Center for Liquefied Natural Gas Discusses New Market Dynamics

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At a briefing on new liquefied natural gas market dynamics, the Center for Liquefied Natural Gas (CLNG) emphasized that unless the United States builds necessary infrastructure to import natural gas, it will be at a competitive disadvantage as the global market for natural gas becomes increasingly crowded.

As worldwide demand for natural gas grows, the United States faces stiff competition for a product it badly needs. At a recent briefing focusing on the new market dynamics of liquefied natural gas, the Center for Liquefied Natural Gas (CLNG) stressed the United States will be at a competitive disadvantage for the product unless new terminals are built to import natural gas from around the world.

According to the United States Energy Information Administration (EIA), natural gas consumption is expected to continue to rise around the globe. Demand will grow not only in the key gas markets, but also in markets that historically have not been major natural gas consumers such as China and India. EIA predicts that annual natural gas consumption will grow in China by 6.8 percent and in India by 5.9 percent. Much of the gas that enters these markets will be imported from around the world in the form of liquefied natural gas (LNG).    

In the United States, domestic supplies of natural gas are no longer meeting demand, and Canadian imports are declining. EIA predicts that U.S. consumption will outpace production so that by 2030, there will be a 21 percent gap between supply and demand.    

That means that the U.S. will have to compete globally for an increasing share of the LNG market in the years to come.

There are over 40 proposals to build new LNG import terminals in the United States, but the industry has met with state and local opposition to many of them.

"Currently there are five LNG import facilities in the United States, and that's not nearly enough capacity to allow us to compete in the global market we have," said CLNG Executive Director Bill Cooper.

During the briefing, Federal Energy Regulatory Commissioner Suedeen Kelly discussed challenges facing industry in coming years as it works to build new terminals, including local opposition. She emphasized that educating communities about the need for the terminals is critical, adding that lot of people simply don't understand the underlying tight supply-demand situation and how precarious it will continue to be if no action is taken.

Other opponents have called for an increase in renewable energy use and energy conservation instead of increasing LNG imports. But this won't be enough to offset the need for more LNG imports. "The numbers just aren't there," said panelist David Manning, executive vice president of KeySpan, to support the contention that conservation and renewables can completely counter growing demand for natural gas. Manning said KeySpan, the largest distributor of natural gas in the Northeast and the largest local distribution company owner/operator of LNG storage in North America, has "some of the best conservation programs in the gas industry."

To hear a replay of the briefing, contact Breanne Reynolds at 202-828-8849.

About CLNG

CLNG is a coalition of 60 LNG producers, shippers, terminal operators and developers, energy trade associations and natural gas consumers. Its goal is to enhance public education and understanding about LNG by serving as a clearinghouse for LNG information. For more information, visit http://www.lngfacts.org

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