Last year, the United States added roughly 16.7 gigawatts of net power generation capacity to the grid -- and 95% of it came from renewable sources. The U.S. Energy Information Administration even expects wind power to overtake hydroelectric as the largest source of renewable energy by 2019 at the latest, providing close to 7% of the nation's total electricity. Similar investment patterns are playing out across the world.  

While it's an incredible (and encouraging) trend to be sure, focusing the discussion on the rise of renewables risks creating a narrative that excludes some important data points, such as those detailing the globe's nearly insatiable appetite for natural gas, which is now easier than ever to transport thanks to the overnight maturation of liquefied natural gas (LNG) markets.

It's a timely development, especially considering that natural gas will become a key tool allowing countries to meet their climate goals -- even helping renewables capture greater market share. Luckily for forward-thinking investors, Royal Dutch Shell (NYSE:RDS-A)(NYSE:RDS-B) recently published data and its outlook for what's ahead. Here are five things the energy giant wants you to know about LNG.

An investor looking at a green bar chart showing growth.

Image source: Getty Images.

1. Global LNG trade is booming


The global LNG market was expected to grow by about 23 million metric tons (MT) from 2016 to 2017. Instead, it grew by 29 million MT -- 26% higher than expected -- to reach 293 million MT total. Royal Dutch Shell says we ain't seen nothing yet.



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2. A global supply crunch is looming


That's because the world is expected to add over 40 million MT of new LNG liquefaction capacity in 2019 but less than 2 million MT the following year. Due to the massive capital requirements, complexity, and lengthy construction time of LNG liquefaction facilities and export terminals, that's a problem -- and not one that can be resolved in short order.

The steep drop-off in investments needed to grow supply in lockstep with demand is a result of shifting dynamics in the market. Countries purchasing LNG want smaller volumes and more flexible contracts, while companies exporting LNG want larger volumes and less wiggle room so as to provide certainty to shareholders and creditors. Right now, there's a stalemate -- and Royal Dutch Shell thinks the market will pay the consequences sometime in the next decade.

An LNG tanker at an export terminal.

Image source: Getty Images.

3. Fast and flexible ships are driving growth





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4. LNG helps, not hinders, renewables



Remember, not every country can import natural gas through land-based pipelines, but many could benefit from the energy source's flexibility. LNG makes those advantages more widely available to more of the globe. 

The inside of a cooling tower at a power plant.

Image source: Getty Images.

5. LNG is needed to reach climate goals


Coal-fired power plants currently generate 37% of the world's electricity. In countries with bountiful natural gas reserves, such as the U.S. (on tap to become the world's third-largest LNG exporter by 2020), coal's eulogy is in the process of being written. It's a bit more complex in countries lacking natural gas reserves, such as China and India, which each rely on coal for nearly 75% of their electricity generation. 


Royal Dutch Shell is bullish on LNG

It's easy to see why natural gas and LNG are neglected in favor of renewables in discussions about the future of energy, but forward-looking investors may want to be more open-minded. Even if you believe that distributed and renewable energy should be the ultimate goal of human civilization, it's impossible to dismiss the role natural gas and LNG will play in helping to deliver that outcome.