The gas revolution in the United States
A genuine gas revolution is under way in US energy, marking a shift to a new technological order in the economy — one in which natural gas is becoming America's main primary energy source.
The gas revolution in the United States
In recent years a genuine gas revolution has been under way in US energy, marking a shift to a new technological order in the economy. According to the US Energy Information Administration (EIA), the amount of primary energy the United States consumes from gas has almost caught up with oil. The point is that oil has been the most important energy resource for the US economy since the beginning of the 20th century, and it is because of oil that the country has fought wars in oil-rich regions of the world. The US economy is built on oil.
The gas revolution in the United States
However, the current state of US energy shows that the country has begun to place its main emphasis on using gas as a primary energy source in order to ensure energy security and diversification. This means the United States has started building more and more gas-fired thermal power plants, replacing coal-fired ones, and rapidly developing its gas industry — opening new gas fields, building new gas processing plants, pipelines, gas storage facilities and liquefaction terminals to export LNG to Europe, and other gas-related infrastructure.
In addition, when natural gas prices are quoted on the American market, gas volume is measured in a special unit: 1 million BTU (British thermal unit). The spot price of gas at Henry Hub in Louisiana, the largest US gas hub, is now $2.828 per million British thermal units (MMBtu), which works out at $101.3 per 1,000 m³. In Europe, by contrast, the gas price at the TTF hub in the Netherlands works out at $471.9 per 1,000 m³ — almost five times the US price. That is a powerful incentive for US economic growth. Of course, it is important to understand that spot prices in the US and European (Dutch) markets are the bare cost, excluding liquefaction, transport and regasification, and the price end consumers pay will be higher still.
US gas production is forecast at about 1.1 trillion cubic metres in 2024, almost twice Russia’s output of 668.2 billion cubic metres in the same year. The United States has also nearly met its own oil needs, producing 12.9 million barrels a day. In this connection, US energy policy deserves credit for preparing the country for Europe’s energy crisis. With such a large gap in gas prices, European corporations will be unable to compete with American companies, so more and more German and other European firms are moving their production to the United States. Honestly, the prosperity of the German economy was built on cheap Russian gas. To be sure, the gas Russia supplies to Europe through other pipelines (beyond Nord Stream 1 and 2) costs more than US gas, but even so it carries a significant premium over the American gas that Europe buys.
That is why the United States has paid close attention to developing its gas industry in recent years, and the fruits of that policy amount to a serious advantage in economic warfare. Natural gas is becoming the main primary energy source in the US energy system. Gas is also becoming an important element of US foreign policy and of the promotion of American geopolitical interests around the world.