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Import and export of natural gas

By importing and exporting natural gas, the USA participates actively to the global flow of combustibles such as oil and gas. According to official figures, the USA imports gas from nine countries and exports it to three others. Imports of natural gas have permanently played a key part in satisfying the USA gas market demand. Huge amounts of oil and gas had to arrive as imports, particularly because natural phenomena, such as the terrible hurricane back in 2005, influenced the production in the Gulf of Mexico area. The process also triggered higher prices in international trade. Not only that imports increased, but also exports decreased.

In this manner, the entire economy underwent a change or at least felt it at certain levels. Nevertheless, liquifaction, which is a rather recent process, suffered from no severe influence. This was due to modality of storage for LNG (liquified natural gas). International gas trade mostly takes place with Mexico and Canada by means of pipelines connecting the three states. Price data setting is possible having as a starting point the relation between dollars and million British thermal units (MMBtu).

An analogue measure is equivalent is the Mcf (dollars per thousand cubic feet). The former measures the volume of the natural gas, while the latter determines its value. The mathematic relation between them looks like this: 1 Mcf = 1.03 MMBtu for domestic gas. Nevertheless, natural gas imports oscillate significantly from 1,000 to 1,125 MMBtu per Mcf. Consequently, the display of prices takes place in terms of both volume and heat content for proportional purposes.

To what concerns import and export, they are not the equal for oil and gas. Import figures reached 6.1% in quantity within a period of just one years, from 2004-2005. This generated significant rise in US imports of natural gas from Canada, but also a decrease in US exports to both Mexico and Canada. Net imports of gas have known constant and considerable growth starting with the mid-1980s. Back then, pipeline imports from Canada began to increase dramatically and they have continued to grow up to now.

This tendency reached the peak in 2005, after the one-year period. Afterwards, a declining tendency has developed, as records show. Again, the situation was not the same for other fuels. Nevertheless, a correlation existed between oil and gas, in the sense that the former influenced the latter.

As far as the prices were concerned, they rose suddenly in 2005, reaching an annual average of $7.92 per MMBtu. This corresponds to $8.12 per Mcf. This meant an increase of 40% as compared to the previous year.

The export figures increased this time by 24.7%. Meanwhile, exports dropped down to 729 Bcf, representing 14.7%. This situation was the inverse of the generous percentage recorded over the past decade.

Natural gas exports to Mexico suffered to the highest degree, coming to experience reductions to 305 Bcf from 397 Bcf. That meant a decrease of 23.2%. LNG had also known a negative influence, as far as the US imports were concerned. The price of raw gas brought to USA through pipelines exceeded the price of the imported LNG.

This highlighted the competitiveness coming from Europe (France and Spain). Nevertheless, these countries avoided sending their shipments to the American continent because of restrictions in global supplies and price competition. Not all these changes contributed to a rise-and-fall context of the USA imports and exports.

However, they managed to influence the relationship between oil and gas. Generally, this connection suffers influences according to supply and demand. Nevertheless, these, in their turn, depend directly on import or export determined by other necessities. In this case, larger amounts of import were necessary because of natural catastrophes. To sum up, prices for natural gas imports and exports have steadily increased recently.

The only oscillations recorded in 2005 and they took place because of the loss of supplies following the hurricane season.

Although there is a tight relation between oil and gas, the market that suffered the most changes for the USA was that of the natural gas.

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