Friday, May 27 2022 Sign In   |    Register
 

News Quick Search


 

News


Front Page
Power News
Gas News
Today's News
Yesterday's News
Week of May 23
Week of May 16
Week of May 09
Week of May 02
Week of Apr 25
By Topic
By News Partner
News Customization
Feedback

 

Pro Plus(+)


Add on products to your professional subscription.
  • Energy Archive News
  •  



    Home > News > Gas News > News Article

    Share by Email E-mail Printer Friendly Print

    Experts talk about price, supply of natural gas


    January 26, 2022 - Lisa Dunlap

     

      Two experts on the U.S. liquified natural gas industry have said that U.S. consumers and businesses are being hurt by national policy that encourages exports of LNG to foreign countries, with one saying that the group he represents is asking U.S. Department of Energy officials to develop "safety valve" programs to ensure reasonable prices and supply in this country.

      According to information presented Tuesday during a virtual "Gas Exports Today" presentation, the United States now exports about 10.5% of its LNG supply overseas, compared to 0.7% in 2007.

      The experts for the presentation were Clark Williams-Derry, a financial analyst with the Institute for Energy Economics and Financial Analysis, and Paul Cicio, president of Industrial Energy Consumers of America.

      Cicio said the more accurate percentage is about 15% when considering gas loss at plants, in the field, in pipelines and during other means of transportation. Clark agreed with that conclusion.

      As a result of the significant increases in exports, especially to state-controlled governments and utilities in China or other countries that do not function by free market rules, prices have risen to $3.86 per mmBtu (millions per British thermal unit), when the average price from 2015 to 2020 was $2.65 per mmBtu.

      Foreign countries pay five times to six times that cost, the two men said.

      The problem is, according to Cicio and Williams-Derry, that the situation benefits LNG facilities, but at the cost of U.S. consumers and business, who pay higher prices, especially in wintertime as demand soars, and who could deal with less reliable gas sources.

      The lack of available gas to electric utilities during a massive winter storm in Texas in 2021 led to long blackouts. Some people went days without heat or electricity. Minor disruptions occurred in this part of New Mexico for an hour or two due to cold weather effects on natural gas wells.

      As difficult as higher prices or lower supply could be to households, it is also extremely costly for businesses that rely on gas, not only for electricity, but for other purposes, including as feedstock for fertilizers, plastics or chemicals, Cicio said.

      "If we have to curtail our facilities because of the availability of gas, that costs tens of millions of dollars a day," he said.

      Clark said that about 12 new LNG plants in the U.S. have received at least preliminary permits for construction, which would add to the six already operating and two under construction.

      Cicio said that his group, that represents about 1.8 million workers whose businesses consume natural gas, are asking the Department of Energy to review all future LNG plants to determine if they really serve the public interest, and not just the industry's wants.

      Both Clark and Cicio said that the entire point of increasing foreign exports was to increase prices and that, over time, the U.S. gas price will become tied to the global prices. Clark said that happened in Australia.

      Cicio said his group also has asked that the Department of Energy establish a consumer safety board and implement some sort of "safety valve" process in which LNG supply, demand and prices are constantly evaluated to ensure the stability of U.S. supplies and costs.

      Cicio acknowledged that Energy Department officials have said there will be no bans on LNG facilities, but said that isn't what his group has sought.

      "We haven't used the word 'ban.' What we are saying is, let's have a responsible policy for gas. That should be the core of what we do with natural gas resources. Then, if we are so fortunate to have some excess gas, then we can export some," he said.

      A presentation by LNG industry member Cheniere Energy Inc., based in Houston, Texas, at a virtual conference in November 2021 included the comment that "a rapid rise in U.S. volumes since 2016 has been globally beneficial, driving volume abundance and growing flexibility and liquidity in the LNG trade."

      The company said that the U.S. is now second to Qatar as the largest gas exporter. Its presentation indicated that the global industry could experience some tightening supplies in the next five years, but said the long-term fundamentals of the industry are "robust." His company is projecting an increase in global demand by 200 million tons a year by 2040, from about 500 million tons a year now to 700 million tons a year.

      Lisa Dunlap can be reached at 575-622-7710, ext. 351, or at reporter02@rdrnews.com.

    TOP

    Other Articles - International


    TOP

       Home  -  Feedback  -  Contact Us  -  Safe Sender  -  About Energy Central   
    Copyright © 1996-2022 by CyberTech, Inc. All rights reserved.
    Energy Central® and Energy Central Professional® are registered trademarks of CyberTech, Incorporated. Data and information is provided for informational purposes only, and is not intended for trading purposes. CyberTech does not warrant that the information or services of Energy Central will meet any specific requirements; nor will it be error free or uninterrupted; nor shall CyberTech be liable for any indirect, incidental or consequential damages (including lost data, information or profits) sustained or incurred in connection with the use of, operation of, or inability to use Energy Central. Other terms of use may apply. Membership information is confidential and subject to our privacy agreement.