New Page 1
North American LNG 2006: Market & Regas Technology Analysis
This study explores the development of the US LNG market and its increasingly
important role for America’s energy security. The study also considers other
issues and provides a detailed evaluation of new offshore regas technologies
Additional Information
EXECUTIVE SUMMARY
North America, and in particular the US, requires additional sources of energy
to meet expected increases in demand over the decades to come. While it is
commonly known that the US has imported the majority of its crude oil for some
time, it is a lesser known fact that US natural gas production has been unable
to keep pace with domestic demand and that incremental increases in natural gas
imports from Canada are not expected to offset future demand growth.
Such market fundamentals, in addition to recent price increases, create a
favorable environment for increased imports of LNG - which, during 2004,
amounted to 652 Bcf, roughly half the expected future demand. However, greater
reliance on LNG is stymied by the lack of sufficient capacity at US
regasification terminals. Only five such terminals are currently operation in
the US and regulatory hurdles and opposition from both public and private bodies
has hindered the construction of additional regasification infrastructure.
The US LNG market underwent a fundamental change when in August 2005, President
George W. Bush signed the Energy Policy Act. This Act clarified the Federal
government’s role in the siting and operation of onshore and near shore LNG
import terminals and gives the FERC the ultimate authority over states on LNG
issues.
By the end of 2005, the FERC had approved twelve LNG terminals and the US Coast
Guard had approved two. Most of these proposed LNG terminals will be sited in
the Gulf of Mexico, causing relatively little opposition from a region already
accustomed to abundant petroleum industry infrastructure. Twenty more facilities
are currently proposed, twelve under the authority of the FERC and the eight
offshore under the authority of the Coast Guard.
To facilitate the importation and regasification of LNG there has been a rapid
expansion in the range of alternative offshore LNG importation methods. These
new methods are expected to compete with conventional onshore regasification
terminals.
The catalyst for alternative, offshore LNG regasification centers on several
issues and concerns shared by individuals, communities and governments. These
can be broadly defined as:
- Environmental
- Security and safety and
- Regulatory.
