April 2026 Vol. 81 No. 4
Editor's Log
Editor's Log: Fueling the future
By Robert Carpenter, Editor-in-Chief
(UI) — As knee-jerk reactions – typical of the energy world – reverberate around the globe due to the war in Iran, I thought a dose of reality might be somewhat reassuring, at least from the North American natural gas market perspective.
Until the Strait of Hormuz was essentially shut down due to Iranian extortion, all was good in the world of oil and gas supply. But as we all know, supply and delivery is very meticulously orchestrated by major producing countries.
The Strait of Hormuz is one of the world’s most vital oil transit chokepoints, with 20 percent of global oil consumption and 20 percent of global LNG exports passing through this 30-mile-wide bottleneck on a daily basis. Asian markets such as China, India, Japan and South Korea, receive their daily dose of energy life via the Strait of Hormuz. Even a minor disruption of the strait can immediately trigger global energy price spikes, supply shortages and worldwide economic ripples. The war with Iran has quickly become a major disruption.
As I discussed in my column last month, the U.S. still needs heavy oil from abroad. The U.S. supply of oil is bountiful but lacking in the type of oil we’re set up to refine. What has been generating that ample supply of black gold in the U.S. is shale oil, which is considered a lighter composition frequently called “sweet.” The type of oil the U.S. has been importing for many decades is considered “heavy” or even “sour.”
Consequently, domestic refineries were largely constructed to refine the heavy oil. While sweet crude is fine for many applications, some of the most common needs – like gasoline and diesel fuels – are still being produced from heavy oil. Thus, the U.S. remains an importer of heavy oil while an exporter of gasoline and diesel fuel.
That dynamic is changing but retooling refineries – when even possible – is often neither practical nor affordable. In the meantime, construction will start on a new refinery this fall in South Texas designed to refine sweet crude. Projected to be online as soon as 2028, we potentially will see an easing of heavy crude imports into the U.S.
On the flip side of the energy coin, natural gas has no such problems with refining. Gas is primarily used as a clean and efficient fuel source. As it pertains to gas, the U.S. is sitting pretty. In fact, we’re a net exporter of liquified natural gas (LNG) with several exporting stations being strategically constructed around our shorelines.
However, to continue driving the renewed flourishing of the gas markets, pipelines are essential. TC Energy CEO François Poirier recently said LNG growth will depend on expanding pipeline capacity, rather than additional gas supply. “Really when you talk about our ability to grow supply into demand, it’s all about the pipeline infrastructure,” Poirier explained.
The long-term outlook for LNG demand also remains intact. Poirier pointed to forecasts calling for a 50-to-65-percent increase in global demand over the next decade or more, reinforcing the need for continued infrastructure investment. He added that interest in North American LNG is increasing, particularly for projects that can provide a more direct path to Asian markets.
Beyond LNG exports, Poirier said rising electricity demand tied to data centers and artificial intelligence is adding urgency to infrastructure development, with policymakers increasingly focused on ensuring energy supply can keep pace.
So how fast will America rise to the pipeline challenge as pressure mounts to deliver gas from producing wells to robust markets?
Pipeline projects require years to permit and construct, limiting how quickly new capacity can come online. However, President Trump’s administration has been instrumental is clearing and accelerating regulatory hurdles that have historically burdened the U.S. energy markets.
Further, myriad studies over the past few years have projected that the U.S. has enough known gas reserves to more than cover our needs for the next 300 years, with much more unknown gas reserves available. Experts claim that even these power-hungry centers will not abate the U.S.’s gas supply for hundreds of years.
Will another fuel source rise to compete with natural gas? Probably. But the question is when and what kind of logistics will be required. The practicality of our energy needs, at least in the U.S., is that if we have the will to overcome political hurdles, gas will serve us extraordinarily well for decades, if not centuries.
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