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Page added on October 4, 2015
Liquefied natural gas to take place of oil, coal?
Now may not be the best time to unveil plans to export liquefied natural gas from the U.S. But don’t tell Charles “Buddy” Roemer.
The former governor of Louisiana will formally announce Monday one of the largest LNG-export proposals in the U.S., at a time when faltering demand for gas in Asia, as well as low prices, threaten the viability of ventures much further along the way than his.
“There may be 40 ahead of us in the world already producing, but there are 30 behind us, and something is happening,” said Roemer, chairman of a Baton Rouge-based G2 LNG. “This will be a powerful industry.”
The company is assembling a project worth nearly $11 billion, which would make it one of the biggest energy undertakings ever in Louisiana. Over 30 years, G2 LNG would export 672 billion cubic feet of LNG annually to China, Europe, the Caribbean and India.
G2 LNG has already made progress on the regulatory front, having obtained approval from the Department of Energy earlier this year to export gas to countries with free-trade agreements with the U.S. Now, it’s awaiting word from DOE on an application to sell to other countries, including China and India, and intends to file soon with the Federal Energy Regulatory Commission for permission to build the necessary facilities.
This comes as leading energy authorities like the International Energy Agency caution that Asia and other markets will be unable to absorb most of the LNG capacity of plants proposed or under construction in the U.S. and elsewhere for the next five years or so. The industry leader in the U.S., Cheniere Energy, plans its first shipments in December from a facility in Louisiana.
But Roemer, a banker as well as Louisiana’s governor from 1988 to 1991 and a congressman from 1981 to 1988, says some energy analysts overlook the long-term potential for LNG demand in the world, especially in light of global concerns over climate change and recognition that gas is a cleaner-burning fuel than coal and oil.
“Natural gas will be the product of the future,” he said in an interview. “It will take the place of coal. It will take the place of oil. It will be a threat to the old empire.”
Moreover, according to Roemer, U.S. LNG will become increasingly appealing in comparison to gas from other, less stable regions of the world, like Russia and the Middle East.
“The thing that’s attractive about America is its consistency,” he said. “It’s the fact that you make a deal and we honor it. It’s not (Russian President Vladimir) Putin. It’s not the Middle East. It’s America, and I think this energy business will be important to America. That’s the reason we started this venture. I know there’s competition. I like that. But the chance to deliver a promise made in America around the world is powerful to me.”
Patriotism aside, Roemer maintained that G2 LNG enjoys competitive advantages compared to some other U.S. export projects. Among them, FERC has already issued a favorable environmental review of the site on the Calcasieu Ship Channel in Cameron County when it was under consideration for an LNG-import operation several years ago. He said should bode well for his project.
Perhaps even more important, G2 LNG owns gas resources in east Texas that it would draw on for exports, giving it flexibility in negotiating contracts with foreign customers, and the firm is looking for more gas acquisitions in Texas and Louisiana.
“We can place a price on it differently than anybody else,” he said.
In short, Roemer maintains that G2 LNG will be well positioned by 2020, when it expects to complete construction of the facilities and begin shipping gas. While he acknowledged that forecasting gas prices is difficult, he said he is sure the market will have absorbed the current surge in LNG exports and will be looking for much more.
“Some people can’t see past their feet,” he said of the caution flags being raised over the number of pending LNG export projects. “Other people know they’re standing on a mountain. I’ve always taken the long view.”
12 Comments on "Liquefied natural gas to take place of oil, coal?"
Kenz300 on Sun, 4th Oct 2015 11:32 am
Wind and solar are the future…….. natural gas is better than coal but it is still bad for the planet……
Climate Change is real….. we need to deal with the cause (fossil fuels)
Listen Up: Pope Calls for the Replacement of Fossil Fuels, Renewable Energy and Solar Subsidies – Renewable Energy World
http://www.renewableenergyworld.com/articles/2015/07/listen-up-pope-calls-for-the-replacement-of-fossil-fuels-renewable-energy-and-solar-subsidies.html
rockman on Sun, 4th Oct 2015 12:26 pm
And once more a reminder that the US consumes slightly more NG then it produces. Yes: the US is a net NG importer. How ever much US LNG is exported the country will have to import the same volume to meet demand. And if it doesn’t a number of US consumers will not get the NG supplies they require.
IOW US consumers will have to compete with the global market place…just as it does today with oil.
BC on Sun, 4th Oct 2015 2:15 pm
Kenz, are you a bot? 🙂
Boat on Sun, 4th Oct 2015 2:53 pm
Rock,
IOW US consumers will have to compete with the global market place…just as it does today with oil.
North America pays a significant cheaper price for Nat gas. What changed and when.
Davy on Sun, 4th Oct 2015 3:08 pm
Boat, don’t you wish there were a function where you could erase dumb comments. I do sometimes myself.
makati1 on Sun, 4th Oct 2015 8:18 pm
BC, I asked that last year. If you read his comments (I quit last year) he seems to parrot the same useless crap every time. Never deviates. Government bot or mentally challenged or both, I think.
BC on Sun, 4th Oct 2015 8:50 pm
mak, 😀
Truth Has A Liberal Bias on Sun, 4th Oct 2015 9:38 pm
I haven’t seem any cropdusters, combines or tractors that run on solar, wind or NatGas. In fact most of it runs on diesel, as does the food transport industry equipment. I’m rather sure we won’t be replacing or retrofitting that equipment any time soon and if we ever do it will be at great cost. Peak Oil IS Peak Food. Dream on dreamers.
rockman on Mon, 5th Oct 2015 6:37 am
Boat – “North America pays a significant cheaper price for Nat gas. What changed and when.” Read my comments more closely: The conditional aspect was “if” the US begins exporting significant amounts of LNG. In that situation the exporters would be competing in the domestic market for NG. If those LNG exporters can pay more for NG then domestic consumers and still make an acceptable profit then they’ll get the NG and not the US consumers.
OTOH I doubt we’ll ever export enough LNG to have much of an impact. OTOOH the US currently exports 92X as much NG via pipelines as it does LNG. Thus the US consumers are already competing to some degree with other countries for our NG production.
Bob Owens on Mon, 5th Oct 2015 2:34 pm
The Ivanpah solar field costs $2.2 Billion and produces about 400 MW. This LNG project will cost $11 Billion or equal to 5 Ivanpah fields. So Louisiana could have 2000 MW or solar power for the next 30 years for the same cost. The power would stay in state and clean the air. No fuel costs. Sounds like the better plan to me. Instead of building a giant LNG plant and shipping our gas to the rest of the world at depression prices we could keep it here for industry. Wake up, America!
ghung on Mon, 5th Oct 2015 3:39 pm
Truth? said: “I haven’t seem any cropdusters, combines or tractors that run on solar, wind or NatGas.”
Diesel engines can be converted to NG/diesel quite easily, or started on diesel and switched to NG.
http://www.farmshow.com/view_articles.php?a_id=1399
That said, I expect we’ll have enough diesel to run our industrial food systems for quite some time. People have got to eat, and hungry people don’t react well. Other sectors may run short, but not agriculture. Then there’s biodiesel which can be blended with petro-diesel, or run as B-100.
It won’t be fuel shortages that challenge industrial food production. Economics, nature and climate/water will be the greater threats.
Davy on Mon, 5th Oct 2015 4:07 pm
While I agree with you G-man I believe fuel shortages are going to create localized problems. Some areas will just be left out. I agree with you on industrial AG being the equivalent to an emergency service. Like G says food is the ultimate commodity and service. I am including potable water in that statements.
I am telling those of you that can and desire it get into agricultural. Any and all kinds especially those that can be adapted all or part to permaculture. This will be a growth industry in a declining economy. As food becomes more precious those involved with its procurement will become more valuable to society. That is investment advice to take to the bank.