Editor's note: This article is written for publication by a federal agency whose goal is to transparently coordinate permitting and construction of a pipeline that delivers Alaska's natural gas to the Lower 48.

The global liquefied natural gas industry has been marked in recent years by a multibillion-dollar build-out, new suppliers, fresh markets, a new dominant player and an emerging rival.

In the last five years, the volume of LNG available on the market has jumped 50 percent, a growth rate that's three times faster than the overall growth of world gas production.

Qatar, with a mighty 900 trillion cubic feet of gas reserves, swept Indonesia off the LNG production throne as the new industry leader in output during this period.

Norway entered the competition with its first LNG exports in 2007. Yemen got in the game in 2009, as did Russia that year with its Sakhalin 2 development. Peru became an exporter last year.

The stampede to open or expand liquefaction plants involved 23 LNG plants around the world, with 16 of them located in Asia or Australia.

A new International Gas Union survey of the LNG industry lists 14 more LNG projects under active development - eight in Australia and three others nearby. Australia could leap over Qatar as the leading LNG producer within 10 years.

LNG demand has kept up with supply for obvious reasons - all that LNG went out and found buyers. LNG's percent of world gas consumption - its market share, in business school parlance - jumped to 9 percent last year from 6 percent in 2000. The rest, 91 percent of the world's gas output, moved to market via pipeline last year.

But this story line of breathtaking growth is not all a tale of successes and smiles.

The story is also a tale of big bets on U.S. LNG demand that never materialized thanks to a wildcard that no one saw coming - the rise of Lower 48 shale gas production.

A shale gas curveball

Global capacity to produce LNG has grown even faster than the remarkable growth in LNG volume sailing around the globe on special tankers.

In fact, while demand grew by 10.7 billion cubic feet a day in the past five years, the capacity of new and expanded production plants grew by 14.4 bcf a day. An additional 8.8 bcf a day of production capacity is under development, according to IGU figures. The LNG tanker fleet has grown even faster, IGU reports. 

This means many LNG plants are producing far below their capacity. And that has tossed topsy-turvy how LNG is bought and priced. A decade ago the industry was defined almost exclusively by LNG importers signing long-term supply contracts. That world has shifted to one in which LNG shipments increasingly are bought on the spot, or short-term, market. Further, the historic link of LNG prices to oil prices is weakening.

Why has so much overbuilding occurred? The answer centers on the rise of Lower 48 shale gas production.

Much of the LNG capacity growth came from exporters salivating to serve what in the mid-2000s looked like a rapidly widening gap between U.S. gas consumption, which was rising, and U.S. production, which was falling from conventional fields. This is the same gap that revived plans to build the major pipeline to move gas from Alaska's North Slope to Alberta and on to the Lower 48 states.

Instead of widening, the gap has stabilized and the U.S. Energy Information Administration forecasts it to remain stable or even shrink over the next decade.

The swift rise of shale gas has transformed much about the North American gas industry: