Jackie Bavaro Liquefied Natural Gas Asserts its Role as a Marine Transportation Fuel

The November issue of American Gas magazine titled, “Sea Change,” examines the global opportunities for liquefied natural gas (LNG) and its role as a marine transportation fuel as the world continues to move toward an international emission standard.

Six years ago, the marine industry was the last large emission source that remained unregulated. Since then, mandates from the International Maritime Organization have led ship owners to develop new solutions. Today, more cruise line owners are buying into LNG worldwide, with the goal to have 80 percent of cruise ships LNG-powered by 2025.

In Central America, the expansion of the Panama Canal had a major impact on the amgasmaritime industry in 2016, boosting LNG trade by lowering costs and ramping up transport. In July, Royal Dutch Shell’s Maran Gas Apollonia tanker, loaded with a cargo of U.S. LNG from Cheniere-operated Sabine Pass, became the first standard-size LNG vessel to traverse the canal. Bloomberg recently reported that 90 percent of the world’s fleet of tankers carrying LNG exports will now have access to this shortcut to Asia, which bodes well for U.S. gas companies exporting LNG to other countries.

Meanwhile, the Paris Agreement formulated during the U.N. Climate Change Conference in December 2015 marked the first universal, legally-binding global climate deal, with 195 countries agreeing on a global action plan to limit global warming to well below two degrees Celsius. Although international shipping was not included in this agreement, amid the optimistic predictions for growth, all eyes are on the International Maritime Organization to see whether the sulfur emission standard for emission control areas will be dropped from 3.5 percent to 0.5 percent in 2020, or deferred until 2025.

Europe has spent approximately $150 million to date to develop LNG infrastructure. Before Brexit, all 28 member nations of the European Union unanimously agreed to a formal policy that said there will be LNG bunkering capability in all deep-sea ports in Europe and all inland ports on the continent by 2025. By the end of this year, several of Europe’s major ports will have bunkering capability.

While LNG remains a relatively new fuel source for oceans-going vessels, marked growth in the number of LNG-fueled ships signals the beginning of a new era. For more information on marine LNG activity, you can access the American Gas article here.

Posted in energy | Leave a comment

Richard Meyer Natural Gas Market Indicators: October 28, 2016

Gas-directed drilling bumped up during the past several weeks with price increases of $3 per MMBtu and more. But now in late October, natural gas pricing at Henry Hub is below $3 again, and the market will look for reasons to sustain the earlier momentum. Storage inventories are strong, so the one ingredient missing to frame the coming winter is heating degree days.

Will the winter for the majority of the country mean fewer (warmer than normal) or more than average heating degree days (colder than normal)? If it is cold, will it be sustained over large regions or hit and miss? Local natural gas utilities always plan for the possibility of reaching a peak design day and thus serving firm customers and others without interruption. Now Mother Nature will determine the targets to be managed with all of the resources currently in place to assure reliable, affordable service.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

Posted in Natural Gas, Natural Gas Market Indicators, weather | Leave a comment

Jake Rubin Renewables and Natural Gas Rise Together

The International Energy Agency said today that renewables surpassed coal last year to become the largest source of installed power capacity in the world. While solar, wind, geothermal and other non-hydro renewables remain a very small portion of the world’s total primary energy supply, they are on the rise. This has taken place simultaneously with growth in the use of natural gas for both electric generation and in homes and businesses for heating and cooling, water heating, cooking and clothes drying. More homes and businesses use natural gas today than ever before and the numbers continue to increase.

Substantial amounts of coal-to-gas switching has taken place alongside the growth in renewable electricity in the United States.  Between 2007 and 2015, the amount of electricity generated at coal-fired power plants declined more than 30 percent. Natural gas and renewables have filled that gap, with natural gas providing about two-thirds of the electricity to plug the hole left by coal; renewables made up the other third. Natural gas continues to grow rapidly and will remain a foundational fuel for the world’s energy supply for some time to come.

This is what an “all of the above” energy plan looks like and it has brought us to the lowest annual carbon dioxide emissions in decades.

 

Posted in Natural Gas, renewable energy | Leave a comment

Chris McGill Natural Gas Market Indicators: October 14, 2016

Oil-directed drilling is up 35 percent as measured by Baker-Hughes rig activity since late May 2016 and gas drilling is up 16 percent from the end of August. Much of the drilling increase is attributed to increased oil and natural gas wellhead prices – oil now over $50 per barrel and natural gas above $3 per MMBtu. These energy prices remain great values for consumers while injecting just a little more money into the upstream sector, which is not a bad thing.

We will continue to watch storage inventories and heating degree day data to see what they will say about the robustness of natural gas demand to begin the winter heating season. Remember, the winter heating season of November 2015-March 2016 was the winter that wasn’t, as national heating degree days came in 17 percent fewer (warmer) than normal. A return to any semblance of normal may mean residential and small commercial users consume more natural gas during the heating season and thus overall bills may increase.

AGA will host a media briefing on Wednesday, October 19, to present expectations for peak month natural gas supply and demand as we move into the 2016-17 winter heating season. Experts from AGA will discuss the winter outlook for the natural gas market including market stability, natural gas bills for consumers, U.S. natural gas imports and exports, the global LNG market as well as energy efficiency and the benefits of the direct use of natural gas. An open question and answer session will follow the presentation. If you are a member of the media and would like to RSVP, please email jbavaro@aga.org.

Visit this link to download the full Natural Gas Market Indicators report. Topics covered in this week’s report include: Reported Prices, Weather, Working Gas in Underground Storage, Natural Gas Production, Shale Gas, Rig Counts, Pipeline Imports and Exports, and LNG Markets.

Please direct questions and comments to Chris McGill at cmcgill@aga.org or Richard Meyer at rmeyer@aga.org.

Posted in Natural Gas Market Indicators, weather, winter heating | Leave a comment