The international energy watchdog in Paris, IEA, forecasts that European Union (EU) natural gas imports will jump to 80% by 2030 from 44% now, while demand for natural gas will rise to 34% of the total energy mix from a current 23% unless the EU further legislates to boost the use of renewable energy. Projected import growth is largely caused by depletion of internal European reserves, such as the UK North Sea, the Netherlands Groningen field and the expansion of the Union by non-producing countries of Eastern Europe. By 2030 and without a new framework for renewables, Russian natural gas will account for 33% of imports while natural gas from Africa will account for 27% and Norway and the Middle East 17% each. As IEA specialist Fatih Birol states, "from an energy security supply point of view to rely so much on imports for its gas would be a very risky business."

U.S. demand is similarly expected to rise from 22.8 trillion cubic feet (tcf) in 2003 to about 33.8 tcf by 2020. U.S. Department of Energy figures paint a bleak picture for U.S. dependence on imported energy in the coming decades. According to American petroleum statistics, existing well-heads are currently depleted at 29% annually while demand for natural gas is expected to rise 2% a year. Imports from Canada, whose own energy demand is increasing, are projected to pick up some of the burden. Major other sources are Nigeria, Sao Tome, Trinidad, Venezuela and most probably the Persian Gulf.

U.S. Federal Reserve Chairman Alan Greenspan has drawn attention to the natural gas supply crisis and called for increasing liquefied natural gas (LNG,) imports to the U.S. LNG, natural gas supercooled for transport purposes, accounts for about 5% of global natural gas consumption, according to the BP Statistical Review of World Energy. The U.S. accounts for 1% of that. In 2000, the U.S. imported 226 billion cubic feet (bcf) of LNG - less than 10% of the 2.6 trillion cubic feet (tcf) imported by Japan.

At present there are not more than a handful of LNG import terminals in the U.S.: Lake Charles, Louisiana; Everett, Massachusetts; Chesapeake Bay, Maryland; Elba Island, Georgia. Most routes of LNG tankers would traverse populated areas, presenting potential risk factors. Due to the fact that most LNG producing areas are in Africa, the Middle East or Latin America, tankers have to be used to transport the LNG to the appropriate markets. Most production facilities are based in the Middle East, Africa and the Far East.

LNG export and transportation present several issues. One of the major obstacles is the current lack of an efficient worldwide LNG (and natural gas) infrastructure. U.S. natural gas pipeline infrastructure utilization rates are around 72% (1997), and some analysts are warning that in the Northeast and California a 100% rate has been reached. The American Pipeline Association has called for building around 3,200 kilometers of pipelines each year until 2010 at projected costs of around $2.5 bln a year. There are also not enough regasificiation plants and storage facilities.

Prior to the September 11th terrorist attacks, the major security issue considered in LNG infrastructure approval was accidental leakage from LNG storage and processing facilities. Residents of densely populated regions where LNG plants were planned expressed fears that gas could escape, congeal and possibly ignite. For nearly 50 years now, all discussions of risk and probability in LNG transport have focused on how to account for human errors. No real threat analysis was performed to find out possible vulnerabilities in transportation and storage procedures that could be utilized by terrorists.

The present situation requires taking into account the likelihood of terrorist attacks on LNG infrastructure. The idea that terrorists could attack an LNG tanker or site with aircraft on a suicide mission must be recognized as possible. LNG terminals and tankers present especially attractive targets. While fires in petrochemical or petroleum plants tend to burn out quickly, LNG fires do not stop until all gas is consumed. As a result of the September 11th attacks, new guidelines were implemented to cope with possible threats. On the 27th of September, 2001, the LNG tanker Matthew, operated by a Norwegian shipping company, was denied entry into Boston Harbor, where it had a scheduled delivery. This was one of the first security blockades constraining energy supply to the USA and Europe. An initial report completed in January 2002 for an LNG import terminal proposed for Mare Island, in San Francisco Bay, included discussion of catastrophic risks as well as consideration of potential terrorist threats.

LNG has been projected as the fuel of the coming decades; security threats to possible projects are thus likely to dent current economic growth forecasts. Sea transport and the necessity of immense gas plants will only constitute further security threats in the years to come.

Dr. Cyril Widdershoven is the editor of Global Energy Security Analysis (GESA) and Associate Fellow at the Institute for the Analysis of Global Security.

Also see:
Greenspan warns on implications of natural gas shortage

The U.S. faces a shortage of natural gas

Fueling the Future: The Prospects for Russian Oil and Gas by Fiona Hill and Florence Fee


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