Record LNG Exports to Europe Reportedly Threaten US Domestic Gas Consumption
Shale producers in the United States are struggling to meet growing domestic and international demand for natural gas, according to an analysis.
The report concluded that a hotter-than-expected summer and a lack of alternative energy sources have left the nation’s inventories below the seasonal average. He added that there were no signs of improvement in the level of inventories, despite the rise in gasoline prices.
The latest data showed the Permian Shale Basin, which contributes about 12% of total US gas production, and the number of rigs in the Permian has been down for two weeks in a row. “Less drilling means less associated gas to add to the national total”, reported the media.
While US energy companies have been exporting liquefied natural gas (LNG) to Europe at record rates, there have been calls of late to cut those supplies to ensure there is enough for the US market.
“With the heating season just around the corner in both Europe and the US and with many people in both places using gas for heating, the outlook for gas prices does not look good from a consumer perspective.”
The report noted that US gasoline prices are unlikely to rise anywhere near European levels, “But they have increased 300% compared to a few years ago, when gasoline was cheap because it was plentiful.”