Liquid Natural Gas and US Energy Exports

The potential for growth in US energy exports was evident in two recent but unrelated reports – one from Honeywell UOP and the other from the US Energy Administration.  Together the two link growing global demand for natural gas to technological advances that will increase US energy exports.

Honeywell UOP just announced a deal with Malaysia’s Petronas to collaborate on natural gas processing.  Natural gas is the fastest growing source of energy, and the US has abundant resources.  This blog has previously pointed out how natural gas resources in the US have the potential to make the US energy independent.  The partnership between Honeywell UOP and Petronas is focused on new technology that will make natural gas more easily shipped in its liquid form, commonly referred to as LNG – liquid natural gas.

The technology that Honeywell UOP and Petronas are working on will remove contaminants such as CO2 and mercury prior to the liquefaction of the natural gas.  The resulting product can be even more compressed in its liquid form, thereby increasing the capacity of a ship to move it to areas of global demand.  And that is where another recent report – this one from the US Energy Administration – makes clear why the Honeywell UOP-Petronas partnership really matters.

Earlier in the month, the US Energy Administration published its current analysis of Chinese energy demand.  China has sought to raise its imports of natural gas via pipeline and LNG.  Although natural gas still accounts for only 4% of China’s energy consumption, the China Offshore Oil Company has substantially increased its investment in natural gas.  The China Report states that the China Offshore Oil Company invested $12 billion of its total 2011 $18 billion investment in natural gas.

While natural gas imports in China represented 12% of the total in 2010, they rose to 22% in 2011.  The Chinese government has established a 2020 goal for natural gas consumption to rise from 4% to 10% of total energy use.  The potential for the US with its huge supplies of natural gas is evident.  And that is the reason the technological advances intended from the Honeywell UOP and Petronas collaboration really matter.  Lowering costs of transport will further the capacity of the US to meet global energy demands such as those in China, thereby increasing US GDP and helping to reverse the long trend of US imports exceeding our exports.

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One thought on “Liquid Natural Gas and US Energy Exports

  1. World Energy Outlook 2012 – Part II: Natural Gas « Penley on Education and Energy

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