US Will Dominate the Golden Age of LNG

One of the drivers for oil falling to $50 a barrel is the fact that the world is entering the Golden Age of Natural Gas. Although oil is the primary energy source for transportation, natural gas is the most efficient low-carbon energy source for electricity, industrial production, and home heating. With the U.S. price of natural gas about 30% of the cost in Asia, huge specialized ships will soon be transporting LNG from the U.S. to displace a large percentage of diesel oil used for electrical generation and transportation in Asia.

Compared to the U.S. price of natural gas at $3.14 per thousand cubic feet (mcf), natural gas price contracts in Asia are trading at $10 to $12 per mcf due to high demand and insufficient natural gas supply in the region. The main components driving up natural gas demand in Asia are 10% annual electricity growth and rising demand for the industrial sector to shift from diesel oil to gas. China has increased natural gas use by almost 600% since 2000, according to the BP annual review.

Natural gas is a slightly cheaper energy source than oil products, but it is a radically cleaner burning fuel. About 75% of China’s electricity production comes from coal-fired plants. During the three hottest months of the summer, China suffers the world’s worst smog due to lignite coal burning release of sulphur oxide, nitrogen dioxide, and carbon dioxide. China’s goal is to increase natural gas as percentage of total energy needs go from 2.5% to 8% in the next five years, which means demand will quickly triple.

( breitbart.com Edited by Topco)