In January 1959, a converted World War II liberty freighter named The Methane Pioneer set sail from a Louisiana port to the U.K. loaded with LNG.

Choked by killer fogs from the burning of coal, Britain hoped that “one way to deal with it was to import natural gas,” said Daniel Yergin, a Pulitzer-prize winning author who serves on the U.S. Secretary of Energy’s advisory board. “That was the beginning of the trade of LNG,” Yergin said at the recent LNG 17 conference.

Decades later the U.S. seemed destined to be the recipient of LNG as gas production seemed on the decline.

“Things have turned around,” Yergin said. The U.S. and Canada are expected to be players in the LNG market and perhaps dominate it.

But LNG exports are a puzzle in which each piece is in motion. In the coming years, the U.S. will export billions of cubic feet of natural gas, LNG prices will rise and stabilize at up to three times their price while hampered by the escalating costs of skilled labor.

Today, “everyone has the expectation that the U.S. will play an important role as an LNG exporter,” Yergin said. “Of course the debate is how big of a role and how soon that will occur and how much.”

Yergin, vice chairman of IHS, said he’s struck by how often the unexpected has hit the energy industry.

He wondered what will happen if North American exports turn out to be much larger than people project. “That would change the balance in price formation and ... create question marks for other projects in other parts of the world.”

And what if gas export results in an excess surplus? Or if so much LNG comes into the market and traditional pricing relationships break down to the point of a commodity business?

Yergin said the U.S should set a new competitive price benchmark for gas around the world for perhaps $12 per million Btu. U.S. LNG exports to Japan averaged $14.44 in 2012, according to the Energy Information Administration.

“Obviously that doesn’t mean everyone by any means will adopt that pricing system,” he said. “But it will be possible in some cases to deliver gas from the U.S. to almost any global coastal port.” Yergin said there are about 30 applications for build facilities. Only a fraction will be built, he said. Such large-scale facilities are painfully expensive to build— $10 billion or more.

In January, 20 U.S. firms had submitted applications for U.S. LNG exports. Of those, 16 were approved for countries with free trade agreements (FTA) with the U.S., such as Canada, Mexico, Chile and South Korea.

However, Cheniere Energy’s Sabine Pass plant and the Freeport, Texas, plant backed by ConocoPhillips are the only two LNG projects approved for export to non-FTA countries.

For the overall natural gas market, “we are optimistic. We expect global natural gas demand to double by 2040 from where it is today,” Yergin said.

By 2040, that would constitute demand of 620 Bcf per day.

“For those who think in oil terms, that would be equivalent to 100 million bbl. a day of oil equivalent, which is larger than today’s world oil market,” he said.

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