Energy executives claim that despite the incredibly low petrol costs currently in place, they are placing their money on a wave of new LNG plants that will increase demand for the fuel and drive up prices.
This year, the price of natural gas has dropped by one-third due to a milder winter, disruptions at LNG facilities, and higher than anticipated supply. The prognosis for future gas demand has also been hampered by the rise in solar and wind power as well as the suspension of further evaluations of US LNG export permits.
According to Chad Zamarin, a senior vice president of gas pipeline operator Williams Cos., "domestic U.S. markets are oversupplied."
"It will certainly take some time for LNG coming out of the U.S. and a bit of a slowdown in supply to rebalance," said Zamarin, speaking on the sidelines of the CERAWeek energy conference in Houston.
Due to an abundance in West Texas, which is home to the largest oilfield in the United States, prices for the fuel this week were minus 26 cents per million British thermal units (mmBtu), forcing petrol makers to pay someone to take it. The average price of petrol in the United States was $1.66 per mmBtu on Friday, which is 74% less than it was in 2022.
We are at capacity with our pipeline infrastructure. It will be extremely challenging for us to link markets, according to Toby Rice, CEO of EQT Corp., the biggest gas producer in the United States. To develop more lines, he said, modifications to permission are required.
In order to export the gas that is currently clogging the West Texas pipelines and provide steady electricity as solar and wind power grow, the United States would need new pipelines and LNG processing facilities.
Natural gas is replacing coal as the primary energy source in China and India, while Europe is looking to the United States to replace Russian pipeline gas.
"Gas will continue to play a key role in the future. It's not just a transition (fuel), if you will, we look at it (gas) as being a destination for decades to come," said Clay Neff, Chevron's president for international exploration and production.
According to Lorenzo Simonelli, CEO of LNG equipment provider Baker Hughes, the need for the fuel will still be met, mostly from projects in Qatar, Argentina, and Africa, even in the event that the United States declines to authorise new LNG export plants.
The domestic power utilities that are under pressure to provide electricity for new data centres that support artificial intelligence, cryptocurrency mining, and the increasingly digital economy will probably be the source of additional demand for natural gas in the United States.
"Artificial intelligence is going to be the primary driver of increased energy consumption," stated Pierce Norton, CEO of Oneok, a natural gas pipeline operator that provides electricity to utilities.
However, the Biden administration's climate envoy, John Podesta, asserted that renewable energy sources like solar and wind could meet the country's energy needs instead of gas.
"More electrification in the quest for decarbonisation means more pressure to produce clean generation," he said.
(Source:www.naturalgasworld.com)
This year, the price of natural gas has dropped by one-third due to a milder winter, disruptions at LNG facilities, and higher than anticipated supply. The prognosis for future gas demand has also been hampered by the rise in solar and wind power as well as the suspension of further evaluations of US LNG export permits.
According to Chad Zamarin, a senior vice president of gas pipeline operator Williams Cos., "domestic U.S. markets are oversupplied."
"It will certainly take some time for LNG coming out of the U.S. and a bit of a slowdown in supply to rebalance," said Zamarin, speaking on the sidelines of the CERAWeek energy conference in Houston.
Due to an abundance in West Texas, which is home to the largest oilfield in the United States, prices for the fuel this week were minus 26 cents per million British thermal units (mmBtu), forcing petrol makers to pay someone to take it. The average price of petrol in the United States was $1.66 per mmBtu on Friday, which is 74% less than it was in 2022.
We are at capacity with our pipeline infrastructure. It will be extremely challenging for us to link markets, according to Toby Rice, CEO of EQT Corp., the biggest gas producer in the United States. To develop more lines, he said, modifications to permission are required.
In order to export the gas that is currently clogging the West Texas pipelines and provide steady electricity as solar and wind power grow, the United States would need new pipelines and LNG processing facilities.
Natural gas is replacing coal as the primary energy source in China and India, while Europe is looking to the United States to replace Russian pipeline gas.
"Gas will continue to play a key role in the future. It's not just a transition (fuel), if you will, we look at it (gas) as being a destination for decades to come," said Clay Neff, Chevron's president for international exploration and production.
According to Lorenzo Simonelli, CEO of LNG equipment provider Baker Hughes, the need for the fuel will still be met, mostly from projects in Qatar, Argentina, and Africa, even in the event that the United States declines to authorise new LNG export plants.
The domestic power utilities that are under pressure to provide electricity for new data centres that support artificial intelligence, cryptocurrency mining, and the increasingly digital economy will probably be the source of additional demand for natural gas in the United States.
"Artificial intelligence is going to be the primary driver of increased energy consumption," stated Pierce Norton, CEO of Oneok, a natural gas pipeline operator that provides electricity to utilities.
However, the Biden administration's climate envoy, John Podesta, asserted that renewable energy sources like solar and wind could meet the country's energy needs instead of gas.
"More electrification in the quest for decarbonisation means more pressure to produce clean generation," he said.
(Source:www.naturalgasworld.com)
