This week, droves of energy industry leaders are convening in Washington, D.C., for the World Gas Conference. Remarkably, the event marks the first time the conference will be held in a country known as both the largest producer and consumer of natural gas.
The last year has proven to be a watershed one as the U.S. became a net exporter of natural gas for the first time since 1957. Record increases in domestic energy production have proven a boon to the national economy and are upending traditional geopolitical paradigms as the U.S. emerges as a major player in global energy supply. More succinctly, whatever geopolitical proclivities a sovereignty may have, American energy seems to be a more attractive option thanks to its open market availability. This is turning the world’s energy power structure on its ear and is realigning the energy landscape in the U.S.
The Port of Corpus Christi undeniably reflects this shift as growth in U.S. energy exports booms. What’s driving this growth is the shale revolution, and Texas leads the nation in onshore energy production. And if the shale renaissance is the rocket, the repeal of the 40-year ban on exporting American crude oil is the rocket fuel. Exports have grown to nearly two million barrels per day with approximately 50 percent via the Port of Corpus Christi alone. Add natural gas liquids, liquefied petroleum gas, and refined products to the mix, and it is clear how the Port of Corpus Christi became a gateway for global energy trade.
Next year, we will be adding liquefied natural gas (LNG) to our exports mix when Cheniere’s Corpus Christi Liquefaction facility comes online.
The introduction of American natural gas to the global markets is a net positive, both domestically and internationally. LNG exports drive additional job-creating investments, including foreign direct investment, here at home. To our allies and trading partners around the world, American LNG ensures safer more reliable access to cleaner fuels.
Given American natural gas is cleaner by comparison to Russian gas (American natural gas produces roughly one-fifth the methane emissions of Russian gas), demand for it is expected to climb for U.S. trading partners if they are to reach their climate goals. Recently, Goldman Sachs reported the air quality in Beijing improved 41 percent relative to the historical trends as a result of China’s commitment to burn cleaner feedstocks in its power generation. China’s growing appetite for natural gas elevated it to the world’s second largest LNG consumer. Against this backdrop, Cheniere recently announced agreements with China National Petroleum Corporation providing China with 1.2 million tons of LNG each year.
The reliability of American natural gas is attractive for our allies. This is most explicitly seen in Eastern Europe where countries like Poland and Lithuania are turning to the U.S. for LNG as a way to abate potential political pressure from bad actors who use fuel as a weapon against the West. For the U.S., one facet of national security is ensuring our friends overseas can meet their fuel demand.
Exporting energy is also the only way to move the needle in reducing the ballooning trade deficit. The U.S. trade deficit with China alone was $375 billion of the total $568 billion in 2017. Secretary of Commerce Wilbur Ross recently carried a message to China that simply said, buy more American products. China’s growing appetite for natural gas and crude oil, coupled with American production increases, align perfectly for both countries to avoid an all-out trade war. Certainly, the facilitation of continued energy trade growth between us can only help not hurt efforts to ensure a healthy relationship.
Chairman, Port of Corpus Christi Commission
Charles Zahn currently serves as chairman of the Port of Corpus Christi Commission.