Riding the US Liquefied Natural Gas Wave

The United States is rapidly expanding its ability to export liquefied natural gas (LNG), as more countries look to embrace cleaner energy. Franklin Equity Group’s Matt Adams gives his outlook for US LNG and the possible investment implications.

Though carbon-based and not listed as a true “clean” energy source, natural gas has long been described as the “bridge fuel” to a cleaner energy future as the world weans itself off highly polluting coal and oil.

In our view, that bridge looks likely to extend well into the next decade, as more countries turn to natural gas in a bid to displace coal as the largest source of power generation. Moreover, long-term LNG supply additions appear to be slowing down after years of underinvestment and few recent project sanctions.

In 2016, natural gas supplied 22% of the world’s energy, and its use is growing.1 As the chart below shows, the International Energy Agency (IEA) projects natural gas to account for 25% of the global energy mix by 2040.