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Exxon Mobil (NYSE: XOM) said yesterday that "it wants to anchor a floating liquefied natural gas (LNG) terminal 20 miles off the coast of New Jersey." If regulators approve the terminal, it would cost more than $1 billion to build, but it would be able to supply about 1.2 billion cubic feet of natural gas per day, enough to meet the needs of more than 5 million residential consumers. This would ease the supply of natural gas to New Jersey and neighboring New York.Since the gas is cooled to liquid form, it can be shipped through tankers, rather than pipelines, thus allowing nations the use of more gas than is nearby. Exxon expects demand for gas in North America to rise above the ability of drillers to supply it. It also expects worldwide demand for LNG to more than triple to 500 million metric tons a year in 2030, 20% of which will be consumed in North America, meaning America would have to rely on imported gas. Hence the need for the terminal.
Even though Exxon says the terminal, set to be moored in about 150 feet of water, won't be visible from the shoreline or interfere with shipping lines or recreational areas, I doubt many residents would be happy to have such a terminal in such close proximity, mostly due to safety and security, rather than environmental concerns. Even environmentally, though, the terminal could find opposition, as the question remains whether "industrial sprawl into the ocean" is something we should endorse in the name of cheaper energy.
Still, if Exxon can promise lower energy prices, not to mention improving the air quality by reducing the need for coal-fired power, as well as build the terminal far enough from the shore to alleviate security concerns, it's possible it could be approved.
Exxon is involved in two other terminal projects -- one in construction near Sabine Pass, Texas, in Wales, and the other offshore from Italy in the Adriatic Sea. In California, however, a proposal to build such a terminal 14 miles off the coast of Oxnard was vetoed by the governor. Perhaps the proposed 20 miles in Jersey is far enough.
Exxon shares are doing well today, up 2.85% at midday, along with other energy stocks, as oil prices increased due to an oil spill off Norway and stormy weather in the Midwest. Crude inventories are still due for release later today, and could affect oil prices and oil stocks further.
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Reader Comments (Page 1 of 1)
12-14-2007 @ 1:49PM
Wayne said...
The USA appitate for oil must be curbed. Increased taxes on gasoline and other petro products is a good place to start. Coal should also be heavily taxed. The market is the only thing that can slow demand.