The session I watched was
the 2011 Session # “Supply Outlook for Natural Gas”. This session discussed the current and
forecasted growth of natural gas (NG) relative to that of current and competing
fuels such as coal and shale gas.
In
watching this session, I discovered that coal, despite its perception of
falling by the wayside to NG, is actually the current driver for coal to gas
conversion as it we have an overabundance in the U.S. of coal that is
stockpiled and “has to be” consumed.
Also, with coal and NG have such similar market prices and a likely
overstock of coal as coal-to-NG power plants come online due to EPA regulations,
the industry is looking to export coal overseas, where it can fetch even
greater returns than are currently found stateside.
One
of the questions that came to mind from watching this was what is the
scalability and reliability of NG.
Despite its abundance, there is still a problem of “wet” gas which is NG
that freezes within pipes and is not available to consumer. Beyond this, the outlook for NG exporting was
high as well, although current market understanding relates the volatility and
initial costs to compress and then safely ship NG overseas.
In
looking at the particulars of liquefying NG, I discovered that the gas needs to
be cooled to -260 degrees Farhenheit, which reduces gas down to a liquid that
is 1/600th the volume of when it is in its gaseous state. I also
realized that, not only does a producing nation need to have a liquification
facility, but the receiving nation needs to have a receiving terminal along
with a regasification facility, which can lead to long-term infrastructure
creation and costs (Natgas.info).
The
take home message is that while NG appears to be pushing coal out of the U.S.
market, there are still hurdle to surmount and opportunity for coal prior to
that completely taking place.
Natgas.info. Liquefied
Natural Gas Chain. Natgas.info. http://www.natgas.info/html/liquefiednaturalgaschain.html (accessed 10/21/13).
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