• Created: Mon 7th Jan 2013
• Erin

With all the recent discussion about converting natural gas as a methane into a liquified product (LNG), additional talk is occurring about turning natural gas into diesel fuel and jet fuel.  Royal Dutch Shell and foreign energy companies/governments have been conducting research on this idea for more than a year.  As long as natural gas remains relatively cheap compared to other fuels, and diesel fuel is low in supply compared to its demand, this idea sounds promising.  Of course, prospective builders of natural gas to diesel plants require not just a short term low natural gas commodity price, but a 10-20 year supply of relatively cheaper natural gas prices.  There’s the rub – once the Panama Canal enlargement project is completed by 2015 and Gulf Coast LNG plants come on line for exporting to Chinese and Japanese markets, it is expected that U.S. natural gas will get a much needed shot in the arm with higher prices.