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Exporting Natural Gas

June 14, 2013

Various forces are arrayed against permitting the export of liquefied natural gas (LNG).

A few industry sources, primarily DOW Chemical Company, oppose the export of LNG for fear that the price of natural gas will rise to the point where their business will be harmed.

Environmentalists, such as the Sierra Club, and their allies in Congress, including Representatives Markey and Waxman, oppose LNG exports because they believe it will increase methane emissions to the atmosphere. The Sierra Club, for example, has declared war against natural gas, i.e., methane.

In the view of environmentalists, and their allies, exporting LNG will merely increase the production of natural gas; something they believe should be avoided at all costs.

In this, they are partly correct; exporting LNG will increase the production of natural gas.

The real question, however, is, do we have enough natural gas to permit exporting LNG.

In the past few weeks, my articles have taken an objective look at our nation’s supply of natural gas.

The first article, Do We Have Enough Natural Gas?, examined the ways in which natural gas could be used, such as coal-to-gas switching for power generation, demonstrated that even with the largest probable use of natural gas we would still have around a sixty-year supply of natural gas.

Gas-to-Liquids (GTL) was also examined as an additional use of natural gas and it was shown that GTL would have a minimal effect on our supply of natural gas.

Finally, an article explored the probable future of mining natural gas from methane hydrates. See Natural Gas from Methane Hydrates.

All of this evidence clearly demonstrates that the government should allow the export of LNG, with market forces determining the quantity that is actually exported.

Other countries are gearing up to export LNG, including Australia and Canada.

Qatar, Algeria, Nigeria and Indonesia are already exporting large quantities of LNG. Shale gas in China is likely to reduce the market for LNG in China1.

All in all, it’s very likely that these competing sources of LNG will limit the amount of LNG the United States will actually export.

The article, Do We Have Enough Natural Gas?, estimated that 10.4 Tcf per year of natural gas could be exported if all 19 export terminals were authorized and built. The article also suggested it would be highly unlikely for all 19 terminals to be built.

The ICF Consulting firm’s highest export case is 5.8 Tcf, or approximately half my estimate.

ICF also projects that the price for natural gas at the Henry Hub will increase by $1.02 as the result of their maximum predicted exports of 5.8 Tcf, which should allay any fears that DOW Chemical or other manufacturers may have about natural gas prices rising precipitously.

Exporting LNG will also increase jobs and GDP.

Unfortunately, this administration may be siding with the Sierra Club and other environmental organizations, and their fear that green house gasses are causing global warming.

The facts strongly support the export of LNG. We can only hope that the fear of global warming doesn’t limit LNG exports and the many economic benefits that will ensue.

 

  1. The EIA’s latest report, June 10, 2013, estimates that China has the largest technically recoverable reserves of natural gas in the world.

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To find earlier articles, click on the name of the preceding month below the calendar to display a list of articles published in that month. Continue clicking on the name of the preceding month to display articles published in prior months.

© Power For USA, 2010 – 2013. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author, Donn Dears, LLC, is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Power For USA with appropriate and specific direction to the original content.

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4 Comments leave one →
  1. Craig Mott permalink
    June 15, 2013 5:27 pm

    Hi Donn,   I agree with your article and its conclusions about exporting LNG.  I also believe that other nations will side with the Sierra Club in limiting LNG as it will be tied to environmental issues around the world, but especially in China where they already have very dirty air from coal burning and exhaust from the ever-increasing combustion engine vehicles (around 20 million more each year, and growing).   From that article from the Huffington Post about Canadians and nearby Americans being against the rail transporting of coal due to health concerns about coal dust, more and more politicians, including Republicans, will side with environmental concerns in order to be re-elected.   Europe already is very pro-green, as is Canada and increasingly the US.  When Brazil and Russia begin to side with environmental concerns, and they probably will, you’ll see more political pressure for wind power, solar power, biomass fuels, etc throughout the world by 2020.  What will drive those changes will be early deaths in China and other concentrated populations due to polluted air.   You may recall that I lived in Taiwan for 4 years in the sixties and remember the coal-dust in the air commuting back and forth for over 2 hours each day.  I even rode a motorcycle part of the time and didn’t wear a nose and mouth mask as did so most of the Taiwanese bicycle and motor scooter riders in those days.   What are your experiences regarding being in the open in the large industrial cities of China during your recent trip there?   Craig

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  2. June 15, 2013 6:36 pm

    I’m afraid you may be right about other countries, especially in Europe, who will try to prevent the use of natural gas.
    There’s no question that there will be increasing clamor for wind etc., again especially from Europe. However, I think Europe’s influence will wane as they slide into the poor house. I’m drafting an article on Europe now.
    Russia will push any policy that harms the US, so I’m not sure what they will do.
    I was pleasantly surprised on my trip to China last August, in that there were no instances of excessive smog. Shanghai had about as much smog as did Denver on my trip to Colorado last week.
    Obviously I was lucky.
    I’m researching an article on natural gas for transportation to supplement my articles last January and February on the subject.
    I’ll publish it in a week or two, but I won’t delve deeply into China.
    However, China is pushing the adoption of CNG and LNG, especially in the cities, with the intent of lowering smog. They have an aggressive program for this, so I’m not certain China will be driving the band wagon for wind etc. because of smog driven deaths. I think they are too pragmatic for that, and will focus on developing their military and space programs as they prepare to confront us … assuming that after this administration we are still worth confronting.
    Coal dust was never a problem in the cities, though I saw dust from loading operations along the Yangtze.
    We need to continue to educate people about energy issues, which is the thrust of my articles, for which I receive no remuneration.
    This is why I continuously try to increase the number of people reading my articles.
    Your experience in Taiwan sounds interesting. I visited Taiwan twice, but didn’t run into the coal-dust problem. My visits were to Keelung, Taipei and Kaohsiung where I focused on manufacturing and oil installations rather than power plants.

  3. June 20, 2013 5:02 pm

    Reblogged this on acckkii.

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