The US's record-breaking LNG export boom has created uncertainties in the global LNG market due to the potential of low-cost alternatives, oversaturation and a continued reliance on Russian gas.
The US became the world's largest exporter of LNG in 2020, setting a record.
After such a stellar year for U.S. LNG producers despite the months-long outage sat Freeport, which affected the total volume exported, it was only to be expected that the industry would have some serious capacity growth plans. Yet even before most of this new capacity begins to be built, concerns are surfacing from threats of low-carbon alternative energy sources and the very reliability of global LNG supply. that if all proposed LNG production facilities do get built, global capacity could surge by 67 percent to 636 million tons annually by 2030. This, Reuters reported, could lead to market saturation and drive prices down.
As for competition from low-carbon sources, this concern is easier to dismiss for the time being, seeing as costs for both wind and solar have increased substantially, casting a shadow over the assumption that they are and will always be the lowest-cost source of energy. Suffice it to say the United States and the European Union are now locked in a subsidy race that focuses heavily precisely on these two energy sources.
"It may be that the LNG terminals are not fully utilised. But you need them as an insurance premium," Markus Krebber told German media earlier this month, as quoted by Reuters. to Germany per contractual obligations, only not via the sabotaged Nord Stream but via Ukraine. That's despite assurances from German leaders that the country has now successfully weaned itself off Russian oil and gas.
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