Joseph Blount, chairman of the Natural Gas Supply Association (NGSA), on Thursday downplayed concerns that growing imports of liquefied natural gas (LNG) in the United States could lead to the formation of a “cartel” similar to that seen in the global oil sector.

Senate Energy and Natural Resources Committee Chairman Pete Domenici (R-NM) recently said that while LNG “may be a great plan,” the U.S. should look to its own turf to produce more gas. Domenici has voiced concerns about the nation becoming too dependent on LNG imports.

“If you look at the energy needs of the country…there’s no question that you’re going to have to have flexibility in your energy supply,” Blount said at a media briefing held by the NGSA and the Canadian Association of Petroleum Producers (CAPP) at the Canadian Embassy in Washington, DC.

“When you look at it from a security standpoint, we’re only 2% LNG today. We’re looking at potentially 25% in the future, but if you look at where that natural gas is going to come from…it’s not easy to look and see a cartel-type situation because of the diversity of the supply around the world,” Blount said.

“I think it’s an education process, that we need to have to understand how these sources of supply will come into the country and the diversity in that supply mix,” Blount said. While LNG is becoming more fungible like oil, LNG is also “more geographically diverse than oil in the supply source.”

Blount noted that recent baseline projections by the Department of Energy’s Energy Information Administration and the National Petroleum Council show that LNG imports even have the potential to outnumber Canadian imports by 2015. LNG “is likely to increase to over 11% of our supply by the year 2015,” Blount said.

This summer, NGSA expects LNG imports to nearly double from 1.4 Bcf/d to 2.6 Bcf/d. This increase is due to the fact that all four import terminals are operating. But the trade association said that the four terminals alone cannot meet growing demand. “Five new import terminals have been approved by the appropriate regulatory bodies in the United States and are expected to be online in the next several years,” the NGSA chairman said. An additional 33 terminals have been proposed or planned.

Meanwhile, Blount criticised the current permitting process for LNG facilities. “It’s a long and arduous task at this point, and it needs to be streamlined,” he said. “There are many agencies that are involved in this process, and permitting can take well over a year in order to get done at this point today. We believe that timeline needs to be significantly decreased.” He believes that the permitting process for LNG facilities should be no more than 12 months.

He also noted that public support for LNG projects is “critical,” and said that projects will, “as they have in the past, be subject to opposition, which, as you know, has canceled projects in any number of areas — electricity as well as pipelines, in the past in the U.S.”

Blount said that projections that LNG will grow to 11% of the U.S. supply portfolio by 2015 “is not going to happen unless the policymakers support expanding LNG infrastructure and educating the public about the benefits of LNG.”

Going forward, he said that in the next 20 years “we will need to build seven more terminals…with expansion of existing terminals and expansions of Canadian imports to meet projected U.S. demand. The alternative — not promoting LNG and not advocating the expansion of LNG infrastructure and increasing Canadian imports — is far too risky for us to consider.”

Meanwhile, CAPP Chairman Roger Thomas said that Canada is “not running out of natural gas. We’ll be a significant supplier to the United States and the U.S. market for many years to come.”

Commenting on LNG, Thomas said, “We have a situation right now where the price and the market suggest very strongly that there is room and the need for LNG. So we don’t see the advent of LNG as a threat at all. Really, from a Canadian perspective, we think it’s all needed, we think it’s all very complementary.”

He said that “when you take a look at energy and energy supply from a North American perspective, you really have to look at it, I think, from a portfolio standpoint and I think there is room in the portfolio for LNG.”

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.