Shell considers natural-gas-to-diesel plant in U.S.

As companies look to better exploit the growing U.S. supplies of natural gas, Royal Dutch Shell PLC has begun to consider the construction of a natural-gas-to-diesel refinery, according to The Wall Street Journal.

Shell already owns a similar plant in Qatar, the small nation on the Arabian Peninsula that has become one of the largest producers and exporters of natural gas in the world. The $18 billion plant has been operating since last June, but Shell hopes that the U.S. facility would cost no more than $10 billion.

The new natural gas refining plant would be located in Louisiana, at the heart of the U.S. energy sector. The state is one of the largest benefactors of the recent surge in shale natural gas production and a primary reason for the fossil fuel's recent dramatic drop in price. Natural gas prices have fallen roughly 50 percent since last year, while diesel prices have risen 4 percent to a record high level.

Switching some larger vehicles to compressed natural gas has already been suggested as a way for the U.S. to reduce and stabilize transportation costs, but this would require a substantial investment in new infrastructure.

More information on unconventional natural gas sources can be found at PennEnergy's Research area.

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