New Report Focuses on the Importance of Natural Gas Liquids

From Brookings:
The fundamental changes in the U.S. hydrocarbon production landscape are now widely acknowledged. Advances in exploration and drilling technology have led to a surge in domestic oil and gas production in recent years with profound economic and geopolitical implications. However, one important aspect of the U.S. unconventional oil and gas “revolution,” has gone relatively unnoticed: the rapid increase in the production of natural gas liquids (NGLs). NGLs comprise a number of hydrocarbon products that are produced in conjunction with methane (also known as “dry” natural gas), or as a byproduct of crude oil refining, and which are liquid at room temperature. NGLs include ethane, propane, butane, isobutane, and natural gasoline. While such commodities do not attract the attention that is shown to crude oil, gasoline, or natural gas, they are a critical component of the industrial sector’s ability to take advantage of the U.S. hydrocarbon resurgence, and will play a large role in the country’s ambitions for energy “self-sufficiency.”
Key points:
  • NGLs are a significant portion of what many international organizations refer to as U.S. “oil production.” It is important to recognize that roughly 2.5 mmbd of U.S. “oil” production is from NGLs, the majority of which are not substitutable for crude oil. 
  • NGLs will be essential for the revenues of gas producers during prolonged periods of low natural gas prices. 
  • Maintaining domestic oil and gas production is critical for U.S. NGL production and for the U.S. industrial sector. 
  • Domestic infrastructure is currently ill-situated to harness new production: investments in new pipelines and petrochemical facilities are often delayed by the regulatory and permitting process. 
  • U.S. NGL exports are important for reducing price volatility and incentivizing further production.
Read the report by clicking here.

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