Supplementing United States Gas Supplies With Imported LNG
Authors: Khan Amanullah R. , Bodle William W. 
Published: December 2007

The demand for gas is like a predatory beast. It grows more and more voracious, and we must find means of satisfying its appetite. Until more exotic foods are concocted such as gasified fossil fuels like coal, oil, and shale imported liquefied natural gas may be the best appeaser.

Introduction

The current and future gas supply situation in the U. S. has caused serious concern regarding the ability of the domestic gas industry to meet the burgeoning demand. In the past 30 years, the country has been fortunate in baying plentiful supplies of natural gas to meet the growing requirements and maintain a healthy reserve-life index. However, in the last 3 years, estimates of gas reserves in the lower 48 states indicated a dwindling supply of natural gas to meet an increasing demand. The problem was brought into sharp focus in 1969 when the AGA reported the first signs of a decline in natural gas reserves since 1946. Since then, production of natural gas has exceeded additions to reserves, resulting in a decrease in proved reserves. Some of the factors that have caused this imbalance are the artificially low price of natural gas compared with that of other fuels, the lack of economic incentives to expand exploratory efforts to increase reserves, and the increasing demand for the protection of the environment through the use of a nonpolluting, clean-burning fuel. As a result of these factors, residential, domestic, and industrial customers in major market areas have been unable to procure new supplies of additional gas. Thus, the gas industry has had to look for additional ways of meeting the demand. Some potential alternatives are: increasing exploration and drilling in the lower 48 states; gasifying fossil fuels such as coal, oil, and shale; pipelining from Canada; pipelining from the North Slope and the Arctic regions; stimulating gas-tight reservoirs by nuclear means; and importing liquefied natural gas (LNG). Among these, the importing of LNG has recently assumed an important role. The technology for this supplementary source is already developed and proved; moreover, the time schedule for its implementation may very well provide the interim supply necessary in the next 2 provide the interim supply necessary in the next 2 decades to enable the industry to fully develop major sources of supply from fossil fuels.

Analysis of Future Requirements and Supply

To evaluate the role that LNG imports will assume in the over-all supply picture, we must analyze the future requirements for natural gas in the U.S., the potential supply, and the deficiencies that will occur. potential supply, and the deficiencies that will occur. According to statistics published by the AGA, the proved reserves of natural gas from the U.S. at the proved reserves of natural gas from the U.S. at the end of 1970 were 290.8 Tcf. This includes about 31 Tcf of gas for Alaska. If the latter figure is excluded, then the reserves for the lower 48 states amount to 2516 Tcf, a decline of 10 Tcf from the 1969 figure.

During 1970, net production in the lower 48 states was about 22 Tcf. The growth rate of net production was 6 percent over that of 1969, and the result of this was a decline in the reserve-life index to less than 12 years. Numerous studies on future gas usage all indicate a continuing decline in the reserve-life index. The latest reports by the Future Requirements Committee (FRC) under the auspices of the Gas Industry Committee projects a total U. S. requirement of 38.5 Tcf by 1980 and 50.1 Tcf by 1990.

JPT

P. 535