Empire On the Edge--Betting On LNG **
Posted by Dave Cohen on January 23, 2006 - 12:15pm
** -- Or, Everything You Wanted Know about LNG but Were Afraid to Ask
Liquified natural gas (aka LNG) involves cooling the gas to minus 160 degrees (Celsius). That shrinks it to about 1/600th of its original volume, allowing significant quantities of this LNG to be loaded aboard tankers for shipment overseas. When the gas reaches its destination at an LNG terminal, the gas is reheated (regasification) and shipped through pipelines to end users.
[ED: Dave's really put together an amazing post here...much to read under the fold.]
Liquified natural gas (aka LNG) involves cooling the gas to minus 160 degrees (Celsius). That shrinks it to about 1/600th of its original volume, allowing significant quantities of this LNG to be loaded aboard tankers for shipment overseas. When the gas reaches its destination at an LNG terminal, the gas is reheated (regasification) and shipped through pipelines to end users.
[ED: Dave's really put together an amazing post here...much to read under the fold.]
As most regular TOD contributors and readers know, the natural gas situation in North America is precarious and getting more so. HO has done a number of posts--for example The problems of natural gas supply-- on this subject over the last couple months spelling out various aspects of the situation. This crisis is due to five related factors.
Note: LNG includes any natural gas regasified in the Bahamas and transported via pipeline to Florida in the future. (see below).
As you can see, LNG imports are expected to surpass pipeline imports from Canada in 2011 while domestic production declines and doesn't surpass 2003 production until 2012. Pipeline imports continue to decline thereafter while LNG imports increase. After 2012, US production increases are expected along with greater LNG imports to make up overall demand shortfalls as shown in the IHS Energy Figure 1 as pipeline imports continue to decrease in that timeframe. Obviously, the North American (and US) supply situation is precarious out to 2012 if the mysterious EIA predictions after 2012 can be trusted. Perhaps they assume increased volumes from unconventional dry gas resources after that date.
The Current LNG Situation
The situation for U.S. Natural Gas Imports and Exports: 2004 (pdf) is shown in this nice graphic plotted from EIA data.
Figure 3. Flow of Natural Gas Imports and Exports, 2004 (Billion Cubic Feet)
As you can see, there are currently only 4 LNG terminals serving the US and these are
The Nitty-Gritty Details About the LNG Future Market
This is the point where this post gets long but what follows also constitutes the most interesting part. A brilliant, thorough and expert examination of the LNG industry, Limited Availability for 'Cheap' LNG to the US, was written back in October of 2004 by Harold York, director of Reliant Industry. Let's summarize that article and state his conclusion first.
As York notes, the world has entered a new era in natural gas pricing. Historically, Henry Hub prices must be above $3/MMBtu to make LNG imports attractive. As of this writing (1/20/06), the Henry Hub spot price is $8.78/MMBtu. So price is no object. However, just as for oil, the LNG supply/demand balance is tight with little or no spare capacity. There are many constraints on importing LNG into the US as listed below.
- Natural gas can be transported globally from place to place using only two methods--via pipelines or by LNG tanker shipments to regasification facilities (LNG terminals). To emphasize this point, there is also what is called Stranded Natural Gas which can only be practically extracted by means of GTL (gas to liquids) technology as stated below.
Reserves of "stranded" natural gas--the stuff that's abandoned because there's no economical way to transport it--come to maybe 2,500 trillion cubic feet. If captured and converted [by a GTL process], the gas would make (after conversion losses) 250 billion barrels of synthetics [liquids], from clean-burning diesel to jet fuel.
However, there is no current large-scale effort being made toward commercially viable GTL operations at this time or in the near term future. - North American domestic production is declining. No matter how many new wells are drilled, declines continue. See Peter Dea's presentation from ASPO-USA (ppt, slides 1 to 10). Slide 5 is similar to Figure 1 (below the fold) while slide 3 asserts that a 63% increase in gas rigs has resulted in a production decline in the US of 2% since January of 2003.
- North America is geographically isolated with respect to imports. Overseas pipelines are impractical.
- US demand for natural gas continues to rise despite increasing supply shortfalls. Including hurricane disasters in the Gulf of Mexico, the price trend continues to rise just as the supply remains flat despite shorter term demand fluctuations due to warmer weather, seasonal adjustments and foreign demand reductions. Since North America is a "stranded" natural gas market, demand reductions overseas don't affect prices in the US much but may make spot LNG imports easier to get. But lack of LNG regasification capacity doesn't change rising prices.
- Storing natural gas reserve stockpiles to mitigate short term shortages is much more technically challenging than maintaining crude oil SPR stock. It is, generally speaking, a matter of maintaining on-demand supply for natural gas via pipeline deliveries as opposed to oil storage. As HO said here
Gas differs from oil in that it is not stored domestically in the same way that oil can be, but instead comes through pipelines with only limited storage capacity.
- deep natural gas
- shale gas
- tight natural gas
- devonian shale gas
- coalbed methane
- gas from depressurized zones
- methane hydrates--a fantasy, of course. I am reminded of Frank Sinatra's song Fly Me To The Moon.
In this story, we'll do an extensive analysis of the current LNG market along with the geopolitics and future problems associated with the ability of LNG to effectively increase future US natural gas supply and lower prices. The situation is very complex and becoming more fluid (no pun intended) as time goes by, so this post runs a bit long. Please bear with us here as we spell out this complicated and evermore worrying situation.
What North America (and the US in particular) is committed to is increased imports of LNG in the future to fill the supply/demand gap. This IHS Energy slide from a talk by Pete Stark entitled Role of Mature Fields in Meeting the Global O&G Supply Problem nicely illustrates the problem and policy.
Figure 1 -- Click to Enlarge |
A second graph using some EIA data from the Annual Energy Outlook 2006 illustrates the forecast for new natural gas supply in the US.
Figure 2 (TCF = trillion cubic feet) |
Note: LNG includes any natural gas regasified in the Bahamas and transported via pipeline to Florida in the future. (see below).
As you can see, LNG imports are expected to surpass pipeline imports from Canada in 2011 while domestic production declines and doesn't surpass 2003 production until 2012. Pipeline imports continue to decline thereafter while LNG imports increase. After 2012, US production increases are expected along with greater LNG imports to make up overall demand shortfalls as shown in the IHS Energy Figure 1 as pipeline imports continue to decrease in that timeframe. Obviously, the North American (and US) supply situation is precarious out to 2012 if the mysterious EIA predictions after 2012 can be trusted. Perhaps they assume increased volumes from unconventional dry gas resources after that date.
What's the Longterm Plan for LNG?
A good but oversimplified view of the current and future LNG situation comes to us from David J. Lynch, a reporter for USA Today (not one of my usual sources, reprinted at mywesttexas.com). Concerning the longer term view over the next 25 years, we learn that
Once global gas trading becomes more commonplace, U.S. natural gas prices should sink.The longer range plan is clear. There will be a build-out all over the world by suppliers to build LNG liquefaction plants just as natural gas consumer nations will carry out a large-scale build-out of LNG terminals for regasification and shipment by pipeline to meet demand. Thus, the natural gas market will eventually more and more resemble the global market for crude oil. It is this globalized plan for natural gas that the US is counting on to alleviate future supply shortfalls.
"As we're able to bring more supply into this country prices will, in fact, be lower," says Stacy Nieuwoudt, an analyst at Pickering Energy Partners in Houston....
As the gap widens between surging demand for natural gas and plateauing production from domestic wells, the scene at Cove Point [Maryland, an LNG terminal] will be repeated around the USA. LNG imports are expected to rise from about 1 percent of total gas usage in 2002 to 15 percent by 2015 and 21 percent by 2025, according to the Energy Information Administration (EIA). That year, total imports are expected to be almost seven times the current figure.
Energy companies have submitted dozens of proposals for new terminals along all three U.S. coastlines to receive the expected shipments, which will give the United States greater flexibility in meeting its energy needs. Dominion is awaiting government approval to almost double Cove Point's capacity by 2008.
"A global natural gas market will evolve to look very similar to the oil market. But it's not going to happen in the next five years. It just takes a lot of time," says Nieuwoudt.
The Current LNG Situation
The situation for U.S. Natural Gas Imports and Exports: 2004 (pdf) is shown in this nice graphic plotted from EIA data.
Figure 3. Flow of Natural Gas Imports and Exports, 2004 (Billion Cubic Feet)
As you can see, there are currently only 4 LNG terminals serving the US and these are
- Cove Point, Maryland (# 209)
- Everett, Massachusetts (# 174)
- Elba Island, Georgia (# 105)
- Lake Charles, Louisiana (# 164)
The Nitty-Gritty Details About the LNG Future Market
This is the point where this post gets long but what follows also constitutes the most interesting part. A brilliant, thorough and expert examination of the LNG industry, Limited Availability for 'Cheap' LNG to the US, was written back in October of 2004 by Harold York, director of Reliant Industry. Let's summarize that article and state his conclusion first.
There is little hope the U.S. is able to import “cheap” LNG into the U.S. as a way to put downward pressure on domestic natural gas prices. Recent trends indicate Henry Hub prices must exceed $3/MMBtu to make it commercially attractive to bring spot LNG cargoes into the U.S. However, given the tight supply/demand balance in the U.S., current U.S. LNG regasification effective capacity is unlikely to deliver incremental volumes sufficient to displace the need for natural gas to price high enough to encourage demand conservation sufficient to balance the market.Importantly, York is referring to the LNG market including only the 2004/2005 timeframe. However, it is reasonable that his assumptions and assertions made in 2004 about LNG constitute a fair characterization of the situation today. Furthermore, until the ecomomic globalization of the LNG market really gets off the ground and these markets evolve to resemble world oil markets--over the next 5 to 10 years--it is plausible that what he says will mostly hold true up to the 2012 period or so. Hold onto your hats, here's a summary of what he says, the nitty-gritty details.
As York notes, the world has entered a new era in natural gas pricing. Historically, Henry Hub prices must be above $3/MMBtu to make LNG imports attractive. As of this writing (1/20/06), the Henry Hub spot price is $8.78/MMBtu. So price is no object. However, just as for oil, the LNG supply/demand balance is tight with little or no spare capacity. There are many constraints on importing LNG into the US as listed below.
- LNG markets are dominated by long term contracts and the tight demand & supply balance in the market. There is a worldwide shortage of LNG liquefaction capacity and, in the US, of LNG regasification capacity.
As long as LNG pricing in Asia and Europe continues to be on an oil basis (crude in Asia and residual fuel oil in Europe), high crude oil prices should prop up delivered prices to all three markets [including the US]....
Spot (shorter term contractual) import volumes are determined seasonally or by foreign demand drops but are generally hard to come by on the world market.
Because of the regulatory structure of European gas markets in the past, regasification developers had the financial ability to back signing long-term firm supply contracts. Demand conditions (e.g., mild weather, slow economic activity) in Asia and Europe play a key role in determining supply availability for the U.S.... [The] demand conditions allowing Europe and Japan to release cargoes for spot sale in the U.S. are typically in the spring and summer. - As York asserts, A Price Diffential is Rarely Sufficient to Divert Cargoes to the US. In shipments to Asia and Europe, where prices have been historically higher than US import prices
There usually were no competing supplies (e.g., no pipelines or indigenous supplies) so a long-term contract did not force the gas marketer to forego other supply options. The project also was selling into a tightly regulated (and physically short) market so delivered LNG prices into Asia and Europe tended to be higher than in the US.... LNG pricing in Asia and Europe continues to be on an oil basis (crude in Asia and residual fuel oil in Europe), high crude oil prices should prop up delivered prices to all three markets [including the US].
Historically, US import prices have been lower than those in Europe (and Asia/Japan) but have surpassed European prices since 1999 for two reasons. 1) Rising US natural gas prices and 2) Reductions in its [Europe's] use of residual fuel oil and so its [natural gas] price relative to crude declines.
However, the most important determinant making spot shipments to the US difficult to obtain is proximity to the LNG production facilites. Quoting York, "the sailing time and shipping costs for liquefaction facilities farther away than Trinidad make spot deals into the U.S. even tighter to fit into firm contract obligations". So, longer LNG transport distances affect the bottom line for LNG exporters. And add to this that there is a worldwide "shortage of spot LNG charter vessels [that] is likely to continue into the foreseeable future". For both these reasons, the Henry Hub price--even if it is attractive to exporters on the spot market--is not sufficient to increase shorter term spot contracts allowing the US to import greater volumes of LNG. So, this is one reason why LNG regasification terminals run at less than so-called nameplate capacity. But this is not the only reason, it gets worse. See the next item #3 below. - Again, as York states, Contractual and Technical Issues Limit Spot Cargoes to US Terminals. There are two main issues here. First, from the contractual point of view, "smaller spot (merchant) players have to work with long-term US [regasification] holders to secure the necessary logistical arrangements to secure short-term [spot market] deals". This often means that these merchants must make contractual arrangements with LNG liquefication operators in foreign countries if they can secure some spot market supply from a tight worldwide market.
But more importantly--this came as a surprise--there are technical constraints on what LNG can be imported to the US.Technical issues surround physical characteristics of an LNG cargo from a specific liquefaction facility to a specific regasification terminal. The heat content of LNG can range between 1,000 and 1,162 Btu per cubic foot (York's Figure 7). High heat content is incompatible with many U.S. appliances and industrial processes. Thus major interstate pipelines have a heat content specification of 1,035 Btu per cubic foot, with a range of plus or minus 50 Btu.
In 2004, the Skikda LNG liquefaction plant in Algeria was damaged by an explosion and fire--these troubles continue there. But the bottom line conclusion is that currently only a few suppliers produce LNG that can be regasified in the few US terminals capable of the processing the liquids. Qatar and Nigeria along with the other suppliers shown in Figure 3 are the only options. And the situation is even worse. Look at this image from York's article.
On a spot basis, only three operating liquefaction facilities (Trinidad and Skikda, Algeria in the Atlantic Basin plus Alaska in the Pacific) produce LNG with a heat content within current U.S. gas pipeline quality specifications. Given that all four U.S. regasification terminals are in the Atlantic Basin and assuming Skikda is not operational, there is about 150 MMcfd of spare liquefaction capacity meeting U.S. natural gas specifications. Nitrogen or air injection processes diluting higher heat content cargoes at Everett and Cove Point allows the inclusion of spare capacity in Nigeria (100 MMcfd) and Qatar (100 MMcfd). So of the 2,200 MMcfd of spare liquefaction capacity in the world, at best 350 MMcfd (15%) could meet current U.S. quality specifications.
What is this chart showing us? First, and importantly, the total nameplate processing capacity of the few existing LNG terminals is contrained by the downstream pipeline send-out capacity coming from the terminals. Otherwise, the problem is that only some LNG liquefaction facilities like Trinidad meet the lower Btu heat content required by the US. The conclusion is that there is little actual spare capacity at existing LNG terminals in the US and these are under-utilized as a result.
Geopolitics And Future Propects
In the The Geopolitics of Natural Gas, Michael Klare (writing for The Nation magazine) lays out a thorough and insightful analysis of the how the world is creating that wide-open, flexible natural gas market that mirrors the world oil market. Everybody is doing deals with everybody. Axis of Evil nations like Iran--with the 2nd largest natural gas reserves in the world--is doing deals with its Asian & Pacific partners. China & India are making deals with anyone it can including, of course, Iran. The US is dealing with Qatar, which has the 3rd largest untapped reserves. As we can see from the text above, dealing with Qatar and other countries like Algeria and Nigeria is critical. These are the countries that can currently supply LNG to the US based on the constraints outlined above in the York article. Supplier countries are starting to build out LNG liquefaction facilities like there's no tomorrow just as consumer countries likr the US and the Asia & Pacific nations embark on expansion of their LNG terminal receiving capacity. The market is expanding and wide-open. There's a lot of information to absorb here, so read Klare's article to get a good handle on the full story.
Beyond the geopolitics of natural gas, the Lynch article (link repeated from above) gives us other reasons for concern especially regarding expanding LNG regasification terminals in the US. Among these concerns are
- There is "local resistence to new LNG terminals [nimby], steep capital (investment) requirements and even a shortage of tanker crews"
- LNG terminals are seen as terrorist targets in this age of paranoia.
- Approved new terminals are being built in the Gulf of Mexico (aka hurricane alley). Others are early on in the licensing process though there are many proposals on the table for building new regasification facilities. However, it is unclear how many LNG terminals will actually get built. Naturally, it takes some years to license, finance and build these LNG terminals given the political, economic and physical contraints involved. Many proposed projects will never come to fruition.
"By setting our future policy, basing it on LNG, then we will be subject to the same forces that we're now subject to in oil supply - in other words, foreign disruptions, political events, growth of the energy sector in Asia," said Rep. Don Sherwood, R-Pa., at a congressional hearing last month.So, given the greater dependence on foreign sources for a very important energy source and all the market & technical difficulties mentioned above in this post, it would appear that depending on LNG to meet the US natural gas demand/supply gap is very risky business and unlikely to be smoothly successful in the future. Congratulations if you've read this post and made it this far. In conclusion, these are the LNG prospects as far as I can see. The facts do not inspire confidence that LNG supplies of natural gas in North America--and particularly in the US--will meet demand in any timeframe we are concerned about. I see many years of hardship as we go forward in time.
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I hope everyone can remember the last scene of Syriana. What they don't show is that an LNG explosion would look like a small atomic bomb going off. Siting them will be a big battle if it's close to major population centers. This is where you find more "survival NIMBY" than "I don't like seein' windmills off in the distance" stupid NIMBY...
have the safest records of any fuel
delivery ship at the moment. We have
never seen a LNG ship explode into
pieces. Because LNG ship accidents
are pretty minor, we do not really
know what happens when a LNG ship
is hit with a bomb like USS Cole
or a tragic accident like Exxon Valdez.
To claim it is too dangerous is without
evidence. What is to say that a major
accident won't just make the ship into
a burning island? Why does it have to
explode and destroy the port and the
people living nearby?
Actually, I have not come across a super
explosion that wiped out nearby buildings
for NG storage facilities. Albeit, they
are mostly underground.
Now they are trying again to put in an LNG terminal at Long Beach, and faced with opposition there they are looking at going about 70 miles up the coast to the Ventura/Oxnard area. The Ventura facility would be built offshore to avoid the fire risk, with an undersea pipeline bringing the gas inland (not sure if it would be liquified or vapor at that point). So far that plan is not exactly being welcomed either. It is a real NIMBY situation, nobody wants to get barbecued.
What about Cleveland in 1941?
incident, but Cleveland incident happen
in 1944. It was not a LNG tanker accident,
but a storage tank not built to specification
due to war effort and shortage of metal.
The new storage tank was not air tight, so
the resultant LNG mixed into the sewage
pipes and exploded killing hundred plus people.
LNG tanks build with 9% nickel has never
display a crack in 35 years of history.
This example was not built to 1941 US gov't
code for proper storage tank. Of course,
accidents will occur if people are not
building according to regulations.
Talking about accidents in US. There are
at least 2 other accidents involving deaths.
None of them involve tanker explosions.
As for Algeria's accident, that didn't cause
a nuclear like explosion. This accident
results in damage similar to refinery plants.
Those things explode, too. None of these
severly damage towns, etc.
The Cleveland incident is the worse one.
Hopefully, today's regulators and inspectos
will do a better job.
FYI: I am not an advocate of LNG. I was
just playing devil's advocate.
What the company representative said, however, contradicts some of what has been written here regarding an LNG tanker explosion.
I have done some quick, online research in the past and what I found out generally confirms what I heard on the TV show. However, I don't claim to be an expert on LNG - so if what I say is crap, please let me know.
LNG in liquid form is not flammable. It needs to be in the range of between 15-25% concentration of the atmosphere/oxygen around it to explode.
In the movie Syriana, the terrorists were using what appeared to be a shaped-charge armor-piercing SRAW anti-tank rocket. This round is fully capable of piercing the outer hull of the tanker. However, I am guessing that there is a gap between the outer hull and either a second hull, or the LNG cooling container within. It is doubtful that this round could penetrate the second wall, having exhausted it's charge on the first.
Even if the rocket did produce a hole in the LNG compartment allowing LNG to escape to the outer atmosphere, that liquid would have to completely regasify and drift into a cloud where the methane was between 15-25%(taking who knows how long) - and then be independently ignited by some other source for there to be an explosion.
Again, this is conjecture based on some things that I have heard and trust. Any contradictory info would be greatly appreciated since this is an issue of national security that deserves full discussion.
What happens next depends on the wind speed and direction. The cold methane will hug the ground; on land it will follow low points like valleys or streets. As it starts to mix with the surrounding air an opaque cloud will form from the condensation of water vapor. How fast it mixes depends on the wind turbulence. You would first get a severe asphyxiation danger from the cloud and then an explosion danger. If the cloud reaches the explosive limit then something like a automobile distributor could set it off.
Question: how much BCF can be on one tanker, and if there was a problem, what is the size that that gas would expand to? In other words, how big is a billion cubic feet of gas in the air? I assume 1 billion cubic feet is 1000x1000x1000 so is a cube the size of three lengths of football fields on each side (per bcf)
probably increasing in future to 200K m3 of tank vol => 4 BSCF
Tanks are thinner towards the top and looks like future tankers will be using aluminum tanks to save weight.
Sandia Labs study classifies a successful terrorist attack on an LNG tanker as a, "Low probability, high consequence event." Radiated heat would be damaging within a 1 mile radius.
That being said, a SRAW (or Short Range Assault Weapon) would be an excellent choice, but a bit of an overkill (and kind of expensive given the price of RPG-7s). The SRAW is American and RPG-7s are cheap, cheap, cheap.
Most hand-held rockets of this type use a shaped charged warhead. If you think of the pointy end of an RPG rocket, this is actually a hollow, copper cone. The explosive behind it is also hollowed out, so there is a cavity. When the warhead explodes, this crushes the copper into a bit of plasma and shoots it forward (This is called the Monroe effect for those still reading).
The average RPG-7 will burn through about 330 mm of steel. The good news is, it will burn through about 330mm of air too once the round explodes. A common defense is to put a grate or something up to make the round explode before it hits the tank. The latest upgrades to the US M-1s have a louver across the back to protect the engine. So long as you have a foot or so for the plasma to burn up, you are good. Reactive armor works in a similar fashion by using an explosion to disrupt the plasma jet. (Friendly infantry don't care for this though).
The bad news is, a rocket can have 'stacked' warheads, so one explodes, disrupts the louvers, and the second one goes through. Another solution is using multiple rockets.
Would an anti-armor rocket work against a LNG tank? I don't know. The insulation between the two tanks would certainly disrupt the plasma jet. However, the explosion will make one hell of a hot spot on the tank and surely crack the tank. I just know I don't want to be there when it happens.
are no longer in short supply. It used to
be until as late as 2004, but because NG
exploration and development are behind
schedule, this is no longer the case.
Also, enough ships are on order where we
will not see any ship issues in the near
term.
For reference, please see this article.
That is not my source because my info is
WallStreetJournal.
http://www.latimes.com/business/la-ft-lng9jan09,1,4862230.story?coll=la-headlines-business
What mean by this is while U.S. shale gas and coalbed methane production have increased significantly, they have only served to slow--and not reverse--the rate of decline of total U.S. gas production.
We are seeing something similar in Canada, where oil from tar sands production year over year is only serving to offset the ongoing decline from conventional Canadian oil production.
The common connection between non-conventional gas and non-conventional oil is that they are both very capital and/or energy intensive, with relatively low rates of production compared to conventional oil and gas.
BTW, a newly opened LNG regasification facility in the UK is also only operating at partial capacity---because of insufficient LNG supplies.
It is akin to a smoker buying more cigarettes, rather than trying to cut back or quit.
Instead of importing LNG we should be reducing our need for NG as well as all fossil fuels. The auto plants that have closed and will close ought to be converted into factories building wind turbines, PV and solar thermal devices, lithium batteries, zinc fuel cells, insulating materials, and numerous other things that keep petrodollars home and create new export opprotunities for US factory workers.
Our energy consumption continues to increase and trade balance soars, as the country goes ever deeper in debt. Less skilled and unskilled jobs are moving overseas, or being filled by immigrant labor. The end result is that there is far less $$ available, from far fewer sources, to pay middle class wages.
It would be nice to see a study that compares the reduction in us ng demand that is in the process of occurring as those chemical consumers that use ng for a feedstock move overseas vs the coming decline in ng production based on hubbert curves.
I have one question. I don't understand why in general nitrogen could not be pumped into a high heat content gas to dilute it.
I understand that some current facilities may not be set up for the nitrogen dilution.
But is there a technical reason why this couldn't be added to all the LNG input hubs?
Example:
The air to gas ratio flow controller makes up the mix to be combusted <usually> using source 1 @ 100% AIR and source 2 @ 100% CH4 GAS.
Let's just say to keep the math easy, we want to burn a mix that will be 50% Air and / 50% CH4, OK?
Let's also say <for same reason> AIR is 30% O2 and 70% N2
I'm no chem engineer, so I'm ignoring the actual combustion product 'cause that's all by molewt and I don't feel like converting volumes to molewt right now, but just for talking purposes... can we assume the above is our max efficiency burn target mixture?
Now what's the mix composition entering the combustion chamber using Air and 100% high BTU LNG?
0.5*30 = 15% O2
0.5*70 = 35% N2
0.5*100 = 50% CH4
With excess N2 to the LNG stream as you suggest to be used to trim BTU content, let's say that takes 10% N2 and 90% L(CH4) to get the LNG into BTU spec compliance.
Now what enters the combustion chamber?
15% O2, 35% N2 + 50% Your Mix = 15% O2, 40% N2, 45% CH4
Note that your mix is high on N2 and short on CH4.
If the combustion mix is what we targeted above, you missed it and you have 5% more N2 entering the combustion chamber which <I think> simply has to come out as NO something not good.
To compensate, you would have to start dicking around with Mother Nature and adjusting the content of the Air, or compound the fuel makeup somehow? If you change the "Air" and add more O2 and reduce N2, you still don't hit the target mix.
Even if a minuscule amount of NO is produced, it's likely will be washed down in rain water and fertilizes plantations on the ground. Not bad at all.
Quantoken
To form significant amounts of NOx, you need an extremely hot flame plus the right set of mass transfer conditions around that flame. Transient combustion phenomena, such as what takes place during the propagation of the flame front in an internal combustion engine seems to encourage the formation of NOx. I believe it's the cyclical heating and quenching that plays an important part in NOx formation.
Since deregulation, new generation and transmission infrasturcture construction has basically stopped. In other words, spot markets provide no incentive to invest.
The LNG situation looks intractable to me. Move somewhere warm (but not texas, they get all their electricity from natural gas these days).
http://www.energypulse.net/centers/article/article_display.cfm?a_id=214
Basically, electricity markets either operate with surplus capacity and therefore no rents, or in physical shortage, with high prices but someone doesn't get the juice they want.
The high prices give a build signal to every player so overbuild results and many lose money. When the overbuild is absorbed with rising demand, outages result and prices skyrocket due to the inelasticity of demand.
It's turning vital real-time infrastructure into a pork belly market - boom or bust.
Let me borrow HO's quiet cough, here, and mutter something about Chevron's Oryx project, with an initial capability of 34000 barrels per day due in 2006, Chevron's Escravos in Nigeria, scheduled to come on line in 2007, Shell's Pearl GTL project in Qatar (scheduled for startup in 2009), and Exxon's Ras Laffan project, also in Qatar in 2011.
offshore oil platforms.
With the introduction of new LNG tankers
with built-in liquification, will this solve
the problem?
I am not saying these tankers exist, but
can possibly be built.
A: Idling transporttaion capacity while the liquifcation equipment fills the tanks.
B: Idle liquification equipment while the tanker is in transit and unloading.
It would be a waste of capital unless the liquification plant on the tanker is used continuously and the tanker is used as a buffer storage for quickly filling regular LNG tankers.
I guess the capital cost still kills the idea untill you reach a fairly large flow of natural gas since you more or less regardless of size needs a lot of technical functions and personell. While you wait for the tank to fill upp to be unloaded on a LNG tanker you loose energy to regasification of the boil off, this gives large losses for low fill rates of large tanks.
My guess is that the best might be to reinject the natural gas and cap the well to come back 10-20-30 years later when the natural gas is worth a lot more.
Then you can probably produce the gas much faster then as a contaminent in the oil flow and can get good capital and operational efficiency for a special production ship with liquification equipment touring old oil wells with saved gas.
But this is only a fairly obvious idea, I do not know if it will work.
I think we're all <myself included> talking BS here, because the actual definition of "STRANDED" gas is that, no matter how you might be able to get it to the surface, store it, transport it or whatever, a market for the stuff is still too far away to get it there and make a profit from its sales value. I mean, that's what they call it "stranded" in the first place.
I thought the problem was oil wells producing economically unusable natural gas along with the oil flow.
The idea was then to spend money and energy on reinjecting the gas into the oil well wich helps with preassurising the well. And then come back at a later date and quickly and efficiently produce the gas with equipment that can be used for draining gas out of manny previously oil producing wells.
This is of unfortunately pure speculation.
Is a mobile ship based LNG liquifaction plant feasible?
Could it make economic sense? Maybe a small fleet of LNG barges to carry the stuff from the ship based plant to land? Perhaps even a trailed pipeline for the LNG (getting a bit unreal there, maybe)?
Thanks for the tech and feasibility info, it sounds (superficially) easier than I expected.
I think another topic is what it will be used for.
If much of it is used for electricity production, as advertised, over 50% of the LNG energy vanishes.
Heating homes is less than 10% energy wasted.
I'm not sure about the numbers for fertilizer, but I bet it's better than LNG to electricity.
Also the NIMBY issue is basically BS, we have 4 proposals here and the developers are advertising in oil and gas mags. because they can't find partners.
The main issue is the worldwide LNG market, which to me does not pencil out. It appears to be a heavily tax-payer subsidized boondoggle. The US has already invested 14 billion in Qatar LNG, not to mention grants for "un-conventional" gas production and tax breaks for pipelines, along with FERC having total control over the placement of LNG facilities.
As pointed out, due to thermodynamic reasons, any electrical generation using a heat engine will necessarily lose 50% or more of its heat input as rejected heat. No easy way around that basic fact. Therefore, from a strictly energy standpoint, it would seem more prudent to use our lowest-value fuel, such as coal, for electrical generation, and save natural gas, a high-value fuel, for domestic heating, fertilizer production, and petrochemicals.
Maybe the rising price of NG will correct this, and maybe what appears to be the growing (though grudging) acceptance of nuclear power plants will also help. But there is still a great deal of inertia in the system to continue generating large amounts of electricity via NG.
Of course we should also use the waste heat from power plants as a heating source. This is still done in NYC.
With a coal-fired power plant at least it's technically and economically feasible to install particulate and SO2 removal systems. But it is absurd to think you can do the same with a coal furnace in your house. So if we go back to coal for a significant amount of home heating, we will have very sooty and acidic air pollution problem. Think Pittsburgh air quality circa 1946.
Here's an article I did detailing the costs of baseload generation from imported LNG vs a comparable output of nuclear power plants:
http://www.energypulse.net/centers/article/article_display.cfm?a_id=623
In fact, our lowest cost fuel, on a $/BTU basis is uranium.
As to the safety of LNG terminals, I will abstain from comment and allow others to research and judge for themselves.
Also, heat content is not they only specification for pipeline gas quality.
Note that the octane number of natural gas will decrease with increasing amounts of ethane, propane, butane, etc which the liquifaction process concentrates. This also affects flame speed. Dilution with N2 doesn't materially affect this and could weakly increase NOX production which is a function of combustion temperature and N2 concentration.
Not only has NO member of the public suffered physical injury but no WORKER inside the plants has suffered radiation sickness or death.
Some one will surely add that the media scared the bejeezus out of millions at Three Mile Island and Karen Silkwood had a one bad auto accident but those are stretches.
As to LNG terminals, I will leave it to others to describe the effects of a 100 kiloton energy equivalent tanker load of liquid methane going up as a pillar of fire inside some harbor near you. I will remind people that that makes for crispy critters at a one mile radius.
Still, I support additional LNG terminals because I think them worth the risk, I think we need the gas, and because there are none proposed in my backyard.
Crispy critters sound almost appetising, but I wouldn't be happy eating the leftovers of a radiation accident party.
Thanks
Europe and Japan (China and India?) will be worst off on the approaching Iranian crisis.
" One aspirant to this royal achievement is a tiny R&D company in Tulsa, Oklahoma called Syntroleum Corp. In 20 years of struggling Syntroleum hasn't made a dime (last year it lost $34.6 million on revenues of $19.2 million). But it says it has refined a gas-to-liquids process to the point that it's now cheap and safe."
I think that if you would want to make (a lot) of money after peak oil you should invest into those companies.
The policy of increasing NGL supplies in the next 10 years (and further out) is fraught with peril.
- If you look at Figure 1 and Figure 2, you can see that there is no immediate relief in sight for increasing dry natural gas supplies to the US in the next decade even if the world plan to open up the natural gas market by means of LNG is reasonably successful. However, this means at least 5 more years of shortfalls in supply.
- Aside from the LNG heat content issues and the accident dangers presented by the LNG terminals or liquefaction facilities themselves, the entire worldwide build-out of both terminals and liquefaction facilities requires large lead times, massive investment and presumes that unfavorable trade agreements or geopolitical events will not disrupt imports. Already, we see that Russia is using natural gas as a weapon. This is a trend that is likely to continue.
- Note that the headline of a Washington Post article I cited above is "Bush Signs Energy Bill, Cheers Steps Toward Self-Sufficiency. You don't have to be a genius to see that a policy designed to increase gas imports via LNG is a policy that is designed to make our foreign dependence on energy and our trade deficits even worse than they already are. I can not emphasize this point enough.
Development of "stranded" natural gas by conversion to GTL using Fischer-Tropsch or some other process to convert dry gas to liquids does not alleviate future US natural gas supply shortfalls but may marginally increase world liquids production. Altering heat content by various means may help increase the supply of gas that can be imported by the US but does not affect how much supply will be available for export in a highly competitive world market. No matter how you slice it, North American natural gas prices will be high and getting higher from here on out.These were the main points I was trying to make when I wrote this post.
LNG is not going to save the US, but is a small piece of the energy puzzle, but LNG backers (I'll say it, Republicans) already have their talking points that LNG will save this country from the upcoming energy crisis...this is very dangerous.
I don't know how many times I have heard this line:
"If it wasn't for NIMBY's and their radical environmentalist buddies, we could import all the LNG we need for decades and wouldn't be forced to subsidize renewable energy."
This whole line is a complete lie. And I hear it on the radio a couple times a week.
Sad part is 40% of the population believes it and it just so happens to be the 40% that make all the choices for the US.
Depressing.
Unless the feds overrule them, which they have. Bush, Junior's regulators have approved building lots of LNG terminals. Which ones are built is going to be an interesting political question.
In-situ tar sand oil takes 1000 cu feet of gas per barrel. 5 million barrels per day could take 5000000 X 1000 X 365 cu feet of gas per year = 1 825 billion cu feet of gas.
Currently the USA imports approx 3 600 billion cu feet of gas per year from Canada. Tar sands would take half of this out.
Will the USA choose the oil or the gas?
to Alberta.
Insanity.
NUCLEAR
Nuff said (NOT).
To make oil from oil sands, you need tons of heat and steam. So power and WATER. Nuclear power answers the heat.
Water? Gonna be hard to come by. Even if you wanted to ramp up production massively using NG, you still need the water.
I've heard many times of the coming New Lake Ontario of Toxic Sludge. But where is all that water gonna come from?