LNG - Liquefied Natural Gas

Oil & Energy Crisis

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LNG Provides an Alternative Supply of Natural Gas

LNG (Liquefied Natural Gas) is natural gas that has been cooled to the liquid state via elaborate cooling operations. The volume of the liquefied natural gas is only 1/600th the volume of the same quantity of gaseous natural gas. This +99 % shrinkage in volume makes it easy to transport long distances via tankers. Once the LNG arrives at its destination, usually some type of marine terminal, a warming operation is necessary to return the liquefied gas to the gaseous fuel state for normal use.

This ease by which LNG can be transported from overseas natural gas-rich countries to energy-poor countries, e.g., the U.S., will make LNG the star fuel for the next few decades as world oil supplies wind down due to the arrival of Peak Oil.

LNG is Not, Technically, an Alternative Fuel. Technically, LNG is not one of the much-desired but never quite developed alternative fuels, e.g., solar energy and windmills. It is just conventional natural gas (mostly methane) in the liquid state. However, most of us tend to speak of LNG as if it is an alternative fuel. And the effect of the liquefied natural gas on our fuel supply is the same as if it were an alternative fuel. It gives us a large quantity of additional fuel that we desperately need as Peak Oil approaches. Lets not quibble with names.

LNG Use is Not New. The use of natural gas as a gaseous fuel is well known, of course. What has not been well known, at least in the U.S., is how common the use of LNG has been in many foreign energy-poor countries such as Japan. Japan gets most of its natural gas supply from LNG.

A dozen or so countries import LNG.

You didn't hear much about LNG in the U.S. up to recently because the U.S. just didn't need it. We still had quite a bit of oil left and we thought we had a virtually inexhaustible supply of natural gas reserves.

Alan Greenspan Comments. LNG offers great hope for the next decade or so but the environmentalists may have to step back to allow its development. I note that Alan Greenspan, on April 5, 2005, made some encouraging remarks:

Forbes Magazine: "Greenspan foresees a rapid increase in international trade of natural gas as Liquefied Natural Gas technology is becoming more competitive rendering new projects economically viable.....As a result of substantial cost reductions for liquefaction and transportation of LNG, significant global trade in natural gas is developing."

Alan Greenspan's comments on LNG were informative. I had not realized such a significant trade in liquefied natural gas existed. In my opinion, the liquefied gas offers a temporary, but one of the best hopes, for holding off the severe effects of Peak Oil until we can get a legitimate national energy strategy in place.

Natural Gas prices are now high enough to justify heavy investment in LNG.

LNG Pertinent Information:

1. The liquefied gas is expensive to transport and, up to now, the amount imported to the U.S. has been limited.

2. LNG has historically usually required offshore terminals to handle the liquefied material, and at this time, only a handful of terminals are in operation in the U.S. Other terminals are planned but their construction in any meaningful number will take years.

3.. LNG is extremely flammable and concerns about its safety in the present world of terrorism abound. For this reason, the material must overcome its susceptibility to terrorist attack. The LNG tankers and storage tanks would make prime targets and, if hit, the ignited material could cause horrendous damage. One estimate is that persons even one mile from such explosions would receive serious burns.

4. LNG is not a cure-all since natural gas is not a renewable resource and, eventually, it too will be depleted. However, it could help bridge the Peak Oil gap while renewable energy resources are being developed.

Stranded Natural Gas for LNG. About one-half the natural gas deposits in the world is "stranded" gas, that is, the gas is located in remote locations where it cannot be easily reached for production and use as conventional gas. Consequently, it is sometimes flared and, thereby, wasted. Much of this stranded natural gas will end up as feed for the LNG process (and eventually for the GTL processes, see alternative energy sources.

Saudi Arabia and Qatar Natural Gas Reserves Available for LNG. Both Saudi Arabia and Qatar have very large reserves of natural gas and both countries are getting into the liquefied natural gas producing business. Qatar, with the third largest natural gas reserves in the world, is being very aggressive in developing an LNG export capability. All together, about a dozen countries are shipping the liquefied gas as an export product.

Iran and Soviet Union Gas Reserves Available for LNG. Soviet Union and Iran rank among the top three countries in natural gas reserves and will no-doubt become leaders in the LNG export business over time.

Four countries in the Atlantic-Mediterranean basin currently producing and exporting liquefied natural gas are Algeria, Libya, Nigeria, and Trinidad.

Where Are the Terminals Located? Although there are 43 LNG terminals in the world, only four are in the U.S. because, as noted above, we only started needed the terminals recently.

The lack of terminals in the US should change quickly. Dozens of terminals are now planned or, at least, hoped for if the permits will go through.

A small environmental problem exists with the off-shore terminals. Cooling water systems used to re-gasify the LNG at offshore terminals when the liquefied gas is ready for distribution into pipelines can be of either the open-loop or closed-loop types. The open-loop uses ocean water in once-through cooling systems. Environmentalists claim that open-loop systems cause major damage to fisheries. And, believe me, my home state of Louisiana is big on fisheries! This controversy is being debated as I write and it appears that the environmentally-friendly closed-loop systems will prevail.

I have no doubt that the environmentalists are, at least, partly correct in their complaints about LNG. Still, do we have a choice? An energy crisis looms and there is, at least temporarily, a surplus of natural gas around the world. Lets use it! The surplus natural gas won't be around long.

Louisiana and LNG. Louisiana is a natural for natural gas. We have the pipelines in place and, eventually, there will be unused carrying capacity available in the pipelines because the native natural gas in the area - onshore and offshore - will be declining as natural gas reserves are depleted.

We have an abundance of deep-sea channels by which the LNG tankers can bring in the liquid gas. We also have an abundance of large abandoned offshore oil and gas platforms that can be converted to terminals (see below).

Louisiana is also a natural for LNG because we have many chemical plants in the state that use natural gas as a feed stock. (Louisiana is the second largest user of natural gas after Texas).

Of course, the fisheries problems (see above discussion) with the open-loop cooling systems have to solved (or compromised) before the terminals can be built.

Another of the problems that has reared its ugly head are the two powerful twin hurricanes of 2005 - Katrina and Rita - that impacted the Gulf of Mexico. The two storms damaged and dislocated a number of offshore platforms.

Will future hurricanes be a problem if the platforms are handling LNG?

LNG Firms Located in Louisiana. Several oil and gas companies are taking advantage of the benefits offered by Louisiana and are seeking to locate terminals either within the state or offshore the state in the Gulf of Mexico. Two of the small firms I am acquainted with are McMoRan Exploration Co., a firm who is converting an abandoned offshore sulfur mining facility to an LNG terminal, and Cheniere Energy, Inc, a firm with multiple interests in four LNG terminals. Also, Southern Union Co. and Sempra Energy are two firms on the fast track for LNG facilities (expanded facilities for Southern Union).

Much larger firms are also keying on the Louisiana location for terminals.

I believe there are dozens of permit applications for LNG terminals on file at the appropriate government agencies in the U.S. A number of these applications are in Louisiana and I believe importing liquefied natural gas will eventually be a big business in Louisiana.

Summary of LNG - Liquefied Natural Gas

The U.S. is beginning to run short of natural gas and imported LNG is going to play a very important role in alleviating the energy crisis. LNG is provides alternative energy from liquefied natural gas.

Last Updated: 05/11/08

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