March
2017
Hello
-
Please enjoy this edition of
the Prospect Resources
newsletter
Did
You Know - How is
Natural Gas Liquefied?
Natural
gas is moved through a wide
network of pipelines
throughout the United States
and around the world. When
it is shipped overseas,
however, there are typically
no pipelines available.
Consequently, the gas is
liquefied and shipped in
tanks across the ocean.
Liquefied natural
gas (LNG) is produced as
follows: the gas is first
extracted from a production
field and moved to an
appropriate production
facility. Impurities such as
water, hydrogen sulfide, and
carbon dioxide are removed
so that they do not freeze.
The gas is the cooled to a
temperature of approximately
-260 degrees F at ambient
pressure until it liquefies.
This condensed liquid form
of natural gas takes up
about 1/600th of the volume
of natural gas and is about
2.4 times denser than
compressed natural gas
(CNG). For safety and
insulation purposes, the LNG
is loaded onto double-hulled
ships. Upon arrival, the LNG
is likely to be off-loaded
into well-insulated storage
tanks. The LNG is gradually
warmed to return it to its
gaseous state and delivered
to natural gas customers
through local pipelines.
This process is known as
regasification.
The
volume of LNG exports from
the US is still relatively
small, but growing.
Two
short informational videos
on LNG can be seen here and here,
Renewables
- Changing "Old-School"
Market Economics
Renewable
energy sources, i.e. wind
turbines and solar power are
still slowly making inroads
into the mainstream power
markets. As these supply
sources continue to grow,
though, we can expect
existing market paradigms
to disappear, replaced with
new market realities.
A recent article in The
Economist shows
how renewable energy sources
are altering power market
economics. Key variables in
this transformation are
government subsidies, lower
operating costs, and
intermittent operating
intervals. Ultimately public
utilities see lower returns
and investors will be less
eager to come to the party.
For more details about this
story, click here
Peoples
Gas Pipeline
Project On Hold
The
Illinois Commerce Commission
(ICC) recently suspended a
large scale, multi-year
infrastructure project started
by Peoples Gas. Large
cost overruns were uncovered,
which require further
examination in order to
protect consumers from
extremely high delivery rates.
The project's aim is
to replace 2,000 miles of
gas mains running through
Chicago neighborhoods by 2030.
Many of those pipelines are
over 100 years old.
Most agree the project is
essential. However, the ICC
questions if the utility was
managing the project
correctly. Questions
arose over work
prioritization, cost
containment, and undue
financial burden being passed
on to the consumer. In
2015, Wisconsin Energy
acquired Peoples Gas.
Shortly thereafter, the
ICC imposed financial
penalties on the utility due
to cost overruns being hidden
by the previous management
company as a means to push the
acquisition through.
For
more details about this story
from Crain's Chicago, click here.
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