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The reason why your electricity bills are so high and other things to know about LNG

Why have our electricity bills shot up so much? We can blame the creative minds who, several years ago, began processing natural gas into a liquid state and shipping it overseas

Exporting the product known as LNG — liquefied natural gas — opened cheap, plentiful gas available in Texas and Louisiana to the world market, making it less plentiful and cheap. The world’s gas problems became our problems.

RELATED: LNG companies are in a race to the Gulf Coast, where industry sees opportunity during Ukraine war
Much of the world’s electricity is generated from natural gas, which has grown scarce in Europe after the Ukraine war started and Russia began sending less and less gas through pipelines to its western neighbors. Europe suddenly needed a new supplier and the U.S. was a shoulder to lean on
Massive demand for natural gas in Europe is driving up the price of gas here and has sparked a race to build coastal facilities that can process gas into liquid and ship it to Europe and Asia, where gas is playing an important role in that continent’s transition away from dirtier fuels such as coal and fuel oil. 

In Europe, things are getting desperate as temperatures grow cold.

Even the Eiffel Tower is turning its lights off earlier in the evening to conserve energy as the crisis deepens. On Thursday, European officials raised the specter of rolling blackouts this winter as gas supplies needed to fuel the power grid begin to run out. As we saw with our own blackouts last year, they are disruptive and dangerous.
The energy need has lit a fire under the LNG industry and renewed interest in the Haynesville, the gas shale play that straddles Texas and Louisiana. The rig count there has jumped more than 50 percent since January 2020, according to the Energy Department, as producers aim to exploit its proximity to the growing gas export market along the coast. LNG plants have meanwhile maxed out their capacity to super-cool natural gas into its liquid form and pump it into tankers. 

Europe’s demand for LNG is projected to more than double by 2040 if gas stops flowing to Europe from Russia, according to Rystad Energy, noting the U.S. would need significantly more gas to fill the growing gap.
Most cargoes leaving the Gulf are headed for Europe, which is paying a premium borne of desperation.

LNG companies are rolling in dough as the crisis deepens, and they want to make more.

Houston-based Cheniere Energy said it made $741 million during the second quarter after more than doubling its revenue to $8 billion from $3 billion in the same period of 2021.
Cheniere and others aim to tap the growing opportunity by expanding their capacity to process and export gas. Cheniere broke ground Tuesday on its $8 billion expansion project in Corpus Christi, which is expected to come…

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2022-10-10 05:14:12

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