2/12/16

Ming Zhao (mz2377)

BUSI W 3702: Venturing to Change the World

As Marc Andreessen said, software is eating the world. But meanwhile that doesnt exclude other nonwireless non-micro disruptive trends from taking their stabs too. The energy market as of late (as of always) has
been quite volatile and global-angst-inducing. On the one hand, environmentalists erupt in protests every day
about the harmful effects of fracking; on the other hand the USA is rapidly rising as a global energy superpower,
increasing our tension with the Arab nations. It seems like the perfectly wrong time or maybe the perfectly
right time to introduce FLNGs (floating liquid natural gas).

These vessels (predicted to come to market in prelude form beginning first half of 2017) enable on-site natural
gas conversion and compress gas 600 times to allow assets previously stranded at sea now reach land via ships.
This opens up a huge reserve of hydrocarbon supply and may potentially catapult gas to overtake oil as the
worlds dominant energy supply in power generation. Current barriers on gas development include the costs
associated with processing for local markets, the transportation difficulties given expensive pipelines, elevated
liquid prices, and geopolitical sanctions/turmoil with Iran and Iraq. As a result, an estimated 52% of ex-North
America natural gas reserves are stranded.

Where FLNG swoops into the scene of the global energy crisis is its potential to dramatically lower costs while
simultaneously minimizing environmental footprint (two goals traditionally mutually exclusive or at least
somewhat at odds with each other). It reduces marine wildlife disturbance by reducing the need for giant
physical pipelines and although initially expensive to build, FLNGs reduces variable costs of production. Plus,
its cool to be able to carry natural gas energy as if a mere cell phone battery pack with you on a ship from the
US to Egypt and then back.