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U.S. LNG Exports a Potential Game Changer

Sigma Investment Counselors

March 2, 2016

A few days ago, the first export cargo of liquefied natural gas (LNG) departed the U.S. for Europe.  While current export volumes of natural gas to Europe from the U.S. are nominal, the longer term implications are material.

Western Europe is highly dependent on Russia’s Gazprom for natural gas supplies.  The availability of increasing volumes from the U.S. may have significant geopolitical implications.

Domestically, in part due to the success of fracking technology, there remains a significant glut of natural gas.  Increased exports of this commodity are likely to benefit the domestic energy industry while having little or no adverse impact on U.S. consumer prices.

Additional commentary related to the economics of LNG can be found in our blog “Thoughts About Energy Generally, and Natural Gas Specifically”, posted July 5, 2012.

All comments and suggestions are welcome.

Walter J. Kirchberger, CFA®

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