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1 1 (May 4, 2018)

handle is hein.crs/govzgj0001 and id is 1 raw text is: Cogesoa Resarc Seric May 4, 2018 U.S. LNG Trade Rising, But No Domestic Shipping As U.S. natural gas production sets new records, trade in liquefied natural gas (LNG) has risen sharply. Since 2016, when the first plant in the lower 48 states to cool gas to minus 260oF for export opened in Louisiana, the United States has exported LNG by ship to 27 countries. The inauguration of a second liquefaction facility in Lusby, MD, in April 2018, portends a further increase in LNG exports. Yet despite abundant gas supplies and a growing volume of LNG exports, the United States continues to import LNG as well. Imports, including the January arrival of a shipment containing Russian gas to Boston, persist in part because there is negligible domestic trade in LNG. The lack of U.S.- built LNG tankers, a legal requirement in order to move LNG domestically by sea, may be encouraging the use of imported rather than domestic gas in some locations. LNG Export Expansion In 2017, the United States became a net exporter of natural gas for the first time since 1957, according to the U.S. Energy Information Administration (EIA). Total exports, pipeline and LNG, were 8.7 billion cubic feet per day (BCF/D), or 12% of production. Most of these exports (78%) move to Mexico and Canada by pipeline. Exports by ship require that the gas be liquefied, which in turn necessitates construction of extremely expensive liquefaction plants. Most U.S. LNG exports, so far, have gone to Mexico, South Korea, and China. Alongside the Louisiana facility and the new facility in Maryland, three other LNG export facilities may begin operations in 2018, with a combined capacity of 4.62 (BCF/D (Table 1)). If these open on schedule, U.S. export capacity could be more than 8 BCF/D of LNG. All told, exports are likely to absorb 11% of U.S. gas production by year end. Additional facilities under development could enable the United States to supplant Australia and Qatar as the top LNG exporter within a few years. Table I. Aggregate Status of U.S. LNG Export Facilities Combined Capacity Stage (BCFID) Status Operating 3.54 Exporting Under Construction 4.62 Due online 2018 3.54 Online post-2018 Small Scale 0.28 DOE Approved Permitted, but Not 6.79 DOE and FERC Under Construction approved Proposed 38.14 Permits pending Sources: Estimated by CRS based on Department of Energy (DOE) and Federal Energy Regulatory Commission (FERC) information. See https://www.energy.gov/sites/prod/files/20 I8/04/f50/Summary%2Oof% 20LNG%2OExport%2OApplicationsO.pdf, and https://www.ferc.gov/ industries/gas.asp. Notes: LNG projects in Alaska are not included in this table as they are subject to different market conditions. The table includes small quantities of LNG exported in shipping containers by American LNG Marketing, mainly to the Bahamas and Barbados. Capacity data are mainly from DOE, which may differ from FERC data, and in some cases are rounded. LNG Imports: Key for New England U.S. natural gas imports by pipeline and LNG were 8.3 BCF/D (12% of U.S. consumption) in 2017. Although almost all U.S. natural gas imports (97%) come by pipeline, LNG remains an important source of supply for the Boston area, which is not adequately served by transmission pipelines from gas-producing areas. The Everett LNG Terminal, which is the only facility in the continental United States receiving regular LNG cargoes, imports almost all its LNG from Trinidad and Tobago. Once unloaded, the LNG is regasified and put into the gas distribution system. Despite importing relatively small amounts of natural gas compared to overall U.S. consumption, the Everett LNG import terminal and its owner, the French energy group Engie, caused a controversy earlier this year when it reportedly imported an LNG cargo containing at least some natural gas from Russia's Yamal LNG project. Yamal LNG is primarily owned by the Russian energy company Novatek, which is subject to U.S. sanctions, although natural gas shipments are not. The United States has never before imported natural gas from Russia, and the shipment raised the question of why all domestically produced natural gas, shipped either by pipeline or as LNG, was not used. Natural gas pipelines into New England have faced challenges. Opposition groups have been effective in blocking or delaying the permitting of pipelines that would bring additional volumes of natural gas into New England, or which would generally increase gas transportation capacity in the Northeast market. The main arguments against these pipeline projects include opposition to the extraction and burning of fossil fuels due to climate change concerns, possible water contamination from hydraulic fracturing, overdependence on one fuel for electric power generation, and local construction impacts. There is currently less opposition to the import of LNG. The Everett LNG import terminal has been operating since 1971. It supplies about 20% of the regional market demand https:/crsreports.congress go 0

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