Natural Gas Supply Future

Zorian Pinsky

For your information:

http://www.energypulse.net/centers/article/article_display.cfm?a_id=828

Weezbo

That arctic government reserve has so much frickin nat gas

they cant even keep it in the ground...this piece urinates me off.its like the feds frick up every mining effort in every state they can..then some body does some statistical bs and low and behold stuff that should have already been realized dawns on one of these crooks we elected and we the people once again stand in line to be fed a Large portion of misinformation and decided outcome gar baH ge.here is where reading actually works against the "educated".........................

Darin Cook_3

The future looks bleak for NG

Our place as contractors in this battle is to make our customers aware of this. We need to push for much stricter building codes on all our buildings and mechanical systems. We do not even offer as a option, low efficiency equipment. We constantly try to get involved with our new construction customers and address the insulation package and air sealing. As a mechanical contractor, we need to look at the building as a system and how it all interacts. Even if the energy sources in this world were endless, I feel we are obligated to conserve those resources.







Darin

Firedragon_4

I wouldn't get my

skivvies in a bunch over this too much. Although as an oilman I was amused, hysterical, in fact.

For those of you old enough to remember in 1975 we were told that all of the oil would be gone by now, hmmmm! I wonder what all of these vehicles are running on especially these huge service vehicles I see more of?

It's the energy business boys and girls and after last year it looks very good in Houston and New York right now. Another cold winter and a few shortages will make the speculators and majors even richer so you want them to tell you there's plenty??? C'mon, you're big kids, face it!

BTW, why did we on our initial push into Iraq make a move that I find so troubling. Why did our valuable and irreplaceable best in the world fighting forces race to protect the oil interests and leave a nuclear reactor unguarded?

Simple, you can pump and move oil anywhere, ya can't move a reactor and what is the current price on a used one?

Another thing to ponder in the world of petroleum geo-politics. Would you be more nervous with the following showing up in your backyard?

A. A propane truck.

B. An oil truck.

C. A briefcase full of spent plutonium with a bomb and timer.

Have a nice Sunday I'm going to an American classic, a county fair, see ya!

DaveGateway

The Stupid solution

is building the next import nightmare: LNG tankers. Floating atom bombs. Wait for the first terminal accident.
Why is there no national energy plan? Why is there no manditory use of Bio-Diesel? The resources have always been there. Why must be wait so long for some action to finally be taken? Does George's/****'s investment in the oil industry have anything to do with it?

Constantin

Floating Atom Bombs?

Joe, I am going to have to disagree with the beginning of your post. IMHO, LNG tankers are about as safe as it gets in energy shipping. Twin hulls with 8 feet of insulation in between. A gas that will rise instantly the minute it is released, etc. A fleet that has yet to have a terminal accident, a fleet that has yet to spoil miles of beaches and kill millions of wildlife. Sir, the oil industry has done more to spoil this planet than the LNG folks can ever hope to do.

Having toured a LNG terminal (Everett, MA), a LNG carrier (the Matthew), and having spoken to people who ought to know just how dangerous LNG is, my conclusion is that LNG is not the problem. For example, go a little east and you come up behind Logan airport in a densly populated section of the greater Boston metropolis. Here, hundreds of single-hulled, gasoline-carrying tankers make their runs right under the flight path of thousands of planes.

Gasoline will produce a much better explosion than LNG because it has a much wider range of O₂-mix flammabiliy, has a tendency to cover the creek before going up, and its vapors being heavier than air.

Compared to the other fuels, transporting LNG is incredibly safe. The biggest issue is how to connect stranded assets to world markets. In the NE of the US, we only have one terminal due to NIMBY concerns. Yet we also have plenty of brownfield sites where the addition of a LNG terminal would only be an asset. But due to the successful hystericization of the US re: LNG terminals by Barbara Walters, et. al. folks still oppose them.

Some operators are now proposing doing end-runs around the NIMBY issue by placing the regasification facilities off-shore in federal waters. Then, a gas pipeline carries the stuff inland. The biggest issue here being that LNG carriers would sit there for about a week unloading instead of experiencing 24-hour turnarounds, further straining fleet resources.

Where I will agree is that more resources should be aimed at reducing our dependence on oil imports by blending bio-diesel. As oil prices continue to rise, there is no question that a point will be reached where bio-derived diesel and heating oil will be cheaper to produce than from traditional oil sources. Even today, folks like Home Power are advocating $0.70/gallon Bio-Diesel (based on recycling used, free cooking oil, IIRC).

The real question in my mind is: Where is the US farmers lobby on all this? Considering how sccuessfully they disrupted the sugar cane industry (by making all the food suppliers switch to a enzyme-treated cornstarch product) why aren't US farmers making a bigger stink about their ability to supply the US with a home-grown, sustainable source of energy?

Curious.

Ted_9

Im not starting trouble and I dont know enough to agree or disagree but we are living in a time of terrorist threats on our homeland. Ill bet petroleum is more dangerous in the way that it is stored and shipped. But I dont think that LNG is not suseptible to attacks.

Anyway, wind, solar and geothermal with back up fuel fired boilers are looking better.

< A HREF="http://www.patriot-hvac.com/">PATRIOT HEATING & COOLING, INC.

Constantin

And that's the problem, isn't it?

As a homeowner in the midst of a home renovation, I am struck by the costs that various systems carry with them.

For example, using Icenyne foam insulation is less than 1% of the total project cost (Walls, floors, attic, you name it). And folks tell me they cannot afford better insulation? Don't even get me started on the marginal cost difference between a Harvey-Tru-Channel storm window vs. either the competition or replacement with a new thermopane.

Considering the value-pricing that the AC-industry practices above 10 SEER, I doubt I will ever recuperate the marginal investment of going with 19-SEER AC systems... in Boston, of all places. If installing GSHP's wasn't so ridiculously expensive in this area (and if the local ECR/DX rep Tim Redmond could be bothered to reply to e-mail) perhaps a DX GSHP would have been an option.

But here is the rub: Unless suppliers gear up to provide first class service, consumers and contractors alike are going to be frustrated at every turn of trying to implement energy-concious measures. And then simply give up.

Let me give you an example from another industry: Fire sprinklers. Try finding a contractor in Boston that can be bothered to do residential work. So far, my contractor has been pulling out his hair trying to find a company that can be bothered to do a CPVC install in a residence. There isn't as much money in it, so most fire-sprinkler installers simply elect to ignore the residential market...

Constantin

We've always lived with threats...

...but if you look at the history of shipping energy resources, the biggest threat has not been from terrorists hijacking/targeting tankers, rather it's the law of probabilities catching up with the world tanker fleet. I.e. you can only have so many floating oil tankers going about business before one finds a reef, has engine trouble off the coast in a storm, etc.

Furthermore, also agree with you that LNG carriers can be susceptible to attack. However, I took issue to characterize them as floating atomic bombs, considering alternative energy carriers.

BTW, you won't believe how many funny looks I am getting for my contrarian position on fuel oil by going with a Vitola...

Constantin

One of the big ironies of natural gas is...

...that in most production environments it is simply flared off. Iraq has a complete over-supply of natural gas right now, yet cannot do anything with the gas because they do not have the equipment to channel it to markets. Only one electrical plant to date is running on natural gas, IIRC.

I can only hope that their infrastructure will take more advantage of their resources instead of just flaring the stuff into the sky. Modern production facilities compress and reinject the stuff for future use....

Zorian Pinsky

More on future energy needs and limitations

Constantin,

Reading the original article, the LNG as the source, appears has limitations.

"...A much larger limitation is shipping capacity. The world LNG tanker fleet in Q1 2004 was 156 vessels, with 62 more on order for delivery through 2008. World shipbuilding capacity for LNG tankers is 20 ships/yr. If this capacity is booked full another 50 or so vessels can be delivered by end 2008. All of the existing fleet is already under long-term contract, and not more than 18 of the vessels under order are available for shipments to the USA. Up to now about 40% of the USA LNG supply has come from Trinidad, 40% from North Africa, and the rest from the Middle East and Indonesia. Trinidad supply is now maxed out, but they will have some more capacity coming on stream in 2006. North Sea production is now in decline so Europe must become a much larger importer from North Africa. This means that most of the incremental USA supply will have to come from the Middle East, which means only about 10 deliveries per ship per year. One modern ship has a capacity of about 2.6-2.8 Bcf of regasified NG, but because of losses during transport, could only deliver about 2.3 Bcf per trip from Qatar to the USA. At 10 trips per year we would need an incremental 100 ships by end 2009 to meet 2010 demand equal to 2004 consumption, or 160 to meet 2002 consumption. Even if shipbuilding capacity is doubled by the end of 2006, (and the order book right now is not large enough to get that process started), and all of the incremental capacity went to serve USA demand, we would still be 50 ships short of minimum 2010 needs.

NB. – None of the above even considers North American production “falling off a cliff”! We can be confident that total USA NG supply in 2010 will be at least 1 Tcf less than the peak year of 2002, and there is a high probability that it will be less than half."

From all these (forecasted energy shortages, which only "blind" would reject), I make the conclusion that we, as citizens, should start shaking our federal elected officials, in order to actively search for solutions to better conserve the energy and how to utilize the renewable sources in economically efficient manner. This know-how could be and should be our edge over the developing countries vs. their cheap labor...

I argue readers of my message to read this article, as well. I tend to believe its author. He seems to be well informed, analytical and independent in his efforts.

http://www.energypulse.net/centers/article/article_display.cfm?a_id=819

Zorian

Rollie Peck

Someone has said, "Some folks will not be concerned about the environment until it interferes with television reception".
In the same way, some folks will not be concerned about our energy supply until it interferes with their comfort or their money supply. The energy crunch of the seventies was a good example. Man, how soon some folks forget!
Rollie

Tony_8

IIRC ?

What does that mean ?

Firedragon_4

Amen to that!

And it didn't take long to forget Oklahoma City or 9/11 did it???

After being in NYC on that horrible day I will never forget and I'm more afraid of LNG tankers, oil trucks, and anything that will go boom than I ever was working in SAC while 'in country', FACT!

Vigilence, vigilence, vigilence and God Bless all who stand on the walls of freedom!

Constantin

LNG is not that limited...

I don't have the figures handy myself, but I doubt that LNG shipbuilding capacity is that limited. There are plenty of yards in the EU and elsewhere busy going broke while gobbling up huge subsidies due to lack of work. Most EU work now seems geared towards cruise liners, though nothing prevents them from building LNG carriers, it's simply not as glamerous. Daewoo doesn't seem to mind building $150M LNG tankers though.

As for the EU gas supply, much of the external supply already comes from Russia. If you read the WSJ a week ago, they were mentioning how much the production and proven reserves in Russia are jumping right now due to the application of proven Western technology to old oil fields. The result is that the gas supply for the EU is not completely dependent on Algeria (which was the sole source for LNG in Boston before Trinidad came online). In fact, Spain was a big investor in Trinidad, a sure sore spot in its relations with the junta in Algeria.

As for Trinidad, lets look at some of the facts. The facility there is broken down into several "trains" of compressor cascades that allow modular expansion of the facility.

• Train 1 came online in 1999 and has a capacity of 3MM tons of LNG per year, with 60% going to NA, the rest to Spain.
• Train 2 and 3 came online in 2003 and are producing 3.3MM tons each. Only 38% of this stuff is going to the US due to LNG facility limitations (Elba Island in the SE).
• Train 4 is being built right now, with a projected output of 5.2MM tons of LNG per year. No markets have been selected to date, but I can assure you that the US would get a share, if a LNG landing facility still had spare capacity.

Considering that the latest expansion is costing them $1.2BN, I am going to assume that they are betting on the US finding a way to land additional LNG.

So, it seems to me like Trinidad is expanding its capacity by leaps and bounds. It's production capacity does not seem to be the problem. Rather, its the inability of the US to land the stuff.

For example, Harpswell, ME was considered for a new LNG regasification/storage facility and they were prepared to bring in 40 shipments per year, or about 1 per week. Somehow the backers of the project must have had a source for all that gas and a means to transport it, otherwise they wouldn't be risking a couple of hundred million dollars building a new facility in ME. The 40 trips/year would have required but two or three tankers, considering that the sail back and forth takes a week each way.

Plus, the Hibernia oil platform off of Newfoundland has 100MM m³ of gas reserves looking for a way to get tapped. They're currently re-injecting the stuff as no LNG terminal/liquification facility has been built yet. The total provincial gas reserves are estimated at 15 trillion cubic feet. That's a lot of gas, with a big, needy market nearby.

I guess all I am saying is that if you look at the amount of gas being flared or reinjected today, you could probably create a supply of LNG pretty quickly, even if 5% of the stuff evaporates by the time you get it to the NE of the US (where it's profit potential is highest). Remember, one of the neat aspects of LNG ships is that they run super-clean because they use the evaporating LNG as the fuel to run their turbine engines.

The biggest issue WRT to LNG is not the supply or the transportation, but rather the cost/profit potential to make it interesting. You can be sure that if a gas shortage develops that all sorts of market mechanisms will jump into place to take advantage of the situation. The market may take a while to adjust itself, but it usually happens.

Witness the many dual-fuel capable industrial boilers and whatnot that allow companies to chose the fuel with the lowest net cost for them at any given time. Then there are the possibilities WRT to modern coal regasification technology... Make the energy expensive enough, and the market will find a solution.

Constantin

IIRC = \"If I recall correctly\"...

... which I evidently may not.