Market Analysis & Trends

Market analysis Summary

The Gas Processing Group will target acquisitions to gas rights and sites (locations) for the conversion and production of LNG; primarily emphasizing enhanced oil and gas recovery wells, stranded gas wells, and other renewable sources such as landfill and waste water treatment facilities to produce Bio Methane to LNG.

Analysts suggest that substantial market opportunities will evolve throughout the small to medium scale LNG industry in the next decade; and the companies who seize the opportunity early on will be well positioned for growth if entry risks are managed properly. The International Energy Agency (IEA) estimates a minimum need of $26 trillion to be invested over the next 25 years in order to meet the surging energy demand and to offset reserves of the world’s major oil fields.

Energy & Environment, Inc.’s long term objective is to expand LNG operations and to become a major player by installing and owning multiple LNG production facilities at strategically selected locations. We have developed a special model and target market for LNG production facilities and sites that will give us the edge we need to remain ahead of the competition. In the meantime, E&E initiated negotiations to establish strategic relationships with major distributors of LNG products, for both sales and delivery.

Market Potential

Natural Gas and Liquefied Natural Gas (LNG) are the most desired components of the fossil fuel sector. As the cleanest source of fuel for combustion, its application has become an essential feed-stock for manufacturing of agricultural fertilizers. Current development efforts in commercializing renewable energy resources address only a fraction of the demand in global energy growth.

Energy costs, finite supply levels, and global environmental concerns about Climate Change are forcing the market to look for substitute resources and technologies to meet the future demand while addressing the effect of Greenhouse Gas emissions.
LNG, fuel produced from Natural gas, is priced significantly lower (30%-40% on average) than diesel, gasoline, as well as propane and butane fuels. In California, the economic and environmental advantages together, resulted in Los Angeles Municipal Mass Transportation agencies to switch to LNG and natural gas. The Port of Long Beach in Southern California has embarked on truck conversion programs with the intent to significantly reduce municipalities’ emissions; conversion to LNG independently offers significant economic benefits in addition to emission reduction. Similar actions and trends are being implemented in major cities including San Francisco, New York and Chicago.

Globally, the conversion of fleet trucks, buses, and passenger vehicles to Natural Gas and LNG has gained momentum. The United States, Canada, Europe, Japan and Russia are the largest consumers of this commodity with internal distribution networks of LNG pipelines. China, Taiwan, Korea, India, Mexico, and South American countries are increasing Natural Gas process utilization.
In the United States more Gas fired Power-plants are being built and Coal fired ones being retired.

Market Trends & Metrics

The direction in the energy market is to reach a unit cost calculus or a unified denominator which is $ per MMBTU (Million BTU) or $ per kCal. At this time the current price of oil being traded is about $86-$96.00/Barrel and is expected to stabilize near $106 by 2012. At 42 Gallons per barrel, and calculated at the price of $90 per Barrel, would yield an average price of $15.00 Per MMBTU.

The estimated cost of gasoline in BTU is currently $34.00 per MMBTU; equivalent to $3.00 per gallon. For the consumer and the end-user market, LNG is approximately $1.50 /gallon, significantly lower than the cost of Gasoline or diesel fuel for those “converted” cars and trucks. This is 30%-40% lower a significant cost saving.

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