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America is awash with natural gas

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  • America is awash with natural gas

    Not sure what it means for CNG or it's prices though.

  • #2
    Will Owen for LNG Industry 30 Dec 2019 - Turn out the lights: can flaring be curbed?

    For the Permian Basin, the future is bright – and getting brighter all the time. In fact, the McDonald Observatory in Texas has noted an increase in average sky brightness due to artificial light from 14% in 2015, up to 43% in 2019. The reason is flaring.

    No one wants to flare. But if an operator has no access to pipeline takeaway capacity (or can’t afford it), then they have little choice other than to flare or close up shop entirely. Rystad Energy recently reported that flaring in the Permian hit an all-time-high of 750 million ft3/d during the period from July to September 2019 – up from just 100 million ft3/d a decade ago. Estimates based on satellite data collected by the Global Gas Flaring Reduction Partnership (which is managed by the World Bank) identified a 48% rise in flaring in 2018, and pointed to Texas and North Dakota as the main sources. According to the same report, 145 billion m3 (5120.6 billion ft3) of natural gas were flared in 2018 – equivalent to the total annual gas consumption of Central and South America.

    Taking the Permian’s 750 million ft3/d, that is roughly US$2.15 million of revenue left on the table every day in the Permian alone. Alternatively, rather than sell the gas on the market, a proportion could be captured and used to power onsite operations, saving cash rather than generating it. Building more pipelines is not only incredibly expensive, but politically difficult – various projects have run into intense opposition in recent years. To build out pipeline capacity at the scale and reach required to solve the flaring conundrum would be a gargantuan undertaking.

    Other methods have been tried too. Technology exists to capture gas at the wellhead and convert it to a useful and transportable form. CNG, which can then be collected and transported by truck, is an option that has worked for some. However, the logistics involved in the business case can be difficult at low gas prices. LNG is more attractive in this respect – as much as eight times as much gas can be transferred at a time, slashing associated overheads. Advances in truly micro scale LNG have reached a point where it is now possible to deliver an entire LNG gas capture, liquefaction and transportation solution with each module the size of a truck-delivered container.