The energy market has always been shaped by the dynamics of supply and demand, as well as geopolitical and macroeconomic influences. Recently, a significant shift has occurred, transforming the market with the rise of the United States as a global energy superpower. This status is not granted lightly but earned, and the US has achieved it impressively. By the beginning of the year, the US became the world’s largest producer of both oil and natural gas, the top exporter of liquefied natural gas (LNG), and the third-largest exporter of oil.
This achievement is remarkable, especially considering that US oil production hit a 62-year low in 2008, and the country only became a net oil exporter in 2019. Entering the global LNG market in 2016, the US quickly surpassed Qatar and Australia to lead the field by the end of 2023. The shale revolution, driven by human ingenuity and private enterprise, underpinned this success. By the fourth quarter of 2023, US total liquids production reached 21.4 million barrels per day, including 13.3 million barrels of crude and condensate, with the rest from natural gas liquids and biofuels.
US LNG exports, according to data from LSEG and Bloomberg, now range between 88 to 91 million metric tons. Beyond traditional energy sources, the US also boasts the second-highest renewable energy capacity globally, nearly 400GW in 2023, along with approximately 100GW of nuclear capacity. Houston, America’s energy capital, is central to this energy dominance and is likened to the “Silicon Valley of Energy” by Microsoft co-founder Bill Gates. Billions of dollars are being invested in cleantech ventures and innovation projects in Texas, particularly around Houston. Texas and Louisiana are home to nearly 20 LNG export terminals in various stages of operation, construction, or proposal.
Gastech, a major industry event, will be held in Houston from September 17-20, featuring discussions on cleantech, artificial intelligence, hydrogen, and natural gas. The event will highlight the profound changes the US has brought about in production, technological advancements, and geopolitical impacts. The transformation of the US from the world’s largest energy importer to a leading exporter has altered risk premiums in oil and gas markets. The Russia-Ukraine war demonstrated this shift, with European countries increasing their imports of US LNG, reducing reliance on Russian gas. US light crude exports have also helped stabilise global oil prices.
US export terminals, initially designed as import facilities in 2008, are now viewed as lucrative investment opportunities by global energy giants like Aramco and ADNOC. The opportunities extend beyond traditional and renewable energy. Despite complex domestic politics, the US is fostering clean energy and efficiency technology startups, boosted by the 2022 Inflation Reduction Act. This progress in clean energy is expected to continue, regardless of future political changes, solidifying the US’s role in the global energy transition for years to come.
The ascendance of the US in the global energy market signifies a profound transformation, showcasing the nation’s ability to innovate and lead in both traditional and renewable energy sectors. This shift is likely to have lasting impacts on global energy dynamics, reinforcing the US’s position as a pivotal player in the energy landscape.
Diversified Energy Company plc (LON:DEC) is an independent energy company engaged in the production, marketing, transportation and retirement of primarily natural gas and natural gas liquids related to its U.S. onshore upstream and midstream assets.
