Natural Gas

How Can MS Leverage Natural Gas Strengths for Industrial Growth?

MEI partnered with ANGA to identify specific growth opportunities related to Mississippi’s abundant natural gas supply. Click below to see the results of our research.

Volume 1: Introduction and Overview 

Volume 2: Energy-Based Chemical Manufacturing

Volume 3: Power Generation and LNG Export & Application Opportunities 

Mississippi’s Strong Natural Gas Infrastructure

Mississippi has for decades been a major natural gas player, with some production but with an abundance of pipelines and geologic storage capacity. In recent years, Mississippi actually has more nat gas flowing both into and out of the state than any other state. As we saw with extreme temperatures last winter, the ability to transport and store nat gas is critical to meeting demand in peak demand periods. The NE US experienced significant supply issues, which corresponded with absurdly high prices, while the South was able to meet its demand because of its surplus infrastructure and storage capacity. You only have to compare natural gas prices in Mississippi and New York last January to see the difference. From the supply side, while much focus is often on production, storage and deliverability are equally as important.

Below you will find a detailed map of Mississippi’s NG Infrastructure.

Natural_Gas Asset Map

Leveraging Mississippi’s Natural Gas Strengths

MEI partnered with ANGA to identify specific growth opportunities related to Mississippi’s abundant natural gas supply. Click below to see the results of our research. 

Volume 1: Introduction and Overview 

Volume 2: Energy-Based Chemical Manufacturing

Volume 3: Power Generation and LNG Export & Application Opportunities 

Global Demand and Inexpensive Natural Gas are Increasing Domestic Plastic Production

Via Energy Information Agency

Low U.S. natural gas prices have helped increase domestic plastic production after a decline from the 2008 recession. Because many U.S. plastic manufacturers use natural gas as their primary fuel source and natural gas-sourced liquids as a feedstock, continued low prices for those resources could boost raw plastic exports, given higher foreign energy prices.

The United States supplies raw plastics, sometimes called resins, to domestic makers of plastic products, such as food packaging and toys. Raw plastics are also exported. During the economic downturn in 2008 and 2009, U.S. production of plastic products declined further than raw plastic production, and has been slower to recover. Demand for raw plastic from other parts of the world, such as China, remained strong, keeping U.S. plastic resin production from falling further and enabling it to recover faster. Given the inexpensive and versatile nature of polyethylene and polypropylene plastics, demand for these plastics grew rapidly since the late 1990s, both domestically and abroad.

The plastics industry includes the production of bulk plastic resin (often as pellets) as well as the production of plastic products that are sold commercially, such as milk jugs and toys. Plastic resin production is one of the largest energy consumers in the manufacturing sector, estimated to consume almost a quadrillion British thermal units (Btu) in 2010 for fuel and non-fuel uses, and providing nearly $84 billion of shipments in the U.S. economy in 2011. The energy required to make plastics has decreased markedly since 2002, suggesting some efficiency improvements in plastic production, along with structural changes, such as new products or technological advances.

Global Plastic Demand

Atmos Announces Industrial Initiative

Energy infrastructure is a key strength of the U.S. economy and a critical driver of industrial project siting. Mississippi, with over 10,000 miles of natural gas transmission pipeline, has abundant supply potential fitting for industrial growth. Forward focus on energy infrastructure enhancements to further increase Mississippi’s energy strengths will serve the state well in the highly competitive economic development contest among states.

Last week, Atmos Energy announced it will begin construction of 23 miles of natural gas pipelines to three industrial parks in east Mississippi next year.

The project is expected to be completed in three phases over six years without using any public funds.

David Gates, president of Atmos Energy and 2014 Chairman of the MS Energy Institute’s Board of Directors, said “When you’re going after these big and even medium size industrial prospects, they want everything. They want you to bring the site to them. They want a package, and this is part of that package,”

“It makes us now a player not just for heating a building, but for the manufacturing process, and natural gas used as an energy source. In the past where we may have been immediately eliminated because we didn’t have gas, now we will receive consideration by prospective companies.”

This initiative demonstrates the cooperation of Mississippi regulators, local leades, and business leaders to attract industrial investment and jobs into the state.

Plentiful Natural Gas Prompting U.S. Chemical Industry Resurgence

Bloomberg reports that cheap and bountiful natural gas is luring chemical industry operations back to the United States after they initially left for better access to cheaper materials and Asian markets. With proximity to Louisiana and Texas production and a myriad of natural gas pipelines, Mississippi should target these opportunities.

Mississippi Materials Corp. Fleet Embraces Natural Gas

Photo Credit: Greg Jenson, The Clarion Ledger

Photo Credit: Greg Jenson, The Clarion Ledger


Mississippi Materials Corp. is set to add 12 mixing trucks that will operate on compressed natural gas (CNG) to its fleet this month.

The company’s investment in the CNG powered trucks and construction of an on-site fueling station signifies a milestone not only for the company but for the industry as a whole as both commercial and individual use of CNG for transportation has seen little activity in Mississippi.

Because of the substantial infrastructure costs for refueling stations, fleet businesses have hesitated to move away from diesel or gasoline and to CNG. At today’s prices, CNG costs less than diesel on a comparative basis. With known natural gas reserves of supply at historic highs, heavy vehicle fleets may pay for the conversion to hedge against diesel costs. In order for CNG to be more widely used, more refueling infrastructure will be required. As with MMC, expect any fuel conversions to be within companies operating heavy vehicle fleets based out of a common location, as with concrete or waste collection trucks. With lighter vehicles running more intermittently, the economics of conversion or new vehicle premiums are less attractive.

Typically, states seeing more activity in CNG in transportation have offered financial incentives, such as rebates or tax credits, for associated costs.

UPDATE:

The Waste Management fleet of Jackson has also announced plans to utilize CNG vehicles for their daily routes in Jackson. That makes two Jackson companies supporters of CNG.

Mississippi in Play for LNG Exports Via Pascagoula

Five years ago, no one would have guessed the U.S. would be talking about exporting energy, but today, LNG exporting is an extremely hot topic in U.S. energy policy and something our state should heed much attention to.

The topic has spawned a national debate over whether or not the country should export energy to grow the energy economy at home or to limit exports to build U.S. manufacturing. As the Wall Street Journal wrote this past weekend,

Opponents argue that the natural-gas market is historically too volatile and that exports will contribute to higher domestic prices, harming U.S. consumers and crucial industries such as chemical manufacturing.

Exports to FTA countries, like Mexico and Canada, are approved, but the U.S. Department of Energy is considering 19 applications for facilities to export to non-FTA countries, like Japan and China. For Mississippi, with an import terminal in Pascagoula, the question is will the state play a role in the energy export economy or not?

The Mississippi Energy Institute embraces the export market and views exports as a way to grow the energy economy and believes that the state’s strong pipeline infrastructure (which you can see below) should be utilized.

(Click to Enlarge)
Pipeline Map

Chinese Firm Puts Millions into U.S. Natural Gas Stations

Plans to establish a network of natural gas fueling stations for trucks along U.S. highways are slowly coming to fruition from China’s ENN Group Co Ltd. The move is yet another example of China’s ambition to grab a piece of the U.S. shale gas boom. Read more here.