7 ms·

Boom in American Liquified Natural Gas Is Shaking Up the Energy World

53 points by fhood 9y ago

knz 9y ago
IIRC this was a huge talking point during the 2008 election cycle via https://en.wikipedia.org/wiki/Pickens_Plan https://en.wikipedia.org/wiki/Pickens_Plan (the section on "Peak Gas" is particularly relevant). I'm surprised that the article doesn't even mention this.
desireco42 9y ago
I am not expert in oil and gas markets, but some things in this article doesn't make sense. That Mexico benefited greatly, ecologically from US exports is great. That US exports will diminish the demand for Russian gas and oil, in EU especially and in China/India is ridiculous. Size of how much they are supplying and infrastructure is just several times larger and it isn't likely that US can make a dent. What they are using this as PR push, to make it seem like EU can replace Russian imports with US. I am not sure this is the future of energy, and I see this as a propaganda push more then anything else.
- woodandsteel 9y ago
  Two reasons the story makes sense 1) Russian prices are much higher than production costs because the Russian government gets half its income from petroleum sales. 2) European countries are willing to pay a premium for US gas because they hate how Russia uses European dependency on Russian gas as a political weapon. By the way, you wouldn't happen to be a big Putin fan, would you?
  - desireco42 9y ago
    I must be since I don't see EU countries paying 1.5-2x for gas due to ideological reasons. Prices has nothing to do with capacity, amount that pipelines provide is vastly higher than what can be brought by tankers. By the time EU build ports and tankers, other energy sources will be mainstream and this will not be relevant. Again, in my view, pure propaganda move.
    - woodandsteel 9y ago
      >I must be since I don't see EU countries paying 1.5-2x for gas due to ideological reasons. No, as the article says, the prices are only 20% higher. And again I ask you, are you a big Putin fan?
adventured 9y ago
It's one of the only ways the US can meaningfully trim its trade deficit. China will absorb almost as much as can be shipped to them. The US should be exporting $100-$200 billion in natural gas annually as soon as possible. US oil exports are relatively booming now as well, recently hitting near a record two million barrels per day: https://www.cnbc.com/2017/10/05/us-oil-exports-will-keep-booming-after-hitting-record-analysts-say.html https://www.cnbc.com/2017/10/05/us-oil-exports-will-keep-boo... https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCREXUS2&f=M https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...
- jbob2000 9y ago
  Russia is also a huge natural gas producer, this could be an attempt to destabilize them by flooding the market with one of their big exports.
  - adventured 9y ago
    At a minimum there's definitely demand side diversification, in terms of Europe especially not wanting to not be wholly dependent on Russia. The latest US natural gas boom only began in 2007 and more particularly in 2009-2010. Cheniere Energy's Sabine terminal is what made the new export boom possible (more will come online soon). Prior to them switching that from an import terminal to an export terminal, the US had no practical large-scale export capacity. All this is, is market demand, combined with the US being flooded with natural gas that finally has an export release (with global natural gas prices typically quite higher than the US). I don't see any hints of a master plan to destabilize Russia with LNG exports (besides that it's very unlikely to dent them, if that were the plan the Sabine terminal wouldn't have taken so long). Qatar is the nation that is under most threat from US LNG entering the market and altering the pricing/bidding structure, they've made a vast national fortune off of that not existing (eg China can now use the US LNG supply threat to bludgeon Qatar and others on pricing).
  - tryingagainbro 9y ago
    Couldn't happen to a nicer bunch of blackmailing thugs. Russia overplayed its and and became unreliable--to say the least so alternative were financed out of necessity. https://www.google.com/search?q=russia+gas+winter+cut+off https://www.google.com/search?q=russia+gas+winter+cut+off Let them eat gas.
Animats 9y ago
The downside is that gas fields are depleted relatively rapidly. There's less of a long tail than with oil. Oil wells tend to degenerate into "stripper wells", producing a few barrels a day. The US has about a million of those. Gas drops in pressure and goes dead. See UK North Sea gas.[1] 10 years from peak to bottom. [1] http://www.crystolenergy.com/wp-content/uploads/2016/03/Norway-and-UK-Natural-Gas-Production.jpg http://www.crystolenergy.com/wp-content/uploads/2016/03/Norw...
- Armisael16 9y ago
  Not as big of a downside as it might seem, what with the very rapid rise of solar/wind and storage technology of late. Simple economics are going to make those undeniable in the next 25 years, if not sooner. NG would be excellent as a transitional energy source, I think.
- tynpeddler 9y ago
  I'd like to think that's a feature not a bug. The solar electric revolution finally looks like it's right around the corner, but it's not here yet. LNG has shown up just in time to server as a bridge to solar, allowing the US to lower its carbon emissions while critical solar technologies are still being implemented. It's important though that we move past LNG as solar takes off. The depletion of wells will hopefully increase hydrocarbon costs just in time for them to be outcompeted by solar.
  - losteric 9y ago
    Does LNG have a lower carbon footprint that other fossil fuel energy sources?
    - uncoder0 9y ago
      Yes. About half the CO2 as well as an order of magnitude less NOx not sure on other levels. I'm pretty sure much less CO. IIRC lower levels of byproduct is because LNG is a more pure hydrocarbon than Coal.
    - 9y ago
mamon 9y ago
This is just a wishful thinking. I live in a country that would benefit a lot from alternative sources of gas, but for now LNG from US is just not price competitive with the gas from Russian pipelines (as in: being 50-75% more expensive). Funny thing is, that during his visit, president Trump announced that he plans to increase LNG price further.
- adventured 9y ago
  US LNG is about 20% more expensive than the typical European gas price. With US domestic prices closer to $3, versus $5 in Europe, the US will be able to further narrow that gap with scale and more terminals (on both sides of the transaction). Then you factor in the willingness of Europeans to pay a small mark-up to not be so dependent on Russian energy supply. (from August) "Currently, the US gas price is about $2.85 per MMBTU, a measure of energy content in fuel. This rises above $6 after factoring all the associated fees for shipping, liquefication and gasification, according to Gazprom estimates. This compares with about $5 per MMBTU in much of the European market, where Gazprom accounts for about a third of supply." https://www.ft.com/content/352f4cac-6c7a-11e7-b9c7-15af748b60d0 https://www.ft.com/content/352f4cac-6c7a-11e7-b9c7-15af748b6...
  - notfromhere 9y ago
    Transport via boat is just not going to beat direct pipe access from siberia
    - saryant 9y ago
      Unless those pipelines were cut off. Energy and geopolitics are practically the same thing.
    - adventured 9y ago
      No doubt. Fortunately it doesn't have to. The US doesn't need to beat Russia's lowest pipeline price, it needs to get near the European average price. Russia needs to yield a fat profit on their exports, which is one reason why Europe's gas prices are so much higher than the US domestic prices to begin with. The financing of their government and their economy in general are both heavily dependent on that. Russia isn't going to be willing to drop prices much, while the US exporters will look at every possible means to drive down their costs and pricing (they can afford a much slimmer margin than Russia can on its exports). Russia has 1/3 the natural gas market in Europe. It's unlikely they're going to grow that market position (which is why they're looking east for growth), their customers do not want to be more reliant on them. As Europe shuts down coal, it's going to be replaced by natural gas and renewables; most of that natural gas will be from sources other than Russia (meaning: Qatar, Australia, US, etc).
mrfusion 9y ago
I’d be interested in the physics of turning it into a liquid and maintaining it. Does anyone want to give us a lesson?
- ISL 9y ago
  Take it to high-enough pressure while keeping it at room temperature, and it will liquify.
  - philipkglass 9y ago
    Pressure alone is sufficient only when the substance is below its critical temperature. The critical temperature for methane is 190.6 K, some 107 degrees below room temperature. Gases that are highly compressed above their critical point form a supercritical fluid, which can have liquid-like density but does not have a defined volume. LNG is a true liquid, stored at cryogenic temperatures and low pressure.
  - simbas 9y ago
    No. It is not practical to liquify by compression. See: https://www.youtube.com/watch?v=QgtSoEJD9HE https://www.youtube.com/watch?v=QgtSoEJD9HE It seems it's hard to liquify by pressurisation.
- tim333 9y ago
  The basics of it is squash a gas and it gets hot. Let cool then expand and it gets colder. Keep going till -160C and you have liquid gas. More details here here https://www.youtube.com/watch?v=QgtSoEJD9HE&feature=youtu.be&t=46s https://www.youtube.com/watch?v=QgtSoEJD9HE&feature=youtu.be...
theyregreat 9y ago
Using even more fossil fuels is a nonstarter because CO2 levels aren’t leveling off, much less going down. Only consistent, severe international economic incentives and disincentives can motivate rapid deployment of renewables to hold-out / recalcitrant countries, of which there are many, at present. It’s absolutely vital for the species’ survival. To do otherwise is stupidity, insanity or both.
- krrrh 9y ago
  What if moving baseline energy from coal to LNG is a greater net reduction in carbon intensity per unit of energy than moving LNG to wind and solar? If you look at the stats on CO2 tonne equivalents from the DoE, the US has been way out front in meeting what were supposed to be its Kyoto and Paris targets. The stats on CO2 equivalents per unit of GDP are even more impressive. Germany has been heading backwards because their insistence on abandoning working nuclear baseload has increased their need to burn coal, despite their significant investments in solar and wind.
- irrational 9y ago
  Fortunately the quickest way to get people to agree with you is to call them stupid and insane. You should become our spokesperson.
  - fhood 9y ago
    Wait I thought the quickest way to get people to agree with you was to blame immigrants?
    - KekDemaga 9y ago
      I never thought about it before but wouldn't bringing more people into the first world increase global carbon output?
      - YSFEJ4SWJUVU6 9y ago
        A shunned upon line of thought on HN, it seems.
raarts 9y ago
The reason for the diminishing gas production in the Netherlands (briefly mentioned in the article), is that the government every year shrinks the allowed production maximum, due to the damage done by an increasing number of earthquakes.
rotrux 9y ago
FAKE NEWS. Kidding! This (+ the other hydrocarbon supply-flood from Canadian oil-sands) has been happening for ~a year now; anyone noticed that gas has been weirdly cheap for the last few months? CONSPUUURRICY: This is how we('MURRICA) have relatively-recently managed to screw-over the economies of Venezuela, Russia, & all OPEC countries...to name a few of the geo-pol bigguns.
- sctb 9y ago
  Could you please not post like this? A quick pass through the guidelines will give you plenty reasons not to post such a comment. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - rotrux 9y ago
    Well thanks for being polite about it. I lost like 10 points over this lil' tidbit so point taken. I promise to try.

53 points by fhood 9y ago

knz 9y ago

IIRC this was a huge talking point during the 2008 election cycle via https://en.wikipedia.org/wiki/Pickens_Plan https://en.wikipedia.org/wiki/Pickens_Plan (the section on "Peak Gas" is particularly relevant). I'm surprised that the article doesn't even mention this.

desireco42 9y ago

I am not expert in oil and gas markets, but some things in this article doesn't make sense. That Mexico benefited greatly, ecologically from US exports is great. That US exports will diminish the demand for Russian gas and oil, in EU especially and in China/India is ridiculous. Size of how much they are supplying and infrastructure is just several times larger and it isn't likely that US can make a dent. What they are using this as PR push, to make it seem like EU can replace Russian imports with US. I am not sure this is the future of energy, and I see this as a propaganda push more then anything else.

woodandsteel 9y ago
Two reasons the story makes sense 1) Russian prices are much higher than production costs because the Russian government gets half its income from petroleum sales. 2) European countries are willing to pay a premium for US gas because they hate how Russia uses European dependency on Russian gas as a political weapon. By the way, you wouldn't happen to be a big Putin fan, would you?
- desireco42 9y ago
  I must be since I don't see EU countries paying 1.5-2x for gas due to ideological reasons. Prices has nothing to do with capacity, amount that pipelines provide is vastly higher than what can be brought by tankers. By the time EU build ports and tankers, other energy sources will be mainstream and this will not be relevant. Again, in my view, pure propaganda move.
  - woodandsteel 9y ago
    >I must be since I don't see EU countries paying 1.5-2x for gas due to ideological reasons. No, as the article says, the prices are only 20% higher. And again I ask you, are you a big Putin fan?

adventured 9y ago

It's one of the only ways the US can meaningfully trim its trade deficit. China will absorb almost as much as can be shipped to them. The US should be exporting $100-$200 billion in natural gas annually as soon as possible. US oil exports are relatively booming now as well, recently hitting near a record two million barrels per day: https://www.cnbc.com/2017/10/05/us-oil-exports-will-keep-booming-after-hitting-record-analysts-say.html https://www.cnbc.com/2017/10/05/us-oil-exports-will-keep-boo... https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCREXUS2&f=M https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

jbob2000 9y ago
Russia is also a huge natural gas producer, this could be an attempt to destabilize them by flooding the market with one of their big exports.
- adventured 9y ago
  At a minimum there's definitely demand side diversification, in terms of Europe especially not wanting to not be wholly dependent on Russia. The latest US natural gas boom only began in 2007 and more particularly in 2009-2010. Cheniere Energy's Sabine terminal is what made the new export boom possible (more will come online soon). Prior to them switching that from an import terminal to an export terminal, the US had no practical large-scale export capacity. All this is, is market demand, combined with the US being flooded with natural gas that finally has an export release (with global natural gas prices typically quite higher than the US). I don't see any hints of a master plan to destabilize Russia with LNG exports (besides that it's very unlikely to dent them, if that were the plan the Sabine terminal wouldn't have taken so long). Qatar is the nation that is under most threat from US LNG entering the market and altering the pricing/bidding structure, they've made a vast national fortune off of that not existing (eg China can now use the US LNG supply threat to bludgeon Qatar and others on pricing).
- tryingagainbro 9y ago
  Couldn't happen to a nicer bunch of blackmailing thugs. Russia overplayed its and and became unreliable--to say the least so alternative were financed out of necessity. https://www.google.com/search?q=russia+gas+winter+cut+off https://www.google.com/search?q=russia+gas+winter+cut+off Let them eat gas.

Animats 9y ago

The downside is that gas fields are depleted relatively rapidly. There's less of a long tail than with oil. Oil wells tend to degenerate into "stripper wells", producing a few barrels a day. The US has about a million of those. Gas drops in pressure and goes dead. See UK North Sea gas.[1] 10 years from peak to bottom. [1] http://www.crystolenergy.com/wp-content/uploads/2016/03/Norway-and-UK-Natural-Gas-Production.jpg http://www.crystolenergy.com/wp-content/uploads/2016/03/Norw...

Armisael16 9y ago
Not as big of a downside as it might seem, what with the very rapid rise of solar/wind and storage technology of late. Simple economics are going to make those undeniable in the next 25 years, if not sooner. NG would be excellent as a transitional energy source, I think.
tynpeddler 9y ago
I'd like to think that's a feature not a bug. The solar electric revolution finally looks like it's right around the corner, but it's not here yet. LNG has shown up just in time to server as a bridge to solar, allowing the US to lower its carbon emissions while critical solar technologies are still being implemented. It's important though that we move past LNG as solar takes off. The depletion of wells will hopefully increase hydrocarbon costs just in time for them to be outcompeted by solar.
- losteric 9y ago
  Does LNG have a lower carbon footprint that other fossil fuel energy sources?
  - uncoder0 9y ago
    Yes. About half the CO2 as well as an order of magnitude less NOx not sure on other levels. I'm pretty sure much less CO. IIRC lower levels of byproduct is because LNG is a more pure hydrocarbon than Coal.
  - 9y ago

mamon 9y ago

This is just a wishful thinking. I live in a country that would benefit a lot from alternative sources of gas, but for now LNG from US is just not price competitive with the gas from Russian pipelines (as in: being 50-75% more expensive). Funny thing is, that during his visit, president Trump announced that he plans to increase LNG price further.

adventured 9y ago
US LNG is about 20% more expensive than the typical European gas price. With US domestic prices closer to $3, versus $5 in Europe, the US will be able to further narrow that gap with scale and more terminals (on both sides of the transaction). Then you factor in the willingness of Europeans to pay a small mark-up to not be so dependent on Russian energy supply. (from August) "Currently, the US gas price is about $2.85 per MMBTU, a measure of energy content in fuel. This rises above $6 after factoring all the associated fees for shipping, liquefication and gasification, according to Gazprom estimates. This compares with about $5 per MMBTU in much of the European market, where Gazprom accounts for about a third of supply." https://www.ft.com/content/352f4cac-6c7a-11e7-b9c7-15af748b60d0 https://www.ft.com/content/352f4cac-6c7a-11e7-b9c7-15af748b6...
- notfromhere 9y ago
  Transport via boat is just not going to beat direct pipe access from siberia
  - saryant 9y ago
    Unless those pipelines were cut off. Energy and geopolitics are practically the same thing.
  - adventured 9y ago
    No doubt. Fortunately it doesn't have to. The US doesn't need to beat Russia's lowest pipeline price, it needs to get near the European average price. Russia needs to yield a fat profit on their exports, which is one reason why Europe's gas prices are so much higher than the US domestic prices to begin with. The financing of their government and their economy in general are both heavily dependent on that. Russia isn't going to be willing to drop prices much, while the US exporters will look at every possible means to drive down their costs and pricing (they can afford a much slimmer margin than Russia can on its exports). Russia has 1/3 the natural gas market in Europe. It's unlikely they're going to grow that market position (which is why they're looking east for growth), their customers do not want to be more reliant on them. As Europe shuts down coal, it's going to be replaced by natural gas and renewables; most of that natural gas will be from sources other than Russia (meaning: Qatar, Australia, US, etc).

mrfusion 9y ago

I’d be interested in the physics of turning it into a liquid and maintaining it. Does anyone want to give us a lesson?

ISL 9y ago
Take it to high-enough pressure while keeping it at room temperature, and it will liquify.
- philipkglass 9y ago
  Pressure alone is sufficient only when the substance is below its critical temperature. The critical temperature for methane is 190.6 K, some 107 degrees below room temperature. Gases that are highly compressed above their critical point form a supercritical fluid, which can have liquid-like density but does not have a defined volume. LNG is a true liquid, stored at cryogenic temperatures and low pressure.
- simbas 9y ago
  No. It is not practical to liquify by compression. See: https://www.youtube.com/watch?v=QgtSoEJD9HE https://www.youtube.com/watch?v=QgtSoEJD9HE It seems it's hard to liquify by pressurisation.
tim333 9y ago
The basics of it is squash a gas and it gets hot. Let cool then expand and it gets colder. Keep going till -160C and you have liquid gas. More details here here https://www.youtube.com/watch?v=QgtSoEJD9HE&feature=youtu.be&t=46s https://www.youtube.com/watch?v=QgtSoEJD9HE&feature=youtu.be...

theyregreat 9y ago

Using even more fossil fuels is a nonstarter because CO2 levels aren’t leveling off, much less going down. Only consistent, severe international economic incentives and disincentives can motivate rapid deployment of renewables to hold-out / recalcitrant countries, of which there are many, at present. It’s absolutely vital for the species’ survival. To do otherwise is stupidity, insanity or both.

krrrh 9y ago
What if moving baseline energy from coal to LNG is a greater net reduction in carbon intensity per unit of energy than moving LNG to wind and solar? If you look at the stats on CO2 tonne equivalents from the DoE, the US has been way out front in meeting what were supposed to be its Kyoto and Paris targets. The stats on CO2 equivalents per unit of GDP are even more impressive. Germany has been heading backwards because their insistence on abandoning working nuclear baseload has increased their need to burn coal, despite their significant investments in solar and wind.
irrational 9y ago
Fortunately the quickest way to get people to agree with you is to call them stupid and insane. You should become our spokesperson.
- fhood 9y ago
  Wait I thought the quickest way to get people to agree with you was to blame immigrants?
  - KekDemaga 9y ago
    I never thought about it before but wouldn't bringing more people into the first world increase global carbon output?
    - YSFEJ4SWJUVU6 9y ago
      A shunned upon line of thought on HN, it seems.

raarts 9y ago

The reason for the diminishing gas production in the Netherlands (briefly mentioned in the article), is that the government every year shrinks the allowed production maximum, due to the damage done by an increasing number of earthquakes.

rotrux 9y ago

FAKE NEWS. Kidding! This (+ the other hydrocarbon supply-flood from Canadian oil-sands) has been happening for ~a year now; anyone noticed that gas has been weirdly cheap for the last few months? CONSPUUURRICY: This is how we('MURRICA) have relatively-recently managed to screw-over the economies of Venezuela, Russia, & all OPEC countries...to name a few of the geo-pol bigguns.

sctb 9y ago
Could you please not post like this? A quick pass through the guidelines will give you plenty reasons not to post such a comment. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- rotrux 9y ago
  Well thanks for being polite about it. I lost like 10 points over this lil' tidbit so point taken. I promise to try.