Aspen Joins Expert Team Exploring U.S. LNG Export To Taiwan

Aspen energy policy economist and natural gas expert Catherine Elder spoke at a Natural Gas Development Summit held in Taipei in mid-November. The Summit was hosted by the U.S. State Department and Taiwan’s Bureau of Energy and was staged by the Taiwan Institute of Economic Research. The purpose was to support ways the U.S. and Taiwan can work together, with specific emphasis on exploring opportunities for Taiwan to purchase liquefied natural gas (LNG) from the U.S. Led by former California Energy Commission siting and policy manager Dave Maul, additional members of the U.S. energy expert team included Assistant Administrator of the U.S. Department of Transportation’s Maritime Administration Keith Lesnick, and China expert Dr. Steven Lewis from the Baker Institute for Public Policy at Rice University. The team offered insight into how the shale gas revolution could make US natural gas available for export, the conditions that would affect sale to Taiwan, and how to communicate with the public to successfully site new LNG import and other energy facilities. It also described world gas supply and demand dynamics and export facility status.

The US team met briefly with the Deputy Minister of Economic Affairs in Taiwan, who then kicked off the Summit with American Institute Deputy Director Brent Christensen. More than 100 people attended the Summit, including officials from the electric utility, TaiPower, the fuel utility, CPC Corporation, and various university and economic research institutes. Ms. Elder explained how horizontal drilling and hydraulic fracturing allow access to source rock for natural gas and oil deposits, how US natural gas demand may change over time, and about the renewed likelihood that LNG will be available from Alaska, if not the Lower-48.

Taiwan faces the problem that it must import fuel to generate electricity. Its electricity rates are said to be below the cost of service and raising them puts extra pressure on the competitiveness of its export-oriented economy. While it has a feed-in tariff and solar hot water heaters are frequently seen, only 2% of its generation portfolio to date is renewable. The island also possesses geothermal resources that have not been developed. With 40% of its power generated with coal and three 30-year-old nuclear reactors, Taiwan needs access to more natural gas to help transition its power generation portfolio. Taiwan’s energy planners face a public interested in reducing reliance on nuclear power but that is perhaps not yet fully engaged in an informed and transparent public discussion of energy objectives, options, and siting needs, such as we experience in California.

Before leaving Taipei, the team spoke to students at National Chengchi University’s Institute of International Relations who were interested in the environmental impacts of shale gas production and how shale production might unfold on the Chinese mainland, particularly given the lack of water in eastern China where the shale deposits are located. The team later gave an interview to a Taiwan wire service reporter to talk about LNG and was treated to a formal luncheon in honor of US Energy Experts at the residence of American Institute in Taiwan (AIT) Director Christopher Marut.

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