And its impact on power generation.
Dr. Michael Donnelly is vice president, Fuels, at Global Energy Advisors. Contact him at firstname.lastname@example.org.
While oil and gas prices now are falling after the latest experience with fuel-price volatility, the Global Energy Decision fuels team is focused on modeling an integrated world-wide system of fuel relationships encompassing crude oil, natural gas, coal, and increasingly, synfuels to help our clients assess the implications of fuel-price swings on their businesses. Let’s look at the potential impacts and implications of this growing reliance on liquefied natural gas (LNG) for North America’s power-generation demand.
Though adequate supplies of the fuel commodities are not in doubt, deliverability constraints on gas pipelines generally, railroads from coal basins, and pipelines from oil production facilities are increasingly troublesome, adding to market-price volatility of fuel commodities. With imported Canadian pipeline gas supplies (the United States’ traditional source of incremental supply) projected to decrease to provide for development of Alberta’s tar sands, LNG assumes a prominent role in planning for gas-demand growth.