Importing Natural Gas

The US is experiencing the most severe natural-gas shortage in a quarter-century, driven largely by an industry rush to burn a fuel that's cleaner than oil or coal. Prices have nearly doubled this year. And the supply-demand gap could widen over the next 20 years.

Even though plenty of natural gas lies under US soil (an estimated 213 trillion cubic feet, about a 10-year supply), much of it is beneath environmentally restricted federal lands or waters. So energy companies have decided to look elsewhere. Even Fed chair Alan Greenspan suggested they do as much.

PFC Energy, a Washington-based energy consulting firm, says the global oil and gas industry plans to spend more than $100 billion over the next 10 years to transport gas from gas-rich poor nations to wealthy ones. But shipping it as supercooled liquid natural gas (LNG) is costly, and there are safety, environmental, and aesthetic concerns about placing LNG terminals near coastal cities or towns, not the least of which is the possibility of a terrorist attack.

More than 25 proposals are in the works to build LNG terminals. The US has only four now, and the first new one to be built in the lower 48 states in more than 25 years was approved last month by federal regulators.

Public opposition to LNG terminals can be fierce, as seen recently in the San Francisco Bay area, where plans to build a terminal were finally scrapped. One viable solution to safety and aesthetic concerns is to build floating terminals offshore. But environmental effects, such as on fishing, would still need consideration.

Energy companies especially need the support of state and local regulators. Without that, private investment may be more difficult to come by. The Department of Energy is just beginning a dialogue involving various stakeholders, as energy companies ramp up their efforts for reliable and publicly acceptable LNG ports of call.