Posted on 08/29/2006 7:00:18 AM PDT by kellynla
NEW YORK (CNNMoney.com) -- An estimated $30 billion a year is pouring into developing liquefied natural gas.
Despite concerns over the safety and the cost of importing it, analysts say the fuel will make up a larger and larger share of America's energy mix and may help prevent seasonal natural gas price spikes.
With high natural gas prices in the United States, some ask whether LNG, which is more expensive to bring to market, can be a long-term competitor to regular natural gas, dollar for dollar.
Sheraz Mian, an energy analyst at Zacks Investment Research, paints the LNG challenge this way: "Will natural gas prices remain high enough for these types of projects to earn the returns investors are looking for?"
Exxon Mobil (Charts), not a company known for taking chances on unproven technologies, is betting $14 billion they will.
Why all the hype? Creating LNG involves cooling normal natural gas to 260 degrees below zero Fahrenheit, sending it around the world in superinsulated ships and then re-gasifying it at its destination.
"It's one of the biggest investment trends in the world," said David Talbot, with the energy research firm John H. Herald. "That's what's happening. We're going increasingly from crude oil to natural gas."
The reasons for the boom are primarily twofold.
The first is that the United States is using more and more natural gas because it's both cleaner burning than oil and economical.
Exxon estimates America's consumption of natural gas will rise from 65 billion cubic feet per day (bcfd) currently to 85 bcfd in the next 10 years. But domestic production of natural gas will only increase from about 55 bcfd today to about 60 bcfd.
(Excerpt) Read more at money.cnn.com ...
lets try some numbers, these prices from memory,
so the may have changed a little
price of spot NG, 7 USD per million-btu.
price of wholesale gasoline,
Europe, 2 USD per gallon
U.S., 2.30 USD per gallon
gasoline, 120,000 btu per gallon
U.S. gasoline, 19.16 USD per million btu
rather unfortunate, that Americans are too stupid
to use NG in cars
Plus LNG is cleaner burning too......guess the polis of The Hill are in the hip pocket of BIG OIL?
Been tried years ago, even GM had some commercial vehicle conversions. Only thing though is people don't much like driving around with a 3,000 PSI bomb of natural gas in their trunk. Big, big problems when they go 'bang'.
"Natural gas vehicles are just as safe as today's conventional gasoline and diesel vehicles. They use pressurized tanks, which have been designed to withstand severe impact, high external temperatures, and environmental exposure."
http://www.eere.energy.gov/afdc/afv/gas_vehicles.html
The numbers you use don't include the cost of conversion to LNG.
The development of LNG should allow shipping of gas to ports of convenience that pipelines cannot. This is especially good for Russia since they can then market their natural gas worldwide, and equally important for isolated markets such as island nations. For pipelines, $2.50 is the breakeven price, but for LNG it would be something higher. At $7 there is evidently enough profitability to encourage LNG investment in selected markets.
GM dropped their program for this very reason.
Do you believe everything your govenment tells you?
This CNG deal was bad from the get-go and the industry found that out.
If I remember correctly a bus in Houston that had CNG fuel system went off with a big bang and it was nasty.
"Do you believe everything your govenment tells you?"
nooooooo...
but I give those who have researched, tested and documented the results more credibility than I give some anonymous source on FR who has not referenced any rebuttal. LOL
It's not the safety concerns that people had. No one could figure out where to fill up! And little old ladies were nervous about the fill-up procedure when they did find a station.
my post was somewhat off-topic
....................
my point is that NG is ideal vehicle fuel.
unless you are a gov't official in Germany or California,
in which case your are concerned that the gov't will collapse
because of lack of gasoline tax.
ditto for electric cars
We need coal conversion not going deeper into debt to foreigners to buy LNG
Coal conversion will yield diesel/jet fuel and heating oil
It is not about being cheap or expensive. It is about creating a world market for natural gas.
I am for any and all sources of energy.
Ethanol, NG, biodiesel, nuclear as well as oil;
and the sooner we get off the foreign oil addiction the better
"You still have to get it here by tankers` It's still venerable to Terrorists and evil third world countries."
and oil, tankers & piplines aren't?
Just not as easy.
IIRC when I worked at the Chrysler dealership, they had flex fuel vehicles that would run on LNG & Gasoline... Government agencies would run these...At the time LNG was pretty cheap.
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