Climbing to the top of a dizzyingly curved stairway welded to the
side of a huge cylindrical tank, Tom Gehrig thinks he can see
America's energy future.
It's a gargantuan tank - dwarfing the one he's standing on -
which he would build here in Fall River, Mass., to hold 200,000
cubic meters of imported liquefied natural gas. LNG would help meet
the United States' growing energy needs, but this project has
sparked protests by residents of this working-class city, worried
about terrorist attacks. "I'm a believer in free markets," says Mr.
Gehrig, president of Weaver's Cove Energy, gazing across the site.
"If people don't want LNG, the question I would ask them back is:
'What are you going to do?' "
For three decades, the US has coped - sometimes uncomfortably -
with its growing reliance on foreign oil. But at least that
dependence was limited to transportation, while domestic coal and
gas continued to power the nation's factories and heat its homes.
Now, the rising price of domestic natural gas has triggered a plan
to dampen those price hikes by bringing in foreign LNG.
That may be smart economics, at least in the short term. But some
analysts worry that in the long run, the US may be setting itself up
to become dependent on a second foreign fuel, just as it has become
increasingly dependent on foreign oil since the 1970s.
"All we're talking about doing is replacing one dependency with
another," says Gal Luft, executive director of the Institute for the
Analysis of Global Security in Washington, D.C., a think tank
focused on energy security issues. "The main sources of natural gas
are located in the Middle East and Russia. So we're talking about
the same sort of problem."
Some of the parallels are uncanny. The US is largely self-
sufficient in generating electricity. Nearly half comes from coal,
20 percent is nuclear, about 18 percent is powered by natural gas,
and the rest comes from hydropower and other renewable sources.
Excluding gas piped in from Canada and Mexico, natural-gas imports
(in the form of LNG) made up about 3 percent of US demand last year.
That will almost certainly change. Imports of LNG - the liquid
form of natural gas, supercooled to 260 degrees below zero so it can
be transported by tankers - could rise to 21 percent of total US gas
consumption by 2025, according to the Department of Energy. Some
economists who have looked at the issue say it could easily rise to
25 to 30 percent by then. That's roughly the share of oil imported
to the US when the first energy crisis hit in the 1970s.
"There are certainly people who are worried about the US trading
one form of energy dependence for another," says Reid Detchon,
executive director of the Energy Future Coalition. His group
recently proposed a plan for added US energy security that includes
LNG imports - but only warily. "If LNG became a principal source of
energy for the US and demand rises around the world, we're going to
have problems in the future similar to those that we have with oil
today," he notes
There are some mitigating factors, however. For one, nations with
the potential to export LNG may be more numerous and far more
geographically diverse than the current oil-producing nations, some
Known global reserves are estimated at 5,500 trillion cubic feet.
To tap that, more than 60 new LNG liquefaction facilities that can
chill the gas to a liquid for transport are in planning or
construction phases, according to Henry Lee, director of the
Environmental and Natural Resources Program at Harvard University.
Norway, Russia, Egypt, Iran, Venezuela, and Peru, among many others,
hope to join Indonesia, Oman, Algeria, Nigeria, Libya, Australia,
and the United Arab Emirates as exporters.
But building a liquefaction facility would require an upfront
investment of $1 billion or more. Once they invested that amount,
few nations would be likely to reduce production or cut off
supplies, Dr. …