Shifting US energy policies, increased costs of capital, the accelerating momentum of environmental movements, and profound challenges in attracting new talent are all combining to test the energy industry as never before.
When Cheniere loaded the first liquid natural gas (LNG) cargo from Sabine Pass, Louisiana in 2016 it marked the beginning of a direct linkage between the US and global natural gas markets, and created the first Henry Hub linked LNG pricing formulas that have subsequently carried over to virtually all US cargos destined for international markets. This price linkage has had little impact on US natural gas prices, even as LNG export capacity has grown. Ample - and relatively cheap - natural gas supplies recovered from US shale and tight sands thanks to technological advances have been able to support the US and now global market up to this point in time.
However, in the words of Bob Dylan, “the times they are a-changin”. A multiplicity of global events and US domestic developments mean that the price linkage to international markets could soon play an important role in determining the future trajectory of US energy prices.