NCPA - National Center for Policy Analysis


May 25, 2004

Natural gas is a relatively cheap and domestically plentiful fuel. It became the preferred alternative energy source over 25 years ago in response to oil price hikes and supply shortages. But now that demand has outpaced supply, the United States must import more -- in the form of liquid natural gas (LNG).

Importing more LNG requires building additional ship terminals equipped to offload it. However, coastal communities from Harpswell, Maine, to Eureka and Vallejo, Calif., have defeated proposals for new natural gas terminals. Boston mayor Thomas Menino even fought to have an existing natural gas terminal shut down in nearby Everett, Mass., after September 11.

The creation of LNG terminals is imperative for the country economically and environmentally:

  • The lack of LNG terminals caused natural gas price spikes in 2003, says Federal Reserve Board Chairman Alan Greenspan -- and without new terminals, consumers will pay a premium of more than $1 trillion over the next 20 years.
  • Natural gas produces one-third less greenhouse gases than oil and 50 percent less than coal -- but if it is in short supply, consumers will likely turn to heating oil and coal.

Opponents of LNG terminals cite safety issues and the potential for terrorist attacks. Although liquid natural gas is not flammable, it is highly explosive in its gaseous form. However, since 1959, liquid natural gas has been shipped all over the world with very few incidents, and terrorists are more likely to target gasoline tankers than LNG tankers or ports, say observers.

Source: Editorial, "Boost Natural Gas Supplies," USA Today, May 24, 2004.

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