Ouch! Kiss your LNG import fantasies goodbye...

[hunter]

I was poking around a little bit after my post on the price of diesel thread and it seems all the major oil companies and gas exporters are building or planning to build plants to convert natural gas to synthetic diesel.

It looks to me as if LNG is going to end up as a very small niche market. Unlike LNG, you can easily sell diesel anywhere, and shipping it all over the world is routine and much less controversial than LNG.

For example, Shell is building a big plant in Qatar.

Why bother exporting LNG when you can turn natural gas into easy to ship value added products like fuels and fertilizers?

[wtmusic]

1. The cleanest non-nuclear power plants run on LNG

that is not a niche market.

[RaleighNCDUer]

2. That sound like it's just the problem - if all the LNG is converted

into more profitable products, what will those cleaner plants have to run on?

[hunter]

3. California has all these natural gas fired power plants...

... and no assured long term supply. I think the general plan was to build LNG terminals somewhere, even in Mexico if they had to, as North American supplies declined.

Unfortunately, if exporting diesel fuel (or JP-8 for our voracious military!) turns out to be more profitable than exporting liquefied natural gas, then there won't be any LNG for California to import.

[wtmusic]

4. Or the price for LNG goes through the roof

meaning those of us with electric cars will still be at the mercy of the oilcos.

Nuclear now.

[hunter]

5. For scale, the GTL plant in Qatar could meet 10% of the U.S. jet fuel demand.

It seems we'll be hastening the arrival of peak gas by these sorts of substitutions.