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Business > Hendren Global Group News Blog - Quora

Hendren Global Group News Blog - Quora

NatGas Exports Boost Economy, Reduce Greenhouse Gas Emissions


hendren global group news blog
American consumers and businesses are currently reaping a windfall from the lowest natural gas prices in years.
Cheap gas has reduced heating and electric bills for millions of households, while industries using natural gas as a feedstock or boiler fuel have realized huge production cost savings.
At the same time, however, $4 gas at the wellhead, though double last year's price, has caused many drilling companies to reduce production and move their rigs to more profitable oil plays.
As with all commodities, the price of natural gas is determined by supply and demand. Today the supply is abundant, a consequence of the shale gas revolution, while demand is muted due to a sluggish economy.
Because of America's large and growing reserves of natural gas, potential supply will exceed anticipated domestic demand for many years to come.
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Indeed the Potential Gas Committee, a coalition of utilities and production companies, recently boosted its estimate of recoverable reserves by 26% to 2,384 trillion cubic feet — an amount equivalent to 90 times last year's consumption.
Though domestic demand for gas may grow only slowly, there's a huge global market for the commodity. With Japan retreating from nuclear power after the Fukushima accident, its need for gas to generate electricity has risen exponentially.
Because Germany is also planning to phase out nuclear power over the next decade, that country's demand for natural gas will escalate as well.China and Korea are also expected to be huge gas importers for the foreseeable future.
U.S. producers will need higher prices if they are to remain profitable, and selling our gas abroad offers the best opportunity for boosting demand. But to ship American gas across the oceans it must first be liquefied, requiring huge investments in liquefaction plants, export terminals and special LNG (liquefied natural gas) carriers.
To date, only one terminal and liquefaction plant has been approved by the U.S. Department of Energy — Cheniere Energy's Sabine Pass facility in Cameron Parish, La. Another 20 applications are pending.
Unfortunately, some members of Congress, as well as some corporations and environmental groups, are pressuring the Department of Energy to go slow by claiming that exporting LNG will be bad for the economy and the environment.
Rep. Edward Markey, D-Mass., argues that exports will push up prices, reduce the competitiveness of U.S. business and slow the transition away from dirtier fuels.
Dow Chemical, one of the most vocal opponents of LNG exports, says America would be better off using its "cheap" natural gas to boost domestic manufacturing as opposed to indirectly shifting jobs abroad.
hendren global group news blog



posted on Apr 24, 2013 8:59 PM ()

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