The United States has one of the world’s largest natural gas reserves. The largest three gas reserves are in just three countries, Iran, Qatar and Russia, making up 56% of the world’s supply. CBS’s program 60 Minutes featured Qatar on July 1, 2012. It showed a massive natural gas liquefaction plant and talked about how expensive it was to build. What’s the problem with natural gas?

It’s one of transporting, especially when long distances are involved. There are only two ways out of Qatar. One is through Saudi Arabia’s deserts, the other is by sea, of course much preferred.

Oil is relatively easy to transport, by pipeline, ships, trains and trucks. Natural gas, however, is a gas. It’s much more voluminous than oil. It takes up more than 600 times as much space as the equivalent energy value of petroleum. Being a gas, only pipelines make sense to transport it over large distances. This is possible within the North American continent, but it gets very difficult when crossing of oceans is involved.

To transport natural gas, it must be in liquefied form. This is called liquefied natural gas or LNG. At normal earth temperatures, natural gas takes up 600 times as much space as petroleum. Only when it is liquefied does it become more compact. However, liquefaction requires cooling the gas to minus 260 degrees Fahrenheit to turn it into a liquid. This temperature must be maintained in especially designed tanker ships during transport to distant locations. Upon arrival, it must be turned back into gas through a process called regasification. The complete train of liquefaction and regasification is extremely difficult and very costly. Plants to perform those processes can cost several billion dollars. Due to the high costs of building such plants, they must operate for several decades for the financiers to get their money back before they turn a profit.

In summary: Natural gas reserves are an effective source of energy if the consumption occurs close to the extraction locations. Otherwise it is an expensive and complex process that needs to be factored into the overall economics.