By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
By Raillan Brooks
The U.S. is not in a position to produce more gas on its own, save for possible new wells on the eastern front of the Rockies. Greater production in Alaska is unlikely. Imports are probably the key to increased supply. There is considerable gas in the Canadian Arctic, but transporting it by pipeline down through Canada and into the U.S. Midwest would entail building a long and expensive pipeline. It would also require approval by the Canadians. Since we dominate their petroleum industry, we've never paid much attention to their interests, but the export of vital energy supplies will touch a raw nerve, and approval of a new pipeline can't be taken for granted.
Getting more gas will depend on expanding the liquefied natural gas (LNG) industry, which takes gas at a wellheadsay, in Algeriafreezes it into a liquid, pumps it into special tankers, and transports it to the U.S., where it is run through another apparatus to unfreeze it and put it into pipelines. Currently the LNG business primarily services South Korea, Japan, and Taiwan. Increases in imports will mean building huge new projects up and down the East Coast and signing long-term contracts for the actual gas somewhere abroad. The LNG facilities will take four to five years to build, and the gas contracts usually run to 20 or 25 years.
Potential sources are Iran (which we don't deal with) and Qatar, which has suspended some production and taken other production away from ExxonMobil and given it to the French firm Total. The future of Russian reserves is complicated because of business scandals that have debilitated the industry. There is considerable gas in the Caspian Sea region, notably in Turkmenistan, but China is building a pipeline into that area, and other pipelines from Central Asia go west toward end markets in Europe. As other nations shift to gas for space heating, the U.S. will face growing competition from Western European countries, notably Spain and France, along with Japan, Mexico, and China, which will soon be the biggest energy market in the world.
There are other obstacles: The U.S. is far away from sources of gas, which means the transportation costs are high. In the past there were serious questions raised about the safety of LNG tankers, and as a result they are heavily guarded because of susceptibility to terrorists.
Worst of all, the anticipated rise in costly LNG dries up potential funding for research into alternative energy sources.
We seem forever doomed to a future of more oil, and most probably rationed oil at that.