Pricing pipeline

If 10% of the U.S. gasoline consumption were replaced by methanol for a twenty year period, the required reserves of natural gas to support that methanol consumption would amount to about one trillion m (36 TCF) or twice the 1990 annual consumption. Thus the United States could easily support a substantial methanol program from domestic reserves. However, the value of domestic natural gas is quite high. Almost all of the gas has access through the extensive pipeline distribution system to industrial, commercial, and domestic markets and the value of gas in these markets makes methanol produced from domestic natural gas uncompetitive with gasoline and diesel fuel, unless oil prices are very high. 

Natural gas upgra ding economics may be affected by additional factors. The increasing use of compressed natural gas (CNG) directiy as fuel in vehicles provides an alternative market which affects both gas price and value (see Gasoline and other motor fuels Gas, natural). The hostility of the remote site environment where the natural gas is located may contribute to additional costs, eg, offshore sites require platforms and submarine pipelines. 

The appHcation that has led to increased interest in carbon dioxide pipeline transport is enhanced oil recovery (see Petroleum). Carbon dioxide flooding is used to Hberate oil remaining in nearly depleted petroleum formations and transfer it to the gathering system. An early carbon dioxide pipeline carried by-product CO2 96 km from a chemical plant in Louisiana to a field in Arkansas, and two other pipelines have shipped CO2 from Colorado to western Texas since the 1980s. EeasibiHty depends on cmde oil prices. 

The commodity nature of the product and the easy access to the Hcensed processes enable new producers, particularly in developing countries, to enter the global styrene merchant market with Htde experience in styrene technology. Access to ethylene, which caimot be easily transported by means other than pipelines, is a key factor in considering new styrene faciHties. Timing, or luck, is even more important because the supply and demand of styrene are seldom in balance and the price fluctuates broadly and rapidly as a result. Most of the time, the producers either suffer losses (1981—1985, 1991—1993) or enjoy handsome profits (1987—1990, 1994—mid-1995). Investments in styrene plants are known to have been recovered in less than a year, but prosperity encourages over-investment and lean years may foUow. 

Economic Aspects. Most hydrogen sulfide is made and used captively or sold by pipeline at prices which are highly variable, depending on locahty. Production ia the United States exceeds 1.1 X 10 t/yr-It has been estimated that 2.4 x 10 t/yr of sulfur are recovered from H2S-containing refinery streams and 1.8 x 10 t/yr of sulfur are recovered from H S-containing natural gas (120). 

Regulations also have a strong impact on natural gas supply, demand and prices. Exploration for and development of natural gas historically have been secondary to oil because of the high costs of transportation, as well as a complex transportation and marketing system that allowed tor U.S.-federally regulated interstate gas pipelines hut essentially unregulated intrastate pipelines. The natural gas supply shortfalls in 1977 and 1978 resulted in The Natural... 

In such diverse and sophisticated gas-using economies, security of supply and the efficient employment of producing assets depend upon an extensive network of pipelines that interconnect regions with diverse climates and diverse consumption patterns winter-peaking and summer-peaking demand that is climate-sensitive, business cycle-sensitive, and price-sensitive customers who place a high premium on continuity of supply, and those who are relatively insensitive to risk of interruption. These parties depend to a different degree, and place... 

Tn the early to mid-1980s, retail gas prices began to rise as the more expensive new gas constituted an increasing percentage of the pipelines average cost of gas. This drove consumer prices above the level that would exist in a competitive market, and demand for natural gas was subsequently reduced as large industrial customers switched to other fuels. Also reducing demand were the Fuel Use Act, which prohibited the use of natural gas as a boiler fuel, increased consen a-tion by residential and commercial customers, warnier-than-normal winters, and an economic recession. 

Tn 1985, the Federal Energy Regulatory Commission (FERC) began a series of regulatory actions designed to improve the competitiveness of the natural gas market and give the customers of interstate pipeline companies more seiwice options and thus allow ultimate consumers to benefit from deregulation of wellhead prices. 

Natural gas has replaced coal to a great extent for domestic and industrial heating. This is a consequence of installation of very large pipelines from producing to consuming places, the rise in solid fuel price, convenience, cleanliness, controllability and versatility as a fuel. The by-product gaseous fuels, coke oven gas and blast furnace gas are well-known important fuel for the ferrous industry, and require no further elaboration. 

Three factors favored construction of ammonia pipelines. First, over 50% of this country s agricultural nitrogen is used in the Midwest and between 40 and 65% of this total is applied directly to the soil as anhydrous ammonia. Second, the low price of natural gas needed for the production of ammonia favored a Gulf Coast plant site or one near a large gas field. Third, much of the Midwest is inaccessible to cheap barge transportation. 

The analysis showed, with various "value adders" (e.g., oxygen sales and carbon-emission-offset credits), the cost of wind-source gaseous hydrogen delivered by pipelines from production point to distant markets (about 200-1000 mi.) at an untaxed wholesale energy unit cost will be competitive with market prices (in 2005) of gasoline and hydrogen fuel made from natural gas by steam methane reforms (SMRs). 

In this respect, the specific investments for pipelines assumed here are rather conservative. Owing to the high steel prices, for typical long-distance natural gas pipelines (with a diameter of 10 inches or 25 cm) capital costs are currently... 

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