Natural gas price surge puts new focus on LNG

A new analysis argues U.S. domestic natural gas prices are no longer untethered from the growth of liquefied natural gas exports.

Driving the news: The Center for Strategic and International Studies' Nikos Tsafos points out that for most of the five years since U.S. LNG exports began, there was basically no relation to prices.

• But that's no longer true.
• "In Q3 2021, however, there was strong evidence that exports are the primary demand driver for U.S. gas and thus the increase in prices," Tsafos writes.

How it works: U.S. gas demand has been largely flat, so has production, but exports have been climbing sharply this year and are a "main driver of higher natural gas prices in the United States as the country heads into winter."

Why it matters: Tsafos argues that the political impact of the new landscape depends on how much domestic production responds to higher prices at a time when investors want restraint from drillers.

• The Wall Street Journal notes that domestic industrial users are already upset and calling on the Department of Energy to curb LNG export levels.

Go deeper: What's behind the rising energy prices