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Utilities wonder what’s in their gas future
Switching to affordable, abundant U.S.-produced natural gas for heat and electricity lowers fuel costs and emissions, utility industry officials reminded state regulators this month. But some also noted a nagging worry: The good times for natural gas might not last forever.
“It is the easy choice today, but what about tomorrow,” asked Mark McCullough, executive vice president of AEP Generation, one of the nation’s largest electric utilities, serving 5 million customers in 11 states.
McCullough was among the panelists at the annual winter meeting of the National Association of Regulatory Utility Commissioners Feb. 3-6 in Washington, D.C. Exporting surplus U.S. natural gas overseas was on the discussion agenda.
Stakes are big in Russia-China gas supply talks
Supplying China could be the great prize for future natural gas exporters, including a possible multibillion-dollar LNG project that would liquefy and export Alaska’s North Slope gas.
But an irony of the global gas trade is that Russia – which has enormous but stranded gas reserves in its Far East – is not piping any of it across its southeastern border to the Chinese economic colossus that is thirsting for gas.
The two countries have been in gas-supply talks for 20 years, but a Great Wall separates them: They have been unable to agree on a fair price.
Market will decide volume of U.S. LNG exports, panelists agree
Regardless how many U.S. liquefied natural gas export terminals developers propose, “the competitive international (LNG) market will prove to be a stern disciplinarian,” limiting the number of projects that actually get built, said James Jensen, a Massachusetts-based natural gas global supply-and-demand expert.
“The LNG industry has always had far more proposed projects than will ever see the light of day,” Jensen said at a seminar, “LNG Exports from North America,” at the Russian embassy Jan. 29 in Washington, D.C.
Though panelists talked of market demand, pricing and LNG supply competition in the marketplace, forecasts are what the audience came to hear — especially how much U.S. natural gas might get exported as LNG.
Permitting
Any project as large and complex as a multibillion-dollar natural gas pipeline from Alaska's North Slope will require numerous federal, state and local permits. Agencies have been working with developers on National Environmental Policy Act and permitting efforts for an Alaska gas line project.