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June 28, 2006     (512) 463-0300

SENATORS HEAR TESTIMONY ON NATURAL GAS AS ALTERNATE FUEL SOURCE

Senator Troy Fraser of Horseshoe Bay and Senator Kel Seliger confer at Wednesday's meeting of the Senate Natural Resources Committee.

Texas is poised to lead the nation as an entry point for liquefied natural gas, Texas Railroad Commissioner Victor Carrillo said in testimony before the Senate Natural Resources committee on Wednesday. The Lt. Governor charged this committee with consideration of the increasing use and processing of liquefied natural gas (LNG) over the interim.

LNG is simply natural gas, used for heating homes and water, and as fuel for vehicles, cooled to -260 degrees Fahrenheit. This process reduces the volume of the gas 600 times, which makes it easier to contain and ship from overseas. Once LNG arrives in the US, it is delivered to a supply terminal, where it is warmed and put directly in the pre-existing gas pipeline network. The price of natural gas has increased in recent years, making LNG importing economically feasible.

Commissioner Carrillo testified as to the readiness of Texas to increase processing facilities for this burgeoning industry. There are plans to build six supply terminals in Texas along the Gulf Coast, with an additional five plants planned for Louisiana. One of these Texas facilities has already begun construction near Freeport, and plans to begin operation in late 2007. The rest of these facilities are scheduled to come online by 2009.

Carrillo added that Texas is distinctly qualified to take advantage of the expanding LNG market. The state's proximity to the Gulf of Mexico and its history of energy production make Texas the ideal place to site new LNG terminals. "Texas has a tremendous potential, I believe, to again lead the nation in developing a key energy resource that will benefit not only our state but the nation as a whole," he said. "Our unique combination of demand concentration, extensive pipeline distribution infrastructure, our energy expertise and our pro-business philosophy will enable the Texas Gulf Coast region to be the dominant entry point and activity hub for US natural gas imports."

As an alternate fuel source for vehicles, LNG is best suited to large freight or mass transportation carriers, as storage tanks for LNG are heavy and cumbersome. The Environmental Protection Agency estimates that burning LNG as opposed to diesel releases 50 percent less nitrogen monoxide, which combines with ozone in the atmosphere to produce acid rain. LNG also costs between 10 and 15 percent less than diesel.

Carrillo testified that the state is making progress in attracting the LNG market to the state. Past legislation, support from state leadership, and fewer bureaucratic hurdles to new facilities have contributed to the approval and construction of new projects. "We encourage Texas LNG facility development, to help establish the Texas Gulf Coast as the dominant entry point and hub of activity for US natural gas imports. Through [past Legislative] efforts, I believe Texas has sent a unified message that is now beginning to pay dividends, and will pay more dividends as these LNG facilities are established in the next year and into the next few years," said Carrillo.

Session video and all other webcast recordings can be accessed from the Senate website's audio and video archive pages.

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