Monday, November 15, 2004

Terminals, terminals everywhere

The fight over liquid natural gas (LNG) terminals is just beginning. If you want to see the scope of what's coming, look at this Federal Energy Regulatory Commission map of 45 planned terminals. Because natural gas production appears to be peaking in North America, it will be necessary to bring in LNG from other countries to supply the voracious American energy appetite. Special ships carry natural gas cooled to -260 degrees, a temperature which turns it into a liquid that can be brought across the ocean economically. Upon arrival at an LNG terminal the liquid is turned back into a gas for transport via pipeline. The concern is that these ships and the terminals that service them are subject to catastrophic explosions, explosions that are likened to nuclear explosions in their violence and destruction.

The Congressional Research Service outlines the possible dangers of such terminals in this report. The designers of such ports are aware of the safety hurdles, and there have been very few accidents and nothing that could be described as catastrophic in the 60 years or so that LNG tankers and terminals have operated. But the wildcard is terrorist activity. The possibility of an attack is obviously clear to designers, but it is much more difficult to guard against. In addition, the shear number of facilities and ships planned will increase the odds of an accident or attack.

It was because of safety concerns that only four LNG terminals were built in the United States in the late '70s and early '80s. But now with energy needs in the United States continuing to climb and so much of the economy dependent on natural gas, regulators and energy planners believe we have no choice. As things stand, many coastal communities are going to have terminals built near them unless they are somehow able to stop them.

Grist magazine details one such fight over an LNG terminal off Tijuana. It's partly a fight about preserving three islands and the marine and aquatic life they harbor. With ChevronTexaco and the Mexican government on the other side, the preservation forces have an uphill battle. This article in Pacific Environment gives you a survey of environmental concerns including this ironic twist: The authors contend that LNG could end up flooding the California market, drive down energy costs and thereby derail renewable energy initiatives.

The LNG issue is fraught with contradictions. Natural gas burns much cleaner than coal or oil and produces much less carbon dioxide than either. Some environmentalists tout natural gas as the ideal transition fuel between the oil age and an age of renewable energy. But, the only way the United States is going to be able to get enough natural gas to fulfill its needs is to import LNG.

The second quandary is that natural gas has long been promoted as a secure domestic source of energy that would free us from Middle East oil. But, much of the world's LNG comes from the Middle East, and that dependency is likely to increase not decrease.

The third problem is that natural gas may not last long enough to be the transition fuel we need. Pessimists put a peak in world gas production around 2030. (More optimistic projections put it sometime after 2050.) If the pessimists are right, then that would put the world gas production peak only 10 to 20 years after their predicted peak for oil, a truly calamitous scenario. (For a discussion of the peak oil production issue, see my story on this issue.)

The pessimists say we need to start a crash program for renewable energy now and to engage in stringent conservation measures to make our nonrenewable sources last. The optimists say that there is enough natural gas to enable us to make that transition with considerably less disruption.

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