U.S. Looks to Ease Natural Gas Supply Glut
A new export facility for liquefied-natural-gas (LNG) in the US has the potential to help ease the country's current glut of natural gas as producers gain the ability to ship natural gas overseas. Natural gas prices received a boost after the announcement last week that Cheniere Energy will receive $3.4 billion in financing for the facility.
Eight banks have committed to finance the country's first LNG export facility, which will be located in Louisiana. The company is expected to be able to export 1.1 billion cubic feet a day by the end of 2015, according to a recent Wall Street Journal article.
The U.S. Energy Information Administration on Thursday reported that natural gas storage levels have increased by 33 billion cubic feet, well above the levels analysts had estimated.
Although the Energy Department approved Cheniere Energy's plans, the government has delayed the final say of similar applications from at least seven other companies. Administration officials say they are waiting on the results of a study that analyzes how allowing companies to sell natural gas overseas would affect prices at home. Those results should come out sometime this summer.
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"We want analysis to drive decisions," White House energy adviser Heather Zichal said at a recent forum. The administration wants to make sure it's "protecting American consumers and making sure we're sending the right signal to industry and the manufacturing sector."
According to a report from the Energy Information Administration in January, exporting natural gas would cause prices to climb in the US, increasing consumers' electricity bills from 1 percent to 3 percent from 2015 to 2035. Industrial prices, too, would climb from 9 percent to 28 percent. Because natural gas is not a globally traded commodity, prices vary in different locations. Companies could sell natural gas to Asian and European markets, for example, for five times the price.
However, exports could cause prices to spike and energy bills to rise in the US, while putting domestic manufacturing at jeopardy. Manufacturers that use cheap and abundant natural gas to fuel their plants have already been hit hard over the last 20 years due to volatile prices.
While applications filed with the Energy Department could put the country on track to export nearly a quarter of its daily production in 2011 (16 billion cubic feet), few expect all of those proposals to win federal approval. Realistically, experts at IHS CERA say that the potential market for exports from the US and Canada is 4 billion to 5 billion cubic feet per day by 2020.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.