Why terrorists will hate the new LNG world

For the speck of human history I have personally witnessed, it was an uncomfortable truth (and an unshakeable one) that the so-called developed world depended for its energy needs on some countries that may wish them no good. September 11 was only a culmination point of this long and uneasy history.

We cannot easily say that we did not try (in homeopathic doses) to wean ourselves off our addiction to imported hydrocarbons but who wants to take a reduction in lifestyle, even if that meant financing (directly or indirectly) some people that may wish to harm us? In simple words, we gave some of those who might want to kill us our money – to increase their ability to do so. Plus our presence on their lands further stoked their ire. Not smart but a reality we seemed had to live with so far.

No more. The unconventional gas revolution has already done more for US national security than all nation-building programs combined. It has shown oil-producing states that their projections are not even worth the paper they were written on. So far, any ruler of an oil (or natural gas) producing nation had always banked on one simple truth. No matter what happens, no matter what I do, I will get away with it because I have oil. And proceeds from oil sales would allow me to keep a restive population happy. Is that a good incentive to behave or to reform the country for the ultimate good of your people? Sure no.

The US was destined to become the world’s largest importer of LNG just a few years ago I like to remind you. Today it seems as if the lessons from this enormous blunder have not been heeded. But if oil producers thought that this was it – brace yourself, gentlemen, because this is far from over. The world has taken the blue pill and is coasting for the blue yonder. Shale oil leaves the US awash with domestically produced oil depressing oil imports to historical lows. Japan goes after Methane Hydrates and Eastern Europeans wean themselves off the bears’ grip with their version of shale.

It goes further still as oil-producing nations feel the strain and cannot keep their populations in check anymore. Ever more expensive measures to buy them off cost ever more money straining national budgets and eventually drying up funds for those who harbor ill thoughts.

A little better hidden from the occasional onlooker’s view something even more remarkable happens. A fundamental rethink of energy infrastructure. And this one is not bestowed by a benevolent government onto its citizens. This is bottom-up and purely motivated by people and businesses wanting to save some cash. It’s the Natural Gas as a fuel wave and it’s offshoot LNG as a fuel.

Not only are oil imports going down because of domestically produced shale oil but also because more and more people and businesses make the switch to Natural Gas and LNG as a fuel to propel their lives. It’s motivated only by the most fundamental instinct we still harbor from our archaic past. Survival. Businesses suffer from high oil prices and discover Natural Gas as the cheaper option. And they go for it because of the money they save. Suddenly people become aware that using Natural Gas instead of petroleum products for fuel is not only good for their wallet – it also is good for the environment. Everyone is an environmentalist if it’s free.

As this Natural Gas is domestically produced some regimes supporting terrorists are being denied funds to continue doing so. But as nice as this is to have, the real significance of LNG is somewhere else.

What’s a terrorist’s dream? Yes, hitting some large-scale infrastructure the society depends on. They use events, buildings, and other infrastructure. Bringing down power grids refineries or tank farms must be the basic routine workout for them as those places are the nodes of our energy network. We guard those facilities to prevent exactly this but now imagine if those facilities (at least energy-wise) just don’t exist anymore. They are gone, replaced with something that more resembles the internet today than the clunky large-scale energy infrastructure we know.

Now, how does the internet analogy hold up to new energy? Old energy was simple. We needed so many more MegaWatts of electricity. We built a massive power plant and injected power into the grid which then distributed it to whoever needed it. Simple but effective as it gets the job done. But is it energy efficient or indeed safe to do so?

Someone blowing up the hub (the power station or a switching plant) would cause massive blackouts as the source is disconnected from the user. Do you see how fragile this system is? Now imagine the internet would be construed in the same way. It would be impossible to work with.

How does the internet function then? It`s based on a loose system of servers, switches, and protocols. Any piece of data is packed into lumps which then receive an address to go to and then they are left to roam the internet until they arrive at their destination. If one particular lump does not arrive at its point of destination it does not matter to the system as a whole. The system is inherently flexible to deal with anything going down. Hence, if a piece of infrastructure goes down, traffic immediately rearranges around it producing minimal impact on the whole.

It’s very hard to bring down such a system, even through a large coordinated attack. It would immediately retool itself, reconfigure, and route traffic through functioning nodes spreading the load over the system.

That also assumes that one is prepared to ditch something we energy people have become very accustomed to. The notion of control that we can exert onto whatever we are dealing with. Energy insiders like to see the world as a closed system that has its own rules and is influenced very little by outside factors. Just look at the planning tools of most energy companies. They still think they can somehow control what the market is going to do. “We just need to develop that reserve to cover that shortfall of volumes” or “The market is going to grow this much and we only have to cover that” are staple statements I have heard over and over again from some of the biggest players in the trade.

But the world has moved on and as we have seen, such centralistic thinking (and the infrastructure buildup that comes with it) just plays into terrorist’s hands. We make it easy for them to bring us to our knees as all those monster power plants and refineries are juicy targets.

What does a new system then look like? CCGT (Combined Cycle Gas Turbines) gives you a glimpse of where it all goes. Microgeneration of fuels and power is the answer. You can hit a power plant but it is hard to take out thousands of micro-generational devices. As their energy conversion efficiencies are going through the roof and it still costs less to transport and store gas than electricity, they become an economic alternative to Godzilla power plants.

But it also makes up a much more complex world as it’s not anymore “We produce in one place whatever shortfall is there to be covered”. It’s now “What unit will be best able to deal with that mini shortfall by providing a perfect demand – requirements match?”. You want to produce the current as close to the consumer as possible as now you are dealing with many smaller devices in different locations you can bring effective grid load down significantly reducing the stress on the power lines. This saves cash as it reduces the need for grid construction and maintenance.

But back to the security thing. Have you ever mixed potato starch with water? The result is a goo that behaves strangely. It’s a liquid but if you smack it hard, it will not splatter like water. It will resist in some gooey manner, even break in some places. You can even walk on it if you keep moving but if you stop, you immediately sink in as the liquid opens and envelops you.

The new distributed generation infrastructure with LNG as a fuel is a bit like that. No matter how hard you hit it, it will flow around you and very soon it will be as if nothing has happened. That must give terrorists quite a shiver as it denies them their high-value targets – at least on the energy side of things.

It all gets even better when primary energy sources are produced right at the consuming site – or very, very close to it. And I am not talking about solar here. But this is for another post.