Frack to the future
The shale revolution is often credited with much of the progress in America’s newfound oil boom, as hydraulic fracturing (or fracking) unlocked a wave of previously inaccessible, or at least uneconomical, oil and gas reserves. Fracking involves forcing liquid — usually water mixed with sand and chemicals — into fissures in shale rock, cracking and expanding the gaps, allowing the once-trapped oil and gas to find its way to the surface.
As fracking got more efficient, it wasn’t just the crude oil industry that benefited: America’s natural gas production has also exploded over the last 15 years.
Gassed up
Oil and natural gas now join the ranks of heavy machinery, semiconductor chips, and cultural exports like TV & movies, as one of America’s most important trading markets. In December 2023, the US exported ~400bn cubic feet more natural gas than it imported, a dramatic shift from a decade earlier. Driving much of the boom is America’s liquefied natural gas (LNG) export industry, which — as recently as 2015 — basically didn’t exist.
By liquefying the gas, at a frosty -260° Fahrenheit, shipping and storage becomes a lot easier, with the volume of natural gas in its liquid state roughly 1/600th of the volume in its gaseous state — enabling America’s newfound fracking success to be shipped all over the world.
Upheaval in energy markets, particularly after Russia’s invasion of Ukraine, further boosted demand for American LNG. Indeed, over the past 2 years more than 60% of US LNG exports have found their way to Europe, where buyers have been looking to replace lost supply from Russia. The overall result? From what was pretty much a standing start at the beginning of 2016, America’s LNG industry is now shattering records, with the US becoming the largest exporter of LNG in 2023, unseating Australia and Qatar.
