The natural gas market is becoming an increasingly global venture that will prove vital in meeting the growing worldwide demand for energy, speakers said Thursday at the Industrial Gas Users Association's 2007 natural gas conference in Quebec City, Quebec.
World demand for energy is expected to double by 2050, said Ken Snodgrass, senior vice president for Shell Trading Gas & Power, adding that the ideal fuel source to meet that demand will be clean, convenient and "as cheap as possible." That will make natural gas -- and global trade in LNG -- key elements of future energy consumption.
Snodgrass said LNG is key to North America's ability to fill the gap between growing demand and stable or decline domestic supplies, particularly given that the US' extensive pipeline and storage network allows the country to accept LNG cargoes that cannot find a home elsewhere. "When Europe doesn't need it, when Asia doesn't need it, the US gets it," he said. "It has to go somewhere."
Bill Gwozd, vice president of gas services for Ziff Energy Group, agreed, telling the conference that LNG is likely "a better way to go" for meeting eastern Canadian gas demand than either the Mackenzie Delta pipeline or the Alaska Highway pipeline.
He said LNG currently can be delivered to the Gulf of Mexico at a cost of between $3.50 and $4.50/MMBtu, and has greater capacity over time than the still-unbuilt Alaska pipelines, which have a combined estimated start-up cost of more than $35 billion.
Even if transportation costs are added, LNG is still more cost-effective than the proposed mega-pipelines. "Both of these projects...get you to downtown nowhere," and so would require further transportation costs to move gas along the existing grid to market areas, Gwozd said.
But while increasing LNG imports to North America can help dampen gas market volatility, "that does not mean that volatility will stop," Snodgrass said. He cited five factors that affect the volatility of global gas markets: geopolitics, the regulatory environment, economic performance, the crude oil market, and most important, weather.
The relatively moderate weather conditions across the globe over the last year have done much to dampen gas market volatility, Snodgrass said, but that dynamic could change if extreme weather events occur, including colder-than-normal winters or hurricane-relation disruptions to production.
The oil market continues to have an effect on the gas market, "but it doesn't do it as much as it used to," Snodgrass said. But he said that as gas becomes a stronger global commodity, it "will follow crude eventually."
World demand for energy is expected to double by 2050, said Ken Snodgrass, senior vice president for Shell Trading Gas & Power, adding that the ideal fuel source to meet that demand will be clean, convenient and "as cheap as possible." That will make natural gas -- and global trade in LNG -- key elements of future energy consumption.
Snodgrass said LNG is key to North America's ability to fill the gap between growing demand and stable or decline domestic supplies, particularly given that the US' extensive pipeline and storage network allows the country to accept LNG cargoes that cannot find a home elsewhere. "When Europe doesn't need it, when Asia doesn't need it, the US gets it," he said. "It has to go somewhere."
Bill Gwozd, vice president of gas services for Ziff Energy Group, agreed, telling the conference that LNG is likely "a better way to go" for meeting eastern Canadian gas demand than either the Mackenzie Delta pipeline or the Alaska Highway pipeline.
He said LNG currently can be delivered to the Gulf of Mexico at a cost of between $3.50 and $4.50/MMBtu, and has greater capacity over time than the still-unbuilt Alaska pipelines, which have a combined estimated start-up cost of more than $35 billion.
Even if transportation costs are added, LNG is still more cost-effective than the proposed mega-pipelines. "Both of these projects...get you to downtown nowhere," and so would require further transportation costs to move gas along the existing grid to market areas, Gwozd said.
But while increasing LNG imports to North America can help dampen gas market volatility, "that does not mean that volatility will stop," Snodgrass said. He cited five factors that affect the volatility of global gas markets: geopolitics, the regulatory environment, economic performance, the crude oil market, and most important, weather.
The relatively moderate weather conditions across the globe over the last year have done much to dampen gas market volatility, Snodgrass said, but that dynamic could change if extreme weather events occur, including colder-than-normal winters or hurricane-relation disruptions to production.
The oil market continues to have an effect on the gas market, "but it doesn't do it as much as it used to," Snodgrass said. But he said that as gas becomes a stronger global commodity, it "will follow crude eventually."
