By Tom Doggett
New York (Reuters) - U.S. demand for natural gas will be strong enough in the future to support both a planned pipeline to bring Alaskan gas to the lower 48 states and the many liquefied natural gas import terminals that will be built, a top federal energy regulator said on Wednesday.
The Federal Energy Regulatory Commission has approved several LNG imports terminals and dozens more have been proposed. At the same time, a coalition of large energy companies is trying to work out the terms for building a huge natural gas pipeline in Alaska to supply the U.S. mainland.
The U.S. market will be able to absorb the expected boost in available gas from the two supply streams, according to FERC Commissioner Nora Brownell.
"There's room for both" because U.S. gas demand will also increase and prices will be high enough to make the projects profitable, Brownell said at the Reuters Global Energy Summit in New York.
However, she said "there's just no way" all the proposed LNG terminals will be built, not due to competition from the Alaskan pipeline, but because there will not be enough LNG imported to support them.
"I don't know what the magic number is," Brownell said. "I think the market will dictate what gets built and what doesn't."
LNG currently accounts for about 2 percent of U.S. natural gas supplies but imports are growing and could meet about 10 percent of total U.S. gas needs by 2010, according to government estimates.
The expected jump in LNG imports reflects the growing gap between domestic gas production and future growth in demand, especially from new power plants that are mostly fueled by natural gas. Continued...
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