COVE POINT, Md. - Once or twice a week, a tanker unloads millions of gallons of frosty liquid at a terminal on the Chesapeake Bay, bringing to the United States a fuel that many economists believe will help temper energy prices in the coming decades.
For years, liquefied natural gas (LNG) was too expensive. It really was not needed. Even today, there are safety and terrorism worries, exaggerated or not, about shipments of the fuel.
But as growing demand for natural gas outstrips North America's conventional supplies, many experts view imports of LNG as the only way to head off decades of soaring prices for businesses and the tens of millions of households that rely on the fuel for heat and electricity.
... If current trends continue, the United States "by far will be the largest consumer of LNG in the next decade," said Guy Caruso, head of the government's Energy Information Administration. "If we don't have the capacity to bring in the amount of gas we need and domestic supply goes the way we think it will, the clear implication is higher prices," Caruso said.
... Now, the platform built in 1974 and shut down in 1981 unloads a tanker full of imported LNG on average every four days. The cold liquid is piped through a 1.2-mile underwater tunnel to four huge storage tanks. Delivered at minus-260 degrees Fahrenheit, the fuel is warmed and turned back into gas, then shipped over pipelines to mid-Atlantic customers.
A larger tank is near completion, and two more tanks are planned. By 2008, the terminal will be able to handle 1.8 billion cubic feet of imported gas daily, more than double today's volume and enough fuel to serve 6.1 million homes, Dominion spokesman Daniel Donovan said.
... LNG imports still account for less than 3 percent of the 61 billion cubic feet of natural gas used every day in the United States. But LNG's share could grow tenfold in the next 20 years, some analysts predict.
... There is little disagreement about the need to import more LNG. Traditionally, U.S. demand for natural gas has been met almost entirely from pipeline-accessible fields in the United States and Canada. Experts, however, say wells in the Gulf of Mexico are in decline, Canada's production will fall off after 2015, and gas fields in the Rocky Mountain states and Alaska will not meet future demand.
By 2025, the United States is expected to need 31 trillion cubic feet of gas a year, a 38-percent increase, but North American supplies by then will be only 24 trillion cubic feet, 11-percent higher, the government says.
The government projects LNG will account for 20 percent of the gas used by 2025. Some private consulting firms and oil industry estimates put the LNG share as high as 30 percent by then.
"We have not been able to increase gas production for a decade," said energy consultant Daniel Yergin, chairman of Cambridge Energy Research Associates. "U.S. gas productive capacity, like oil, is now in permanent decline."
... Departing Energy Secretary Spencer Abraham foresees trouble for gas users without more LNG. "If we don't have more LNG terminals ... you're talking about huge increases in (gas) prices," Abraham said.The rest of the story
EDIT: It appears conventional natural gas is now in terminal decline on the North American contident. I never figrued AP would run this article, It was also in the Spokesman Review, (Spokane WA paper), on Sunday. Thank god I bought 500 rounds of 7.62x39mm ammunition today.
