Liquified Natural Gas Risks Becoming a Bridge to Nowhere
Liquified natural gas was supposed to provide an energy bridge between coal being abandoned and renewable sources coming online. That looks increasingly unlikely.
Photographer: David Hecker/Getty Images EuropeThe conventional wisdom says liquified natural gas is the future of energy — bridging the gap between the world abandoning fossil fuels and renewable supplies coming online. But that rosy outlook faces a reckoning. LNG is threatened by a pincer movement involving, ironically, the two old and new sources it’s supposed to bridge: coal and solar.
The cracks in the bridge could not have appeared at a worst time. The LNG market is about to witness its third big wave of increased supply in 20 years. If demand growth is weaker than expected, the only way the market would rebalance is via much lower prices.