Energy

New Deal Allows US To Sell Tons Of Natural Gas To China

REUTERS/Shannon Stapleton

Daily Caller News Foundation logo
Andrew Follett Energy and Science Reporter
Font Size:

The U.S. and China recently agreed to a major liquid natural gas (LNG) trade deal, which could generate $26 billion annually for America.

The Department of Commerce announced a 100-day action plan to allow Chinese companies to negotiate long-term contracts from American suppliers. The energy firm Wood Mackenzie estimates this deal could pump $26 billion into the U.S. economy each year by 2030.

“This is good news for US energy exports in the future, but it is only the first step,” Richard Kauzlarich, former U.S. ambassador to Azerbaijan and Bosnia and a professor at George Mason University, told The Daily Caller News Foundation. “First, LNG exports will require long-term contracts with U.S. producers/exporters. The Chinese have proven to be tough bargainers in the energy area – ask the Russians.”

China’s dramatic economic growth over the last decade has fueled its lust for oil and LNG. Rising demand has long surpassed Chinese energy production capabilities. As China’s need for oil and LNG imports rises, its dependence on the U.S. hydraulic fracturing, or fracking, boom has increased.

“I am not shocked that China, an emerging U.S. rival in Asia and indeed throughout the world, would turn to Washington for more and more LNG, and more broadly, more natural resources,” Harry J. Kazianis, director of defense studies at the Center for the National Interest, told TheDCNF. “Chinese officials have told me time and time again that they need to diversify where they get their energy from. They fear being overly dependent on any one source, or even any one continent, for their natural resource needs.”

China is now the largest foreign buyer of U.S. oil, according to new data from the U.S. Energy Information Administration. U.S. crude oil exports in February jumped 35 percent as China started buying American oil. The country surpassed the U.S. as the world’s largest net importer of petroleum in 2013.

“Second, is U.S. gas infrastructure (pipelines and export facilities including gas liquefaction capacity) adequate to handle significant exports to China?” Kauzlarich asked. “US pipeline infrastructure needs both modernization of existing facilities and new investment to realize the potential for US gas exports.”

China is expected to buy roughly 70 percent of its oil from foreign sources over the next few decades, largely from unstable parts of the world.

“In fact, in the months and years to come, I can see Beijing purchasing more and more U.S. natural resources — and that is a good thing for U.S. suppliers too, in that Washington also should have diversified purchases from around the globe,” Kazianis said. “It is a win win for everyone and a reason for America and China to find common ground on strategic issues that divide them.”

Sudan provides seven percent of China’s oil imports and over one-third of Chinese oil imports come from sub-Saharan Africa. Some of China’s largest oil suppliers — Angola, Sudan, Nigeria, and Equatorial Guinea — are known for political instability.

“Bottom line: the potential is there for significant LNG exports in the future but … will the Chinese pay the right price for the US producers/exporters to make the Chinese market profitable, and will the US have the necessary infrastructure to make this possible?” Kauzlarich asked.

The former ambassador previously told TheDCNF that China will continue importing LNG and oil, but he isn’t sure if it will accept its rising dependence on U.S. energy. China’s own fracking revolution stalled due to the poor quality of its shale reserves. Though China’s shale reserves are large, they are prohibitively expensive and technically difficult to extract, being economically recoverable at a shockingly high $345 a barrel.

U.S. consumers face minimal costs to export LNG and pocket huge economic benefits, according to a study the Department of Energy published in December 2015. The study found exporting American LNG would provide huge environmental benefits as well. The report states exporting LNG will help “address a variety of environmental concerns in the power‐generation sector.”

Exporting natural gas is likely to be a growth industry, as global demand for natural gas is expected to be 50 percent higher by 2035 than it is now, according to the International Energy Agency.

Follow Andrew on Twitter

Send tips to andrew@dailycallernewsfoundation.org.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact licensing@dailycallernewsfoundation.org.

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel