U.S. becomes natural gas exporter for the first time in nearly 60 years

In November, the United States became a net exporter of natural gas for the first time since 1957, based on data from Point Logic Energy, but the rise in exports wasn’t enough to stave off a decline in natural gas production as the number of active drilling rigs continued to fall.

The increase in exports “was supported by infrastructure improvements — including natural gas pipelines and facilities for liquefying natural gas for export — that enabled suppliers to meet increasing demand from foreign markets,” according to U.S. Energy Information Administration. Pipeline exports to Mexico grew last year and accounted for 87% of all U.S. natural gas exports. In May, the Sabine Pass liquefaction terminal opened in the Gulf Coast and started exporting liquefied natural gas (LNG). In July 2016, the Panama Canal expansion increased “export ability by reducing time and transportation costs to key markets in Asia and the west coast of South America.”

But while demand for exports and electricity generation rose in 2016, natural gas production fell for the first time in 11 years as a result of low demand for space heating and low prices. Production fell 1.3 billion cubic feet per day to 77.5 billion cubic feet per day, from 2015, “the first annual decline since 2005,” according to EIA. “The number of active natural gas drill rigs continued a multi-year decline, reaching 132 by the end of 2016, down 19% from the year-ago count. However, production has not fallen as sharply as the number of active rigs, as producers have continued to make gains in drilling efficiency.”