First-Ever Global Glut In Natural Gas Will Slow US Drilling & Encourage Power Plant Developers To Pass Over Coal, Nuclear Fuels
LNG plant on Sakhalin island, Korsakov, Russia. Image credit:IHT, via Sergei Karpukhin/Reuters)
This is a global tale, of LNG freighters bringing vast quantities of natural gas to North America, of US 'NIMP' ("not in my port") protesters bypassed by existing LNG terminals, and of a market-driven end to the "Drill Babies." Much good will come of the global gas glut. For example, as a result of the cheap, easy-access to more natural gas, a future plug-in hybrid fleet for the USA will operate more cleanly. As for the NIMP'ers, perhaps hindsight will better enable a broader understanding of a seminal and very controversial post about this same topic, written back in 2007:- Real Treehuggers Support Adding LNG TerminalsIn 2007 I claimed that:-
Adding enough LNG import capacity in the next few years, combined with a sufficiently-low Federally imposed carbon cap in the US and Canada, could head hundreds of new coal and nuclear generators off at the climate pass*. And, the added LNG could play an important role in the sustainability of hybrid vehicle designs.I stand by that claim.
Even more important, in 2007 I said that:-
We can be fairly certain of this strategic point: the sustainability trade-off between natural gas and coal is a near term issue that has great tactical significance for Congressional representatives considering whether to support a mandatory carbon cap...Hemmed in by higher cost alternatives like mandating C02 sequestration for all new coal-fired plants or instituting a low enough carbon cap, they'll not be able support an effective climate management package if they are prevented from framing their support for it as a reasonable trade-off, given [hopefully] that natural gas will be a low-cost, clean, sustainable energy alternative.I stand by my 2007 analysis and double-underscore its significance for 2009 Congressional politics.
As long as gas supplies are adequate, gas fired generators are easier to permit, far cheaper to build, and vastly cleaner to operate than coal-fired generators* *.
For the Obama Administration, the coincidence of a global gas glut coming at the cusp of a budget crisis is a cool wind at their backs that will help rationalize strong legislation for climate protection.
Thanks to the International Herald Tribune for reporting on this important trend in Supply glut cuts natural gas prices.
The decline in crude oil prices gets all the headlines, but the first globalized natural gas glut in history is driving an even more drastic collapse in the cost of the gas, used to cook food, heat homes and run factories around the globe.
Six giant plants capable of cooling and liquefying gas for export are due to come on line this year, just as the economies of the Asian and European countries that import the most natural gas to run their industries are slowing.
Energy experts and company executives say that means loads of natural gas from Qatar, Egypt, Nigeria and Algeria that otherwise would be going to Japan, South Korea, Taiwan and Spain are beginning to arrive in supertankers in the United States, even though there is a glut of natural gas there, too.
This development only half-way supports the Pickens plan, in that it can help boost the buildup of a compressed natural gas truck fleet, but does nothing for energy security. If the security part is imperative to keep political and investor support alive, the the Plan itself is back on the shelf and will stay there.
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