Why do you believe that the LNG international export price ceiling is likely to backfire?
I don't understand your question.
If you mean that higher natural gas prices overseas are an incentive to expand natural gas production in the US, yes. The LNG international export price ceiling ensures that domestic natural gas prices don't go up to match international price levels.
The ceiling forces natural gas companies to prioritize keeping natural gas prices low in the USA instead of selling overseas as a form of arbitrage.
Otherwise, you have the problem Europe is having with Germany. Germany's refusing to use nuclear is driving up electricity prices all across Europe.
I still wonder if the entire NG energy infrastructure was a mistake from the beginning. Especially now where we see this need for LNG commerce to sustain it.
The alternative strategy would have been Methanol, which can be piped at much higher energy densities than NG, and transported by rail or ship at similar energy densities to LNG but without having to refrigerate it down to -260 degF. And the methanol being far easier to store than NG or LNG, while being easy to use in existing ICE vehicles, ship or rail. Burns at higher efficiency and just as clean as NG in gas turbines or ICEngines. Particularly good for local storage at peaking or backup NG power plants. Methanol being as easy to store as diesel but much less costly and spills are environmentally benign.
And methanol can easily be made from NG, coal or any biomass. In fact it is cheaper to convert NG to methanol at source and transmit by pipeline to a power plant, rather than by a CNG pipeline if the distance is larger than 5000kms.
At least in areas that have no developed NG infrastructure, such as a lot of Africa, it would be better to develop methanol infrastructure. Where locally produced methanol can still be delivered by truck, ship or rail until pipeline infrastructure can be developed.
By “the entire NG energy infrastructure” do you mean LNG? If you actually mean the natural gas industry in general, then I strongly disagree. Natural gas is vital to the American energy system.
LNG commerce is not necessary to sustain the American natural gas industry. It is a tiny percentage of natural gas usage and likely always will be.
As for methanol, I don’t know enough to compare it to LNG. I think the industry knows the trade-offs well enough to make the correct choice.
I am skeptical that industry would choose the more expensive option if methanol really is cheaper.
Methanol can be regarded in most instances as just NG stored as a liquid at STP. Luigi MegaMethanol plants can convert NG into methanol for 6 cents per liter.
What I am saying if from the very beginning NG was converted to Methanol, and we used Methanol infrastructure, it would still be a Natural Gas energy supply, but much more than that too. It's too late now in modern countries, since NG infrastructure is well developed, but it could be done in developing countries with no exist NG infrastructure.
I don't see the advantage of doing so. In its usage methanol is close to crude oil, but it is less energy-dense and more expensive. Converting natural gas to methanol only makes sense if you have lots of cheap natural gas and no access to crude oil.
Methanol is fine for transportation, but it is more expensive than crude oil per unit of energy. And methanol is far less flexible than natural gas in its variety of uses, so I don't see what the benefit of converting natural gas to methane is.
The USA has vast crude oil reserves, so it does not make sense to convert natural gas into liquid methanol. Same goes for most nations with natural gas reserves.
As far as I know, any nation that can purchase liquid methanol can also purchase cheaper crude oil. Why would a developing nation purchase methanol when they can purchase crude oil?
Usage of methanol is similar to gasoline or diesel. It can be produced from coal for 50cents/gal or 13 cents/liter as it is done in China presently. The World methanol market price fluctuates wildly with demand as it isn't a mature market as would be if it was widely used for energy.
$150/tonne of Methanol is like $0.91/gal heating oil vs current price running ~$3.80/gal. With much lower emissions. Oil is in severely limited supply, and even the US will suffer if World price for oil skyrockets, i.e. Middle East war. Developing nations can't afford to import diesel or gasoline, they lack foreign exchange. But they can produce methanol from coal or biomass or stranded gas (since they don't have the infrastructure to distribute gas, which is very expensive infrastructure). Methanol is easy to distribute, even plastic tanks/pipes work fine.
When World Oil & Gas supply peaks, as it will within a decade or two, or even economically peaks, methanol can be produced in unlimited quantities from coal, biomass, flue gas or seawater CO2 + nuclear H2. Difficult to do if the infrastructure isn't developed over that time period.
The price cap seems unnecessary and likely to backfire. Aren't those incentives to expand development in the US?
Thanks for the comment.
Why do you believe that the LNG international export price ceiling is likely to backfire?
I don't understand your question.
If you mean that higher natural gas prices overseas are an incentive to expand natural gas production in the US, yes. The LNG international export price ceiling ensures that domestic natural gas prices don't go up to match international price levels.
The ceiling forces natural gas companies to prioritize keeping natural gas prices low in the USA instead of selling overseas as a form of arbitrage.
Otherwise, you have the problem Europe is having with Germany. Germany's refusing to use nuclear is driving up electricity prices all across Europe.
I still wonder if the entire NG energy infrastructure was a mistake from the beginning. Especially now where we see this need for LNG commerce to sustain it.
The alternative strategy would have been Methanol, which can be piped at much higher energy densities than NG, and transported by rail or ship at similar energy densities to LNG but without having to refrigerate it down to -260 degF. And the methanol being far easier to store than NG or LNG, while being easy to use in existing ICE vehicles, ship or rail. Burns at higher efficiency and just as clean as NG in gas turbines or ICEngines. Particularly good for local storage at peaking or backup NG power plants. Methanol being as easy to store as diesel but much less costly and spills are environmentally benign.
And methanol can easily be made from NG, coal or any biomass. In fact it is cheaper to convert NG to methanol at source and transmit by pipeline to a power plant, rather than by a CNG pipeline if the distance is larger than 5000kms.
At least in areas that have no developed NG infrastructure, such as a lot of Africa, it would be better to develop methanol infrastructure. Where locally produced methanol can still be delivered by truck, ship or rail until pipeline infrastructure can be developed.
By “the entire NG energy infrastructure” do you mean LNG? If you actually mean the natural gas industry in general, then I strongly disagree. Natural gas is vital to the American energy system.
LNG commerce is not necessary to sustain the American natural gas industry. It is a tiny percentage of natural gas usage and likely always will be.
As for methanol, I don’t know enough to compare it to LNG. I think the industry knows the trade-offs well enough to make the correct choice.
I am skeptical that industry would choose the more expensive option if methanol really is cheaper.
Methanol can be regarded in most instances as just NG stored as a liquid at STP. Luigi MegaMethanol plants can convert NG into methanol for 6 cents per liter.
What I am saying if from the very beginning NG was converted to Methanol, and we used Methanol infrastructure, it would still be a Natural Gas energy supply, but much more than that too. It's too late now in modern countries, since NG infrastructure is well developed, but it could be done in developing countries with no exist NG infrastructure.
I don't see the advantage of doing so. In its usage methanol is close to crude oil, but it is less energy-dense and more expensive. Converting natural gas to methanol only makes sense if you have lots of cheap natural gas and no access to crude oil.
Methanol is fine for transportation, but it is more expensive than crude oil per unit of energy. And methanol is far less flexible than natural gas in its variety of uses, so I don't see what the benefit of converting natural gas to methane is.
The USA has vast crude oil reserves, so it does not make sense to convert natural gas into liquid methanol. Same goes for most nations with natural gas reserves.
As far as I know, any nation that can purchase liquid methanol can also purchase cheaper crude oil. Why would a developing nation purchase methanol when they can purchase crude oil?
Usage of methanol is similar to gasoline or diesel. It can be produced from coal for 50cents/gal or 13 cents/liter as it is done in China presently. The World methanol market price fluctuates wildly with demand as it isn't a mature market as would be if it was widely used for energy.
$150/tonne of Methanol is like $0.91/gal heating oil vs current price running ~$3.80/gal. With much lower emissions. Oil is in severely limited supply, and even the US will suffer if World price for oil skyrockets, i.e. Middle East war. Developing nations can't afford to import diesel or gasoline, they lack foreign exchange. But they can produce methanol from coal or biomass or stranded gas (since they don't have the infrastructure to distribute gas, which is very expensive infrastructure). Methanol is easy to distribute, even plastic tanks/pipes work fine.
When World Oil & Gas supply peaks, as it will within a decade or two, or even economically peaks, methanol can be produced in unlimited quantities from coal, biomass, flue gas or seawater CO2 + nuclear H2. Difficult to do if the infrastructure isn't developed over that time period.