheap gas, but Sieminski said "this (the new prediction) doesn't require another string of export terminals to be approved".

TURNAROUND

There has been a dramatic turnaround in the U.S. natural gas market, which four years ago was still gearing up to be a major importer.

Record increases in domestic gas output thanks to hydraulic fracturing ("fracking") and horizontal drilling of shale formations and other so-called "unconventional" gas resources have pushed prices way below global levels and evaporated import needs. ID:nL1E8LOCPN]

Those new techniques now deliver far cheaper supplies into the home market and have pushed U.S. gas production to record highs.

An earlier date for self-sufficiency and the prospect of cheap U.S. LNG exports on the world market will also send a shiver down the spine of companies that have invested heavily in LNG export facilities in other parts of the world.

Much of the LNG gas now coming onstream that was originally earmarked for the United States has been mopped up by burgeoning Asia demand. But by the end of the decade, when the U.S. could become an exporter, more LNG from projects being built outside the country now will be coming onto the global market.

Sieminski was speaking just a day after International Energy Agency (IEA) said the same fracking and horizontal drilling techniques being applied to crude oil would allow the United States to overtake Saudi Arabia and Russia as the world's top oil producer by 2017 and become almost self sufficient in liquid energy (mostly crude oil) by 2035.

He said that prediction was "a bit of a stretch" but noted that by that date as little as 15 percent of U.S. petroleum consumption could be dependent on imports anyway.

"That's less than 3 million barrels a day, and almost all of that would be coming from Canada, and so if you included Mexico in this you'd have North American oil independence even sooner," he said on the sidelines of the Oil and Money Conference in London. (Additional reporting by Ed McAllister in New York; Editing by Anthony Barker)

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