Liquefied natural gas (LNG) is the most energy dense form of natural gas, making it ideal to fuel long-haul trucks and other heavy duty vehicles and to transport natural gas where pipelines are not present. LNG is made by cooling natural gas to -260° Fahrenheit, which reduces its volume to 1/600 of its gaseous form. Demand for this clean, economic, and easily transported fuel is growing, and many companies are responding by investing in liquefaction, gasification, and storage (peakshaving) facilities; LNG refueling infrastructure; and LNG export terminals for the overseas sale of natural gas.

LNG for Transportation
Zeus Intelligence reports there are 34 LNG supply plants with trailer loadout in the U.S. that are capable of producing nearly 3 million gallons of LNG per day. These numbers are expected to increase to meet the growing demand from the fleet and retail markets. Clean Energy, in partnership with Pilot-Flying J truck stops, is creating “America’s Natural Gas Highway,” a series of strategically located LNG fueling stations at major U.S. highway hubs and along trucking corridors. The first phase of the plan includes the opening of 70 stations across 33 states by the end of 2012 and 80 more by the end of 2013. Royal Dutch Shell plans to invest $300 million in a similar project to build a network of 200 LNG pumps at 100 Travel Centers of America locations. For more on U.S. LNG production, visit this regularly updated Zeus Intelligence page, which was made in collaboration with NGVAmerica.

LNG imports and exports
It was not long ago that the U.S. anticipated a long-term shortage of natural gas. In response, nine LNG import terminals were built to meet the rising demand for natural gas. Since their completion, the natural gas picture in the U.S. has improved dramatically. Advanced technologies have allowed producers to economically access shale formations and produce a tremendous amount of gas. The Potential Gas Committee now estimates the U.S. has enough natural gas to last over 90 years at the current level of consumption. The price of domestic natural gas has since dropped to 15 year lows, making the importation of LNG uneconomical. In May 2012, LNG on the international spot market was a staggering eight times higher than the price of domestically produced natural gas (EIA). This price difference has led former import terminals scrambling for approval to become export terminals to feed foreign, energy hungry economies. Other natural gas companies are also seeking approval to build export terminals to take advantage of the current price difference. However, these facilities require tremendous capital investments to build, and the approval process is difficult. There is also much uncertainty as to the effect exporting large volumes of natural gas would have on energy security, industrial manufacturers, and the U.S. economy as a whole. For more on LNG exports, read NGVAmerica's position statement.

In Washington, democrats are opposed to natural gas exports. They argue the U.S. is uniquely poised to take advantage of an abundant, clean, and inexpensive energy resource to save end users money and drive the economy. Edward J. Markey (D-MA) has introduced two bills to stop the export of LNG: The Keep American Natural Gas Here Act, which would require natural gas produced on federal lands to be resold to American consumers, and the North America Natural Gas Security and Consumer Protection Act, which would prevent the Federal Energy Regulatory Commission (FERC) from approving any new LNG export terminal. Meanwhile, Rep. James Lankford (R-OK), joined by 33 other Republicans and 10 Democrats, has urged Secretary of Energy Steven Chu and the White House to fast-track LNG export terminal certifications. They argue the export of LNG will create American jobs and stable markets for natural gas producers.

The approval process for LNG terminals is complicated by the fact that authority is divided amongst several government agencies. The federal government, working with the individual states, plays a prominent role in determining where it will allow LNG terminals to be sited and built in the United States; FERC has authority to approve the siting, construction, and operation for onshore facilities and for facilities located in state waters; the U.S. Maritime Administration has permitting authority for facilities in federal waters; and the U.S. Coast Guard is responsible for security while vessels are at port and in transit. These agencies work with stakeholders, including state and local governments and citizens, before granting approvals.

The Department of Energy’s Office of Oil and Gas Global Security and Supply, Office of Natural Gas Regulatory Activities regulates natural gas imports and exports under Section 3 of the Natural Gas Act of 1938. The office is responsible for maintaining statistics on North American natural gas trade, and overseeing the Office of Fossil Energy's international programs pertaining to natural gas and petroleum.

While NGVAmerica has no official stance on the export of LNG, we believe all of America’s energy resources should be developed and taken advantage of domestically, which includes expanding the use of natural gas in the transportation sector.

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