How Natural Gas Liquids (NGLs) Power the World

Natural gas liquids, or NGLs, are a set of hydrocarbons with multiple uses, from making plastics to rubber tires to heating our homes. 

But their very name provokes questions, such as how can something be both gas and liquid? A slew of acronyms like LPG and LNG add confusion to this alphabet soup of the energy world. 

To get a good grasp on the subject, let’s go back to basics and strip natural gas liquids to their simplest form, mimicking the petrochemical industry that produces NGLs. 

What Are Natural Gas Liquids (NGLs)? 

The natural gas we use at home or the oil we need in our vehicles differs significantly from the raw materials. NGLs are a classic example of this differentiation in name and use. 

Companies extracting crude oil, shale oil, or natural gas bring valuable gases and liquids to the surface during drilling or hydraulic fracturing. Natural gas liquids are a group of hydrocarbons that are a by-product of these natural gas processing or crude oil refining processes. 

Homeowners, industry, and commerce all use NGLs, from petroleum products to stoves for camping. 

What’s the Difference Between Natural Gas and Liquid Natural Gas? 

Methane is the most well-known natural gas to come from natural gas wells, but it’s not a natural gas liquid (NGL). 

Instead, methane is a liquefied natural gas (LNG) and, in fact, the only LNG. It’s commonly used to heat our homes or burned at power plants to create electricity.  It gained this name because it contains very few NGLs and other impurities. 

So, while LNG and NGL come from the same process and have similar uses and acronyms, they are different. 

What Are the Main Types and Uses of Natural Gas Liquids? 

The principal natural gas liquids and their uses are: 

• Ethane is a colorless and odorless gas used to make products like plastic bags, plastic water bottles, anti-freeze, and detergent. It can even turn into polyester for clothing. 
• Propane is colorless and often a heat or cooking source for homes, lighting BBQs and small stoves, and powering industrial furnaces. 
• Butane, or normal butane, may be found in plastics, solvents, synthetic rubber, cigarette lighters, and portable stoves. It’s also used in topical sprays to put the whip in aerosol whipping cream. 
• Isobutane is an alkylate used to create gasoline for vehicles to reduce emissions. It’s also a refrigerant known as R-600a utilized in domestic refrigerators. 
• Pentane is most recognizable as the blowing agent that helps create polystyrene structures. Pentane is also present in solvents. 
• Pentane Plus is also known as natural gasoline and is blended with vehicle fuel and ethanol. It can also help with oil sand extraction, helping to dilute the heavy crude oil to make it ready for transportation. 

These are the most common NGLs. There are more that come under the umbrella name of hydrocarbon gas liquids (HGLs), including ethylene and butylene. 

How Are NGLs Produced?

 

Companies drilling for crude oil and natural gas use pipelines to draw a natural gas stream to the surface. This could be an oil well, gas well, or condensate well. A condensate usually draws little or no crude oil, extracting what is called “wet gas.” In contrast, dry gas comes from wells where the natural gas is at least 85% methane, therefore containing less NGLs. 

This raw natural gas comes to the surface containing a mix of hydrocarbons. Each NGL has a different temperature at which it changes from gas to liquid. Natural gas processing plants use a distillation process in a fractionator and are left with fractionated natural gas liquids. 

Each NGL reaches its required boiling point and is separated from the natural gas stream. It is now one of the hydrocarbon liquids mentioned above. Some of these “boiling points” are incredibly cold, as low as -148 degrees Fahrenheit (-100 degrees Celsius). 

These new, multi-temperature liquid forms of gases, our natural gas liquids, are now ready for transportation and use across industries. It’s easier to transport, store, and consume NGLs in a liquid state compared to their gas state. Only specialized pipelines, trucks, and ships may carry these NGLs because they require a high-pressure and low-temperature environment to remain in their liquid state. 

NGL vs. LPG vs. LNG 

A few other acronyms are bouncing around in the NGL field, so it’s worth taking a closer look to understand the differences. 

Liquefied natural gas (LNG) is the liquid form of natural gas, predominantly methane. LNG is too bulky to transport in its gaseous state. Gas companies cool it to -259 degrees Fahrenheit (-161 Celsius) to get the natural gas into its liquid state. It’s now around 600 times smaller than room-temperature natural gas, making transportation easier. 

LPG, or liquefied petroleum gas, is where things get a little confusing. LPG is propane, butane, or a mix of the two. Adapted vehicles can run on LPG. Propane and butane are LPG and NGLs and come under the umbrella term for all these hydrocarbon gas liquids, called HGLs. 

What Is the Difference Between Natural Gas Liquids and Condensate? 

Condensate is the name given to the raw natural gas as it comes from the source to the wellhead. Therefore, this condensate contains a lot of NGLs, but is not an NGL; it’s a mix of gases. In contrast, natural gas liquids are a defined group of individual gases. Each NGL is separate, including ethane, propane, butane, isobutane, and pentane. 

Why Are Natural Gas Liquids Gaining Popularity? 

Natural gas liquids are also known as petrochemical feedstocks because they can convert into many valuable materials for the petrochemical industry. In recent years, the increase in oil prices and natural gas prices has meant an accompanying steady growth in production.Natural gas liquids are also known as petrochemical feedstocks because they can convert into many valuable materials for the petrochemical industry. In recent years, the increase in oil prices and natural gas prices has meant an accompanying steady growth in extraction. 

Moreover, technological advances in natural gas extraction and crude oil drilling techniques have made more NGLs available to oil and gas companies. 

These changes have led to an increased availability of NGLs and, with more uses, increased demand and value. These factors have opened up new revenue streams for gas and oil companies, coupled with higher prices for NGLs. A better bottom line has spurred these companies to increase extraction. 

Which Countries Produce the Most NGL? 

The United States produces more natural gas liquids than any other country, followed by Saudi Arabia, Canada, Mexico, and Russia. 

However, America’s rise is recent. NGL extraction in the United States has grown rapidly since the so-called Shale Oil Revolution of 2008. Shale fields were developed following the 2008 global market crash, allowing the country to lead the world’s natural gas and crude oil extraction. 

According to the U.S. Energy Information Administration (EIA), the country’s NGL extraction has almost tripled between 2010-2022, making it the world leader in NGL extraction. The U.S. also has the largest LNG export capacity. In 2022, it set a record for global trade in liquefied natural gas, producing 51.7 billion cubic feet daily. This surge came in part from Europe’s demand for alternative gas supplies following Russia’s invasion of Ukraine. 

How Do Natural Gas Liquids Contribute to Energy Security? 

Natural gas liquids’ strengths are their flexibility. NGLs can become building blocks for everyday plastics, clothing, vehicle fuel, and heat for our homes. 

This multiplicity brings more energy security to the countries that have NGLs. Diverse energy supplies, from fossil fuels to renewable sources give grid operators, industries, and people more options. There are backups if a power plant fails or a global shock like COVID-19 arrives. 

Maximizing resources is also good energy housekeeping. By-products from crude oil and natural gas extraction shouldn’t be wasted, making NGLs a crucial part of the energy chain. These benefits spill over into economic ones, creating jobs and growth. 

What Are the Environmental Considerations and Impacts of Natural Gas Liquids? 

Despite these benefits, there’s no escaping the fact that natural gas liquids are hydrocarbons, which means they are fossil fuels. Their principal components are carbon and hydrogen. 

That means, once burned, they release carbon dioxide into the atmosphere, accelerating climate change and warming the planet. NGLs turned into plastics add to environmental problems. Plastics made from ethane, like plastic bags and water bottles, are a blight in oceans, streets, and land if not disposed of properly. 

Petrochemical industries can cause pollution in their extraction processes when turning NGLs into tires or solvents. A rubber tire in a landfill site may take 50-80+ years to decompose, leaching chemicals into the land. 

It also requires lots of energy to separate NGLs from natural gas and maintain them in their high-pressure, low-temperature liquid state. There’s a carbon price for constructing, maintaining, and running the required fractionation plants. 

NGLs are expensive to handle, transport, and store, requiring specialized equipment. Many extraction sites don’t have this infrastructure at present; building it all will take valuable resources and add more carbon dioxide to the atmosphere. 

So, while NGLs are considered by some to be the best use of resources already being drawn, they’re also polluting, energy-hungry, volatile, and climate-change-inducing fossil fuels. 

What Is the Current Market Outlook and Trends for Natural Gas Liquids? 

Despite NGLs being a fossil fuel and many countries aiming for net-zero emissions by 2050, the outlook for natural gas liquids is positive with yearly growth rates of about 6.5%. Around 45% of that growth may come in the United States as it cements its place as the world’s NGL leader.  

Some of this stems from the fact that many leaders are choosing to burn “cleaner” natural gas and its by-products than the more polluting coal or oil to power their countries. This may reduce emissions, but nowhere near as much as replacing power plants with renewable energy sources like wind or solar power. 

Natural Gas Liquids: A Complicated Picture 

NGLs are a series of gases that can be distilled from the raw natural gases drawn from natural gas and crude oil extraction sites. 

Once in a liquid state, these gases can be stored and transported worldwide for use in many industries. They can heat homes, become plastics, power automobiles, and even become clothing. NGLs, therefore, play a crucial and helpful role in maximizing the resources we extract. 

However, their status as a fossil fuel only exacerbates climate change, pushing more carbon dioxide into the already warming atmosphere. The plastics they create litter every corner of the globe, harming humans, wildlife, and the environment. Despite this, the NGL market is set to grow in the coming years. 

Fossil fuel power plants still dominate electricity generation, including natural gas power plants, whose raw material births NGLs. Signing up for a green energy plan is just one way to help reduce your carbon emissions and help protect the environment. 

Brought to you by justenergy.com

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