Natural gas is one of the big three fossil fuels that make up the vast majority of world energy consumption.
Predominantly used to generate electricity and as a heating source, natural gas is one of the “big three” fossil fuels that make up the vast majority of world energy consumption. As a cleaner-burning fuel than oil and coal, natural gas has become an increasingly attractive fuel source in the last decade.
The lower carbon intensity of natural gas relative to coal and oil makes it an attractive fuel for the industrial and electric power sectors for environmental reasons. Natural gas has an established presence in this sector which can be expected to increase over time. If the market for electrically charged vehicles expands as anticipated, additional demand for electricity and therefore gas can also be expected. From an environmental perspective, LNG as a direct fuel for transport is also a viable emissions mitigant. Use of LNG in the automotive sector is minimal today but expected to increase over time. Relative to petroleum and other liquids, the IGU (International Gas Union) states that use of LNG in transportation can reduce emissions of carbon dioxide by up to 20% whilst emissions of nitrogen oxide can be cut by up to 90% and particulate matter by up to 99%.
Emissions of sulphur oxide can potentially be eliminated altogether. Increasing concern about sulphur oxide is making LNG an increasingly attractive alternative for fuelling ships. By 2020 around 1,000 vessel newbuilds are expected to be delivered with natural gas engines with an estimated 30% of newbuilds thereafter being LNG-fuelled. Engine manufacturers for buses, heavy trucks, locomotives and drilling equipment have also started building dual-fuel engines that use LNG. China is leading the roll-out of LNG corridors for LNG fuelled vehicles and Europe is following suit. Selected railways and heavy vehicle fleet operators in the US are now using LNG as a fuel and maturing small-scale LNG technology that can be used to access other isolated customers and reach new markets also represents a promising opportunity that is being pursued globally.
Natural gas accounts for about 25% of global energy. Of this, 10% is supplied in the form of LNG – up from 4% in 1990. Countries whose natural gas demand exceeds the indigenous supply must import natural gas through a pipeline or in the form of LNG aboard ships. LNG is natural gas that has been converted into its liquid state through a cooling process for efficient transportation by sea. Upon arrival at its destination, LNG is returned to its gaseous state by an FSRU or by land-based regasification facilities for distribution to power producers and consumers through pipelines.
Facts and figures