The role of natural gas in the U.S. economy has been a major part of the energy policy debate in the 114 th Congress. Both the House and the Senate have held multiple hearings related to natural gas. Numerous bills have been introduced in both houses. This report highlights key aspects of global natural gas markets, including supply and demand, and major U.S. developments. Select statutes of U.S. law related to natural gas can be found in Appendix G . Some consider natural gas a potential bridge fuel to a lower-carbon economy, because it is cleaner burning than coal and oil. Natural gas combustion emits about one-half less carbon dioxide than coal and one-quarter less than oil when consumed in a typical electric power plant, offset somewhat by fugitive emissions. Fugitive emissions, which can be intentional (i.e., vented) or unintentional (i.e., leaked), are natural gas that is released to the atmosphere during industry operations. Natural gas combustion also emits less particulate matter, sulfur dioxide, and nitrogen oxides than coal or oil. In recent years, the United States has become the home to the shale gas revolution, as improved methods to extract natural gas from certain shale formations have significantly increased the resource profile of the United States. This has spurred other countries to try to develop shale gas, but progress is slow outside of North America. If the United States continues to and other countries can bring large new volumes of natural gas to market at a competitive price, then natural gas could play a larger role in the world's economy. In 2016, the United States started exporting liquefied natural gas (LNG) from the lower 48 states. Several key factors will determine whether significant new quantities of natural gas come to market, particularly unconventional natural gas resources. These factors include price, technical capability, environmental concerns, and political considerations. Many countries, both producing and consuming, are watching how the development of U.S. unconventional natural gas resources evolves. Natural gas is likely to play a greater role in the world energy mix given its growing resource base and its relatively low carbon emissions compared to other fossil fuels. The world used 122,442 billion cubic feet (bcf) of natural gas in 2015, of which the United States consumed over 27,463 bcf, or about 23% (the most of any country). World natural gas consumption grew by 1.7% in 2015, which was below the 10-year average of 2.3%; U.S. consumption grew by 3%. U.S. unconventional natural gas reserves and production, particularly shale gas, have grown rapidly in recent years. According to the latest data, shale gas made up 51% of proved U.S. natural gas reserves and accounts for 56% of dry natural gas production. The new shale gas resources have changed the U.S. natural gas position from a net importer to a potential net exporter. Global trade in natural gas is increasing and new players are entering on both the supply side and the import side, making the global gas market more integrated. In 2015, the world consumed about 122,442 bcf of natural gas —23.8% of total global primary energy consumption, placing it third behind oil and coal. The United States was the world's largest consumer of natural gas, accounting for 27,463 bcf, or 22.8%, of global consumption (see Figure 1 ). Russia is the second-largest consumer of natural gas, using 13,820 bcf in 2015. Natural gas accounted for 53% of Russia's total primary energy consumption, ranking it above oil and coal. However, natural gas consumption has declined overall in Russia, decreasing 8% between 2011 and 2015, due to a weak economic environment. Global consumption of natural gas grew at 1.7%, which was below the 10-year average of 2.3%. The United States was one of three countries with the largest consumption growth, at 3%, while also contributing the largest growth in absolute terms and accounting for almost 40% of the total growth. Iran and China also experienced increased natural gas consumption, at 6.2% and 4.7%, respectively. China is the most populated country in the world and has a growing economy, resulting in the country being one of the largest global energy consumers. China accounts for almost half of the world's total coal consumption, and while the use of natural gas has increased over the past 10 years it remains a small percentage of China's energy consumption, at about 5%. China continues to seek increased energy security by expanding natural gas imports through pipelines and as LNG. Iran holds the world's second-largest natural gas reserves; however, its energy sector has stagnated in the past few years due to international sanctions and a lack of foreign investment and financing. Iran has a thriving domestic energy demand that has increased 50% since 2004. The majority of Iran's natural gas production is consumed domestically, with natural gas comprising 60% of its total primary energy consumption in 2014. The lifting of international sanctions began in early 2016 following the implementation of the Joint Comprehensive Plan of Action. Major discussion points for policymakers in light of the lifting of sanctions may be Iran's capacity for natural gas production and its role in the global energy market. In 2015, the United States consumed 27,463 bcf of natural gas, making up nearly 23% of total global consumption. The United States is the largest consumer overall of natural gas, and the second-largest consumer overall of energy in the world. Electric power generation made up 35% of U.S. natural gas consumption in 2015; industrial use accounted for 27%, residential use for 17%, and commercial use for 12%. There is a noted rise in the use of natural gas for electric power generation, which can be attributed to low natural gas prices due to the abundance of domestic gas resources, and to policies that promote the use of fuels with lower emissions. Demand for natural gas for power generation has more than doubled since 2000 and is expected to grow by 40% by 2040. The U.S. industrial sector increased its consumption of natural gas by 10% between 2010 and 2015. As the United States continues to expand its growing resource base, the industrial sector will see a wider array of fuel and feedstock choices, and manufacturing industries such as bulk or primary metals could also experience further growth. Global proved natural gas reserves—natural gas that has been discovered and can be expected to be technically and economically produced—amounted to 6,599,400 bcf (or 6,599 trillion cubic feet (tcf)) in 2015, which correlates to a 53-year supply at current production levels (see Figure 2 ). New reserves are developed every year as existing reserves are consumed. Global natural gas reserves have grown about 19% since 2005, demonstrating the success of exploration and improved recovery techniques. Of the top 10 reserve holding companies all are majority owned by their respective governments (see Appendix F ). Globally, over half of the world's proven natural gas reserves are controlled by the top 10 government-owned companies, with all but one being 100% state-owned. Russia's Gazprom is majority-owned by the state and acts as an arm of the government. Iran's National Iranian Oil Company is the single largest reserve holder of natural gas. In 2015, U.S. natural gas reserves were 368,700 bcf, about 5.6% of total world reserves. The development of shale gas has been a huge driver behind the increase in U.S. natural gas resources (see Figure 3 ); in 2014, shale made up 51% of proven natural gas reserves. Global natural gas production in 2015 grew by 2.2%, which was below the 10-year average of 2.4%. Growth was below average in all regions except North America, Africa, and Asia Pacific. U.S. natural gas production accounted for 22% of total global production in 2015. Between 2005 and 2015, total natural gas production in the United States increased 50%. In 2015, the United States produced 27,086 bcf of natural gas, an increase from 25,716 bcf in 2014. The United States had the world's largest production increase, 5.4% (see Figure 4 ). The increase in natural gas production can be attributed to the development of unconventional resources, specifically in the Marcellus and Utica shale formations, which have accounted for 85% of the increase in natural gas production since 2012. Overall, U.S. natural gas production is continually rising despite low prices. Between 2005 and 2015, production increased over 65%. By 2040, shale gas production is projected to increase 73% to 19.6 tcf, leading to a 45% overall increase in total U.S. natural gas production, from 24.4 tcf to 35.5 tcf. Liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state, making it 600 times smaller in volume. In its liquid form, natural gas can be shipped to global markets on tankers and received at LNG import terminals. LNG is becoming more prevalent in the global gas trade as new gas supplies are introduced to the market, further integrating regional gas markets. In 2015, LNG trade increased 1.8%, and the share of LNG in the global gas trade was 33%. In response to the increase in LNG trade, many countries are looking to expand their LNG export capacity. In 2016, Australia (in January) and the United States (in February) from the lower 48 launched their first shipments of LNG. In the past decade, the United States prepared to increase imports of LNG based on forecasts of growing consumption, and began constructing LNG import terminals. However, the rise in prices gave the industry incentives to bring more domestic gas to market, reducing the need to use import terminals.