Theoretically just 2% of the energy contained in the natural gas is required to liquefy it. With current technology and practice between 8 and 10% is required. The latest LNG plants push this figure even lower.
Whether or not LNG arrives in any volume to the US, crude prices will exert pressure on natural gas. In the northeast most homes are heated by fuel oil and many peaking power plants also burn fuel oil. If the relative prices stay where they are, there will be more pressure to switch to natural gas. Much of the US imports of natural gas come from Canada. More gas will be required to operate the steam assisted gravity drainage (SAGD) oil sands. If crude prices remain high, more nat gas will stay in Canada to produce more SAGD, pushing the two prices closer together.
So natural gas is becoming more linked to crude whether or not LNG comes.
Kojiro Vance
of CA
@
Mar 18, 2008 11:25:13 AM
Not quite so wonderful
"It's wonderful—it's much lower in [carbon dioxide emissions]. "
To which I'd add that LNG reduces this advantage due to the energy required to liquefy it.
Kojiro Vance of CA @ Mar 18, 2008 11:25:13 AM
Tom Konrad of CO @ Mar 18, 2008 00:22:41 AM
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