|Fig. 1: Blue flame from a gas stove (Source: Wikimedia Commons)|
According to the International Energy Agency (IEA), power generation from renewable sources like wind, solar, and hydro reached nearly 22% of global generation in 2013, on par with generation from gas.  In their Medium-Term Renewable Energy Market Report, the IEA sees this generation rising to almost 26% of global electricity generation by 2020, but the slowing of growth seen after 2014 puts renewables in danger of failing to meet global climate change objectives.  Uncertainty over policy and regulatory support for the implementation of renewables, along with market risks are threatening to slow their momentum while leaving open the question of just how global energy demands will be met in the future.  Lower emissions of greenhouse gases relative to other non-renewable options, as well as recent improvements in extraction technology have thrust natural gas into the picture in terms of meeting the growing global demand. 
The United States is at the forefront of the rise of natural gas, with hydraulic fracturing (fracking) and horizontal drilling allowing for access to vast quantities of natural gas and tight oil that was recently inaccessible.  This tight oil boom has rapidly changed the US's role in the global energy market, and looks to have an impact for the coming years. Unconventional gas made up 60% of marketed production in the United States by 2011, and has continued to grow in the years since.  Crude oil production in the US has increased since 2008, reversing the trend that began in 1986.  US crude oil production increased to 6.5 million barrels per day in 2012, and has reached the level of 9 million barrels per day in November 2014. [3,4]
The swift increase in production has been buoyed by aforementioned improvements in production technologies, and is matched by an ever decreasing net import share.  The net import share of US petroleum has decreased every year since 2005, and the US Energy Information Administration (EIA) stated in its 2013 Annual Energy Outlook that this could lead to the US becoming a net exporter of liquid fuels in the near future.  The EIA projects US dry natural gas production to increase 1.3 percent per year, growing to 3.6 trillion cubic feet in 2040 and outpacing domestic consumption by 2019. Also, they projected increased US exports of domestically sourced liquified natural gas (LNG), with one half of US exports of LNG coming from the Lower 48 states and the other from Alaska.  However, in November of 2014 the US Department of Energy gave approvals to Texas based Freeport LNG Development LP to export LNG to any country.  The planned project would have the capacity to export up to 1.8 billion cubic feet per day of LNG, indicating an even larger US energy role than previously anticipated. 
The US growth in energy and specifically natural gas production will have ramifications in future politics. In the next several years, the European Union could be importing US gas, lessening Russia's dominance of this area of the European economy.  The boom in exporting LNG will feed into Asian markets, and will inevitably change the political relationship between the US and China. 
At the same time, there are major economic implications of the US's new role as an exporter. US crude oil production could reach as high as 14 million barrels per day in 2020, reducing imports and spurring exports.  Additionally, the US oil/gas trade balance could go from a deficit of $354 billion in 2011 to breakeven by 2018, and a surplus of over $80 billion in 2020, according to the EIA.  Furthermore, a 30% drop in oil prices since the summer of 2014 has been a direct result of US production growth, but lower oil prices could be contrary to US preferences in the near future, as exporters prefer higher world energy prices.  Now, the US no longer looks at gas prices purely from a consumers perspective. As its role expands towards that of an energy superpower in terms of supply, it will be worth monitoring just how the US reconciles its new capacity for production with the economic implications.
© Colin Epperson. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
 "Medium-Term Renewable Energy Market Report 2014, Executive Summary," International Energy Agency, 2014.
 "Special Report: Are We Entering A Golden Age of Gas?" International Energy Agency, June 2011.
 P. Domm, "US Energy Is Growing - and so Is US 'Power'," CNBC, 25 Nov 14.
 "Annual Energy Outlook 2013," US Information Administration, DOE/EIA-0383(2013), April 2013.
 T. Gardner, "U.S. Gives Final Approvals to Freeport for LNG Exports," Reuters, 14 Nov 14.