1-22-2005 U.S. Importing More Liquefied Natural Gas
For years, liquefied natural gas (LNG) was too expensive. It really was not needed. Even today, there are safety and terrorism worries, exaggerated or not, about shipments of the fuel.
But as growing demand for natural gas outstrips North America's conventional supplies, many experts view imports of LNG as the only way to head off decades of soaring prices for businesses and the tens of millions of households that rely on the fuel for heat and electricity.
"If we don't have the capacity to bring in the amount of gas we need and domestic supply goes the way we think it will, the clear implication is higher prices"
LNG import terminals in Louisiana, Georgia and the Boston area also are expanding. Despite community opposition, more than 40 new LNG projects are proposed around the nation. About a dozen probably will be built, according to experts.
Traditionally, U.S. demand for natural gas has been met almost entirely from pipeline-accessible fields in the United States and Canada. Experts, however, say wells in the Gulf of Mexico are in decline, Canada's production will fall off after 2015 and gas fields in the Rocky Mountain states and Alaska will not meet future demand.
"We have not been able to increase gas production for a decade," says energy consultant Daniel Yergin, chairman of Cambridge Energy Research Associates. "U.S. gas productive capacity, like oil, is now in permanent decline."
At the same time, he says, the world "is awash with gas," most of it far from eager markets, and awaiting LNG's emergence as "a second global energy business," rivaling oil.
higher gas prices ? two or three times what they were a few years ago ? are why LNG is so popular. Even if gas prices retreat, they probably will be higher than the roughly $3.50 per thousand cubic feet needed to make LNG imports profitable, experts say.
No wonder that some of the energy industry's heaviest hitters have embraced LNG's development.
ExxonMobil Corp., which has invested heavily in gas projects in Qatar, has plans for 28 LNG vessels, including supertankers that can carry two-thirds more volume that today's fleet.
Shell is involved in several LNG import facility projects. ConocoPhillips is part owner of a large new LNG terminal proposed near Freeport, Texas, and is looking to build several more.
Energy companies are expected to pump more than $250 billion into the global LNG business, according to the International Energy Agency. A single LNG "train" ? gas production, liquefaction and export facility, tankers and re-gasification plant ? can require $4 billion to $6 billion, according to energy executives.
Last month the commission approved what will be the largest LNG import terminal in the country, at Sabine Pass in Cameron County, La. It is capable of handing 2.6 billion cubic feet of gas a day.
For years, liquefied natural gas (LNG) was too expensive. It really was not needed. Even today, there are safety and terrorism worries, exaggerated or not, about shipments of the fuel.
But as growing demand for natural gas outstrips North America's conventional supplies, many experts view imports of LNG as the only way to head off decades of soaring prices for businesses and the tens of millions of households that rely on the fuel for heat and electricity.
"If we don't have the capacity to bring in the amount of gas we need and domestic supply goes the way we think it will, the clear implication is higher prices"
LNG import terminals in Louisiana, Georgia and the Boston area also are expanding. Despite community opposition, more than 40 new LNG projects are proposed around the nation. About a dozen probably will be built, according to experts.
Traditionally, U.S. demand for natural gas has been met almost entirely from pipeline-accessible fields in the United States and Canada. Experts, however, say wells in the Gulf of Mexico are in decline, Canada's production will fall off after 2015 and gas fields in the Rocky Mountain states and Alaska will not meet future demand.
"We have not been able to increase gas production for a decade," says energy consultant Daniel Yergin, chairman of Cambridge Energy Research Associates. "U.S. gas productive capacity, like oil, is now in permanent decline."
At the same time, he says, the world "is awash with gas," most of it far from eager markets, and awaiting LNG's emergence as "a second global energy business," rivaling oil.
higher gas prices ? two or three times what they were a few years ago ? are why LNG is so popular. Even if gas prices retreat, they probably will be higher than the roughly $3.50 per thousand cubic feet needed to make LNG imports profitable, experts say.
No wonder that some of the energy industry's heaviest hitters have embraced LNG's development.
ExxonMobil Corp., which has invested heavily in gas projects in Qatar, has plans for 28 LNG vessels, including supertankers that can carry two-thirds more volume that today's fleet.
Shell is involved in several LNG import facility projects. ConocoPhillips is part owner of a large new LNG terminal proposed near Freeport, Texas, and is looking to build several more.
Energy companies are expected to pump more than $250 billion into the global LNG business, according to the International Energy Agency. A single LNG "train" ? gas production, liquefaction and export facility, tankers and re-gasification plant ? can require $4 billion to $6 billion, according to energy executives.
Last month the commission approved what will be the largest LNG import terminal in the country, at Sabine Pass in Cameron County, La. It is capable of handing 2.6 billion cubic feet of gas a day.
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