"For much of the state of Maine, the environment is the economy"
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28 Nov 2008
Environment Proposal to use salt caverns to store natural gas is a 'prospect' not a 'project'
While providing storage for natural gas for Canaport LNG has been on Miller's radar, he said that facility is just one possible commercial user. He said because there are no immediate needs at Canaport for underground storage, Corridor is not banking on that project sealing any deals for Corridor.
"However, current market conditions severely hamper the construction and development of LNG terminals in the U.S., and a reconfiguration of the Crown Landing project must be developed, filed with the commission, and approved by the commission before construction can even begin."
Webmaster's Comments: Even energy powerhouse BP with its FERC permit already in hand is stalled in developing an LNG import terminal. Downeast LNG and Calais LNG projects are futureless pipe dreams.
Dexion10, meanwhile, thinks that an oversupply of natural gas will ultimately hurt Cheniere's prospects: "It costs about 5.50 to import LNG to the U.S. but we can drill for nat gas for $3.50 and we have an over-supply of it in the ground..... this thing is toast." [Red & bold emphasis added.]
Webmaster's Comments: Imported LNG costs 57% more than domestic natural gas, and there's a domestic natural gas glut. Those are just two of the many reasons why Downeast LNG and Calais LNG have no future.
The report takes a look at the gas industry deregulation in Europe, Asia, Asia Pacific, North America, South America, Africa & even the Caribbean. The report looks at each country in these regions and analyzes the natural gas market, LNG market in each country, deregulation developments, or in some cases privatization of the gas market, and much more.
26 Nov 2008
Kitimat LNG in September announced plans to develop the terminal to take advantage of rising natural gas demand and prices in Asia as well as increased supply in North America. [Red emphasis added.] (Nov 25)
Webmaster's Comments: This is one of six LNG export projects now in play in North America. LNG can't compete with domestic natural gas supplies and prices.
Challenges FERC permit approval policy for LNG terminals
[T]he New York departments of state and environmental conservation claim that FERC violated the federal Coastal Zone Management Act, the Clean Water Act and the Natural Gas Act when it issued permits on March 20 to Broadwater Energy LLC and Broadwater Pipeline LLC….
FERC has issued such permits expressly conditioned on approval by the required state agencies pursuant to the CZMA and Clean Water Act. At least two states, Washington and Delaware, already are challenging FERC's practice of issuing such conditional permits before state review is completed and approvals or certifications are issued by state agencies. Those actions are now pending before the U.S. Court of Appeals in Washington, D.C.
The question, according to a brief filed by Washington state in its lawsuit against FERC, is "whether the Federal Energy Regulatory Commission can, through policy and practice, rewrite the terms of federal statutes" that require prior state approval. [Red & bold emphasis added.]
Webmaster's Comments: Save Passamaquoddy Bay alliance member Nulankeyutomonen Nkihtahkomikumon (NN; We Take Care of Our Land) is suing the Interior Department's Bureau of Indian Affairs (BIA) for reasons similar to the above suits against FERC.
The BIA gave its approval to a lease agreement between Pleasant Point Passamaquoddy Tribal Government and Quoddy Bay LNG for an import terminal on Indian Trust Land but without the BIA having performed the studies required of the agency by Federal Statute. In fact, the BIA never intended to conduct the studies, but passed the buck to FERC, for FERC to conduct at a later time long after BIA's approval.
Both FERC and the BIA appear to have similarly irresponsible methods of operation, and are rightly being taken to legal task for doing so.
Webmaster's Comments: Unlike the proposed and…
- Inappropriately-sited Downeast LNG;
- Inappropriately-sited Calais LNG; and
- Inappropriately-sited and now-defunct Quoddy Bay LNG
…the Port Dolphin LNG terminal is in keeping with world LNG industry terminal siting standards (see LNG Terminal Siting Standards Organization and SIGTTO). Read more about the Tampa Bay Port Dolphin Energy LLC LNG project that's 28 miles offshore away from civilians.
Jen Snyder, head of Wood Mackenzie North American Gas Research, told Platts LNG Daily that she expects LNG imports to the United States to continue to increase over the next several years because cargos under existing supply agreements are expensive to divert and LNG suppliers will send some gas to North America in order to keep LNG prices in Europe and Asia relatively high.
Webmaster's Comments: For Wood Mackenzie's forecast to make sense, LNG prices would have to be low enough to compete with domestic natural gas. Such low LNG pricing would make importing sense only for existing LNG import terminals, and wouldn't justify new import terminal constrtuction.
MOSCOW, Nov 26 (Reuters) - The world's top gas exporting nations will set up a formal organisation at a December summit in Moscow, a Russian official said on Wednesday, but denied the new body will seek to copy OPEC's production quotas.
The forum's country members include Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Nigeria, Trinidad and Tobago, UAE, Qatar, Russia, Venezuela, and two observer members -- Equatorial Guinea and Norway.
The idea of an OPEC-style gas group has sent a nervous tremor through the European Union and the United States, which have argued the market should set gas prices. Both have warned the cartel could pose a serious danger to global energy.
The counter argument [against an OPEC-style catel] is that such a group would be short on clout if it can't scare North America, where its gas isn't needed because of the discovery of vast new quantities of shale gas.
"Shale gas has been a stunning discovery for North America from an energy standpoint, and it's been a traumatic experience for the Russians," said Stephen Letwin, Houston-based executive vice-president of gas transportation and international for Enbridge Inc.
In fact, analyst Chris Theal estimates the top nine shale plays found so far have the potential to recover 262 trillion cubic feet of gas, enough to supply the continent for about a decade. And development has just started.
…North America is no longer [an LNG market] growth area…. [Red & bold emphasis added.]
Webmaster's Comments: It's plainly stated: There's so much available domestic North American natural gas that foreign sources of LNG are insignificant in the US energy marketplace.
25 Nov 2008
Federal energy regulators plan Dec. 4 visit to border community
Webmaster's Comments: It makes no difference who the financial backers are or who locally supports Calais LNG. A truer measure is that the Calais LNG project violates world LNG industry standards, and just like Quoddy Bay LNG and Downeast LNG, is eminently unsuitable (see LNG Terminal Siting Standards Organization and SIGTTO).
An ill-conceived project no matter how much money is thrown at it or what local government supports it remains ill-conceived.
"This is an exciting time for Kitimat LNG," said Ilene Schmaltz, Vice President, Supply Marketing, Kitimat LNG. "Numerous energy companies and potential partners have contacted us regarding opportunities for terminal capacity since we announced our decision to pursue an export terminal in mid-September. Their interest has justified taking this next step to move our project forward."
Rising natural gas demand in Asia and recent increases in supply in North America - including in the U.S., Canada's traditional export market - have led to significantly higher natural gas prices in Asia than North America. These market and pricing conditions provide a compelling opportunity for companies looking to export LNG from North America to Asia. [Red emphasis added.]
Webmaster's Comments: The move is on, with six announced projects to export LNG from North AmericaI to where it's actually needed.
Calais LNG and Downeast LNG are in a futile struggle against the economic and logical current.
Unconventional natural gas resources could account for 69% of US lower 48 production by 2020, up from 48% last year, according to a new report by consulting group ICF International. [Red emphasis added.] (Nov 26)
LONDON, Nov 25 (Reuters) - Oil and gas companies are racing to develop a new type of vessel they hope will revolutionise offshore gas production but even if the untested technology works, its deployment could be blocked by resource holders who fear it will undermine development goals.
Webmaster's Comments: Its a disturbing paradox that world LNG liquefaction participants advocate moving communities away from their facilities to avoid risking civilian lives, but FERC ignores the world LNG industry's advice to keep LNG terminals and transit routes away from civilian populations (see LNG Terminal Siting Standards Organization and SIGTTO).
24 Nov 2008
The project is an LNG import and storage terminal proposed for construction in the town of Calais in Washington County, Maine. The LNG vessel transit route would enter the Bay of Fundy from the Atlantic Ocean, then enter Passamaquoddy Bay, and continue north into the Saint Croix River and to the terminal site.
Webmaster's Comments: Even the LNG industry recommends against Calais LNG's and Downeast LNG's site selections as being unsafe the same as defunct Quoddy Bay LNG. (See LNG Terminal Siting Standards Organization, and SIGTTO.)
Plus, as reported in multiple articles below, there's little US market for LNG.
FERC announced Friday that it plans to prepare an Environmental Assessment (EA) for the LNG re-export project proposed by Sabine Pass LNG. FERC's announcement is available in its eLibrary under Docket No. CP04-47.
Webmaster's Comments: Sabine Pass LNG import terminal can't find a domestic customer for its gas. LNG can't compete.
[T]he Northwest and the United States as a whole have little demand for LNG importswhich are sold in a global market at consistently higher prices than domestic gas according to the Oregon Department of Energy.
Early 2008 predictions of increasing gas prices and dwindling domestic supplies were proven false in July 2008, when Navigant Consulting and the Clean Skies Foundation announced new technology to access natural gas in tight sands, coal beds and shale.
LNG vs. domestic natural gas
Domestic natural gas definitely wins on price, with recent LNG prices in the international Pacific market around $20 per MMBtu, while the Energy Information Agency shows domestic gas prices declining from around $13 per MMBtu in June 2008 to near $6 per MMBtu in October.
LNG beyond the Northwest
According to the Oregon Department of Energy’s LNG and natural gas review, the global price of oil would need to stay below $60 per barrelwell below OPEC’s target barrel price of $70 to $90 per barrelfor the price of Pacific Basin LNG to approach the price of North American natural gas. [Red & bold emphasis added.]
"We are now in a position of significant potential oversupply brought about by the huge success experienced in the development of shale gas plays," Snyder said in a newly released presentation from a Houston energy conference last week. [Red & bold emphasis added.]
US natural gas production from shale plays could double in the next 10 years and provide 25% of the nation's gas needs by the end of that period, the Natural Gas Supply Association, a producer group, said on Friday.
Webmaster's Comments: Shale gas moots LNG.
If the assumptions regarding the availability of other energy sources "don't bear out," then the country will have to rely on natural gas generation "to fill in that hole in our climate change program. That is really going to be true across the board," [Federal Energy Regulatory Commission Chairman Joseph Kelliher said on Friday]. (Nov 22)
Webmaster's Comments: Contrary to the article's headline, the article reports that FERC Chairman Kelliher assumes natural gas will not be needed to keep US climate change emissions under control.
An analysis released by Waterborne Energy hypothesizes that increased LNG imports to the United States, triggered by tight credit markets that are reducing global demand, may increase U.S. gas supplies and create a downward pressure on U.S. natural gas prices in 2009.
Webmaster's Comments: Waterborne Energy is making assumptions that don't seem credible. If a tight credit market reduces LNG demand overseas, then why wouldn't a tight credit market reduce demand in the US? Something that has already happened. In addition, it's unlikely the US would pay for more expensive LNG when so much less-expensive domestic shale gas is available over 100-years' worth, according to industry players.
The oil and gas giant's Shell India subsidiary is having trouble selling a cargo of LNG. According to Platt's, Shell's storage facility in India is full and there are no takers for a cargo that has been on-board a ship for more than 30 days. To add fuel to the fire, one of the company's big bets in Alaska has so far been nothing more than a bust.
The culprit is fuel-switching. LNG is being offered for about $18/million BTUs, more than twice the price of naphtha (think Sterno), which is currently selling for about $8/million BTUs. Even natural gas liquids (NGLs) are selling for about $10/million BTUs. Shell has been counting on the inability of customers to switch to lower cost fuels. Shell was wrong.
LNG suppliers could be in trouble all over the globe soon. As natural gas prices fall, and supplies increase, LNG just can't compete. The situation bears watching. [Red & bold emphasis added.]
21 Nov 2008
"We're preparing for the scoping session which will be December 4 at the Washington County Community College. The meeting will be run by FERC for the people in Calais and the region to come and talk about the project. The Calais LNG team will be there to answer questions if that is something FERC decides they would like us to do," Emery explained.
Emery said FERC will conduct a site visit at 10 a.m. the same day. "That is something that FERC is organizing and [they're] making that available for the public -- to take a look at the site and the pipeline route." Public notices will be placed in local newspapers. More information is also available on the FERC web site at http://www.ferc.gov. The Calais LNG Project Docket Number is PF08-24-000.
Webmaster's Comments: Although they can't be faulted for wanting economic improvement for their community, Calais City Council can be faulted for endorsing a project that…
- Violates LNG industry standards (LNG Terminal Siting Standards Organization, SIGTTO);
- Unnecessarily puts civilian lives at risk ("Living in the Hazard Zones," Oregon LNG CEO's opinion);
- Makes no comprehensive economic sense (Goldman Sachs, Sempra Energy CFO's opinion, "Whole Bay Study," "Natural Gas Industry & Market Participants Report" );
- Is prohibited by a sovereign government whose permission is required (Canada's resolve to prohibit LNG passage into Passamaquoddy Bay);
- Is headed by an ethically-conflicted state legislator, Ian Emery;
- Is destructive to international, community, family, and personal relationships;
- Has no chance of success.
Calais City Council is creating false hope for a bad idea that has no future.
Jordan Cove and Pacific Connector came up with the survey idea in August, Braddock said. Moore Information had people make calls on Oct. 21-22, contacting an equal number of people in each county. The phone numbers were from a purchased voter list and numbers randomly selected. [Red emphasis added.]
Webmaster's Comments: A margin of error of 5% or lower is considered to be statistically acceptable; however, calling it "potential margin of error" raises a serious question about the survey results. "Potential margin of error" is like saying, "I'm a potential billionaire" it's statistically meaningless.
Webmaster's Comments: This news article's presentation of data creates a lack of confidence in the survey results. The preceding article provides answers to some questions that arise from reading this article such as the margin of error and how the survey respondents were selected.
20 Nov 2008
Reuters (carried via LexisNexis [subscription required]) reports that of the two cargos reportedly destined for the Lake Charles LNG terminal, only one cargo was delivered. The second LNG ship, the Golar Freeze, is now in the Atlantic Ocean heading for southern Europe. [Red emphasis added.]
[Port Commissioner Floyd Holcom] said he's worried about the LNG delivery tankers a required part of the proposed LNG facility on the Skipanon Peninsula also protruding into protected airspace. But the FAA didn't study those potential obstructions, he said.
John Overholser, the Port's new airport manager, said the FAA study was "very limited in scope" and didn't detail the security restrictions surrounding other LNG facilities, such as a permanent "no loitering" rule for planes flying overhead. [Red emphasis added.] (Nov 19)
FERC's Ed Murrell spoke about the history of interchangeability issues in the United States, focusing on FERC's role, and emphasized the importance of stakeholders in the interchangeability debate reaching settlement on disputed issues as opposed to submitting matters to FERC for a decision.
Webmaster's Comments: The discussion above demonstrates that LNG import terminals must expect LNG to have fluctuating contents. Quoddy Bay LNG kept stalling their project, giving the excuse that they couldn't determine whether or not they'd be receiving LNG of varying content, so they couldn't determine the final design of their project.
The above article substantiates that Don Smith and Brian Smith of Quoddy Bay LNG simply didn't know what they were doing. It also demonstrates that Maine's Governor John Baldacci endorsed eminently inept developers when he, Jim Mitchell, and Fred Moore invited Quoddy Bay LNG to Sipayik and Passamaquoddy Bay.
PBS Airtime: Friday, November 21, 2008, at 9:00 p.m. EST on PBS
This week, Bill Moyers Journal and Exposé: America's Investigative Reports present an investigative story on tragic accidents resulting from natural gas explosions. The report is part of Blueprint America, a PBS-wide series on the nation's infrastructure.
Deliveries of liquefied natural gas (LNG) imports remain below 1 Bcf per day.
LNG imports appear to be on course to set a new 5-year low in 2008. For October, estimated deliveries averaged about 0.9 Bcf per day, which is 43 percent of the average of 2.1 Bcf for 2007. Few LNG cargos have been arriving to the United States under short-term authorizations from the Department of Energy’s Office of Fossil Energy. [Red emphasis added.]
The audacity of such a raid surprised many observers, and security specialists are worried that pirates may one day raid or sell to terrorists a tanker holding pressurized liquefied natural gas, or LNG. Candyce Kelshall, a specialist in maritime energy security at Blue Water Defence, said, “An LNG tanker going up is like 50 Hiroshimas.” [Red bold emphasis added.]
Webmaster's Comments: Save Passamaquoddy Bay balks at using hyperbole such as used by Blue Water Defence's Candyce Kelshall; the energy contained in an LNG ship's cargo might equal that of 50 Hiroshima bombs, but despite the significant catastrophe that would likely ensue it wouldn't burn as rapidly, cover as large an area, or have the long-term health consequences as Hiroshima bombs.
However, energy-security participant Blue Water Defense Kelshall and Oregon LNG CEO Peter Hansen have both made the Hiroshima-LNG ship disaster comparison. (See Oregon LNG CEO Hansen's quote.) We're not talking about anti-LNG participants, here. These statements by industry players are noteworthy.
We do agree that US federal regulators are underplaying the significance of LNG disasters from ship transits and terminals. (Note: The world LNG industry also warns against siting LNG facilities and transit routes where vapors from an LNG release could affect civilians see LNG Terminal Siting Standards Organization and SIGTTO).
The US Federal Energy Regulatory Commission (FERC) ignores the LNG industry's own warnings about endangering the public, unnecessarily placing civilian lives at risk including civilian lives near Downeast LNG, Calais LNG, and the now-defunct Quoddy LNG, and along the ship transit route through Canadian and US waters to each of these proposed terminals. (See our webpage, Living in the Hazard Zones.)
19 Nov 2008
Even with the withdrawals from the BEP permitting process by Quoddy Bay LNG and Downeast LNG, I have to wonder why nobody is raising the most obvious question what exactly is Maine’s energy policy for LNG? [Red emphasis added.] (Nov 13)
A Cultural Survival website article from 2004 is provided, entitled, "Passamaquoddy Group Demands Delay of Liquified Natural Gas Terminal Construction and More Information Second African Indigenous." (Nov 13)
In the letter, sent from the service's Portland office, Fish and Wildlife Service Oregon Supervisor Paul Henson calls into question the way Palomar is proceeding through the federal environmental review process. (Nov 18)
One common complaint is that FERC gave project developer NorthernStar Natural Gas Inc. a conditional approval without completing the necessary environmental reviews. Several state agencies and the top federal fisheries agency are required to sign off on the project under the Clean Air, Clean Water, Coastal Zone Management and Endangered Species acts.
By issuing the tolling order, FERC gave itself unlimited time to rule on the requests. [Red & bold emphasis added.] (Nov 18)
Fearing litigation, NorthernStar asks regulators to slow down
NorthernStar Natural Gas Inc. has asked federal energy regulators to delay their response to legal challenges filed after the September approval of the company's Bradwood Landing liquefied natural gas project.
But the challengers quickly answered NorthernStar's request with filings telling FERC the damage has already been done. The state and federal reviews were supposed to be complete before FERC's approval so they could be included in the decision-making process, they said. (Nov 18)
A spokesperson for Bradwood Landing LNG said in a statement that the company is "pleased" with FERC's decision to grant a rehearing request for further consideration, noting that the decision "does not delay the project in any way."
Webmaster's Comments: Anyone who has followed any of the US LNG terminal applications knows that LNG developers announce to the public they are "pleased" at every event even when what has happened is against their project's interests.
"It's much too complex, much too verbose. It leaves out a lot of key elements like the need for the LNG project, a meaningful analysis of alternative ways to meet that need and that fact makes commenting all the more difficult," said Sadler.
Sadler, who has flagged this two volume document with what he calls "procedural defects," says it's just as important to be aware of these issues whether you're for or against the LNG terminal. (Nov 18)
But Oregon LNG is going to be responsible for meeting a number of demands to ensure aircraft safety. One of the demands is the company must pay for the airport to install a costly new radio navigation system.
Local pilots and air service companies, including Arctic Air Service, which owns the helicopter used by the Columbia River Bar Pilots, have expressed concerns about how the tanks would complicate air navigation - especially in bad weather.
Pilots have said they fear their flights could get shut down because of security risks associated with LNG facilities. Several residents and LNG opponents say the airport would be tempting fate by allowing the tanks inside protected airspace. (Nov 17)
A study produced by ICF International for Jordan Cove LNG concludes that based on expected increases in LNG liquefaction capacity and competing import demand projections for the Pacific Basin, the market can support an LNG terminal on the West Coast of the United States.
Webmaster's Comments: …except the study ignores the prolific domestic resource of methane hydrate in Alaska and shale gas in the US and western Canada. A lot of others in the natural gas industry are saying there's no need for an additional LNG terminal.
Webmaster's Comments: Importing will be at the Mexican LNG terminal that is to provide natural gas to Mexico and southern California.
Shell's liquefied natural-gas shipments from Qatar may be disrupted by the increased risk of offshore attacks, according to Deloitte's energy analyst Cyril Widdershoven. "This attack was the biggest thing that could happen and if they can pull this off, they can also hijack an LNG tanker.'' [Red emphasis added.] (Nov 18)
17 Nov 2008
Webmaster's Comments: Girdis wants the public to believe FERC's warning was good news. In truth and similar to what FERC did with Quoddy Bay LNG FERC announced being close to pulling the plug on Downeast LNG's dead-end federal application.
[This article is not available online.]
Downeast LNG president Dean Girdis: "I don't believe there is any legal basis for Canada to stop the [LNG] transit.
"Ted [McDorman], a professor at the University of British Columbia, is an expert on this subject and that is what he is advising us. The United States never recognized Canada's claim on an internal waterway. We're comfortable with that position."
[Girdis] says the Robbinston site should not be viewed differently than the Port of Bayside in Canada where large ships dock. (Nov 6)
Webmaster's Comments: The same Maritime law expert touted by Dean Girdis, Ted McDorman, also stated at the 2007 May 11 panel discussion, "(Not So) Innocent Passage: International Law and the Passamaquoddy Bay LNG Terminal Controversy", hosted by the University of New Brunswick and the Canadian Council for International Law, that Canada is under no obligation to honor any "innocent passage" rights under the United Nations Convention on the Law of the Sea (UNCLOS) to ships transiting through Canadian waters to US ports, since the US is not a party to that treaty. And, since it, too, is an UNCLOS-defined issue, the "internal waterway" matter doesn't apply to ships transiting through Canadian waters to US ports.
More importantly, Dean Girdis continues to ignore the LNG industry terminal siting standards that indicate Passamaquoddy Bay as entirely inappropriate for locating LNG facilities. (See LNG Terminal Siting Standards Organization and SIGTTO.)
The reality is that Dean Girdis is promoting a project that violates the LNG industry's own safe terminal siting standards. Dean Girdis can blow all the smoke he wants; Downeast LNG has always been a lost cause.
"At this particular time we feel that there are more pressing issues that we need to address from a national perspective at this particular time," he said. "For instance, the first thing is completing our national energy policy. The next thing is to address our renewable and alternative energy options that are available to us at BEC. We think that those right now could bring more fruit to our energy issues to The Bahamas."
Alaska's North Slope holds an estimated 85.4 Tcf of undiscovered, technically recoverable natural gas in the form of methane hydrates -- enough to heat 100 million homes for a decade, the Interior Department and US Geological Survey said in a report released Wednesday morning. (Nov 12)
Webmaster's Comments: Enough methane hydrates-source natural gas to heat 100 million homes for a decade! That's another significant nail in the LNG import coffin.
In a procedural ruling, the Federal Energy Regulatory Commission stopped its regulatory clock on the terminal, granting itself additional time to examine numerous requests to rehear and withdraw the conditional approval it granted the project in September.
The requests came from a broad group of constituents, including the chief federal fisheries agency, state natural resource agencies in Oregon and Washington, politicians, tribal groups and environmentalists. The common denominator in those requests was the assertion that FERC broke the law by approving the project in the absence of analysis about Bradwood's impact on endangered species by the National Marine Fisheries Service and state permits under the Clean Air, Clean Water and Coastal Zone Management acts. [Red & bold emphasis added.]
Webmaster's Comments: FERC's feet are being held to the regulatory fire indicating that states can hold the trump cards regarding LNG terminal siting. The idea FERC wants the world to believe that FERC is the ultimate decider regarding LNG terminal construction may be going up in smoke.
With the exception of a brief winter spike, US natural gas prices will have to tank in 2009 to rebalance a glutted market, investment bank Raymond James' energy analyst Marshall Adkins said Monday. [Red & bold emphasis added.] (Nov 10)
Webmaster's Comments: Here's another mention of the glutted natural gas marketplace, and why importing LNG makes no economic sense.
It noted that the size of the recoverable resource base "is large enough to support higher levels of annual production over the long term if such production is demanded by the market." [Red emphasis added.]
Webmaster's Comments: This supports other industry reports that indicate domestic natural gas supplies are sufficient to fulfill domestic demand. There's no need for additional LNG import infrastructure.
14 Nov 2008
[Quoddy Bay LNG counsel Jeff Thaler] said the world and domestic markets had changed in the last six months. Quoddy Bay is not able to proceed with a guaranteed supply of fuel or other factors of the project that would be necessary to finance and develop the $2 billion project.
The Massachusetts Attorney General’s office responded yesterday to a November 4 filing by Weaver's Cove LNG on the issue of whether the decision by the U.S. Secretary of Commerce to sustain Massachusetts' objection to the project's consistency with the state's Coastal Zone Management Plan should prevent FERC from issuing further approvals for the proposed Weaver's Cove LNG project.
Two gas supply contracts between suppliers Gas Natural and Gas de Eskadi and Everett LNG terminal owner GDF Suez are set to expire next spring, which would end one of the two long-term LNG flows into the United States. World Gas Intelligence [subscription required] reports that a source close to Gas Natural said that due to the relatively low price of natural gas in the United States, Gas Natural is unlikely to renew the long-term contract. However, a spokesperson for GDF Suez noted that the company has access to a number of other supply sources around the world due to the recent merger between Gaz de France and Suez. [Red emphasis added.]
Webmaster's Comments: The reason natural gas is priced so low, compared to elsewhere in the world, is because of the prolific supplies of US domestic natural gas the very reason why the proposed LNG terminals in Passamaquoddy Bay have no economic future.
Federal law now requires ships 65 feet or longer to slow to 10 knots within 20 nautical miles of ports on the East Coast. Right whales can evade ships traveling that slowly. To further prevent ship strikes, Cornell and the Woods Hole (Mass.) Oceanographic Institute installed 16 auto-detection buoys in the Stellwagen Bank National Marine Sanctuary, a 638-square-nautical mile area off the Massachusetts coast. It is crisscrossed with shipping lanes. An offshore liquefied natural gas (LNG) terminal is there.
The gas producers, for their part, have dismissed as unwarranted interference in the gas market any question of enforcing gas supply contracts. The producers have said that the existence or absence of contractual agreements for the supply of gas to utilities relates to private commercial dealings, and not to the question of whether there is enough gas to supply the local market.
Chugach is facing a crisis in obtaining future gas supplies to drive the gas-fired power plants that generate its electricity Chugach’s current gas supply contracts date back to the 1980s and all of the contracts will terminate by 2011, attorney Eric Redman and Suzanne Gibson, Chugach vice president of corporate planning and regulatory affairs, told the RCA commissioners in a February 2008 update on Chugach’s fuel supply situation.
“So we have no gas at all beyond those dates,” Redman told the RCA commissioners. [Red emphasis added.] (Week of Nov 16)
Webmaster's Comments: In other words, as exemplified by the US Department of Energy's decision in this matter, natural gas industry regulation isn't about the public's best interests, at all. It's really all about the marketplace and maximizing corporate profits, regardless of public interests.
Webmaster's Comments: The current price for LNG-source natural gas in Asia is considerably higher than in the US (see the next story, "Indonesia, Japan agree on LNG price"), seriously questioning the credibility of claims in the "LNG stalls but will accelerate" article, below.
Webmaster's Comments: Indonesia and Japan are paying 285% more for natural gas locking in the price formula for 10 years than the price for domestic US natural gas. Exactly how does that make the US a competitive customer for foreign LNG?
"The high, albeit volatile, level of U.S. natural gas prices makes shale and other domestic unconventional gas supplies economic. The development of these unconventional supplies will enable the U.S. to meet demand as LNG goes to other markets."
"The simple truth is that LNG is now often competitive with domestic production -- a fact that was not true a decade ago, and hence North America will be able to attract supplies once near-term supply bottlenecks are relieved," says Schlesinger. [Red emphasis added.] (Nov 12)
Webmaster's Comments: It's unclear how the more-expensive LNG-source natural gas is supposed to compete against the vast existing supplies of less-expensive domestic natural gas especially when the domestic supply will last over 100 years at today's consumption rate. To overwhelm the domestic supply within the next ten years, or so, would require increasing domestic demand by ten fold in the same amount of time a consumption rate that lacks credibility.
The analysis in the above article seems to indicate that the US will import significantly more volumes of LNG within a few years than is presently being imported, simply "because the industry says so." Wishful thinking and goldrush mentality is what turned the US LNG market upside down and got the domestic LNG import industry into the financial problem it's currently in. That same kind of thinking certainly won't get them out of it.
10 Nov 2008
Webmaster's Comments: It's alarming to know that Trinidad & Tobago, a country with significant LNG liquefaction output and the major LNG supplier to the US has no burn treatment center.
"Japan, Korea, and China, the typical Asian countries that have been taking LNG, are not taking as much. So it's creating a surplus and it's got to find a home," Mark Snell, chief financial officer of Sempra, told Reuters.
Webmaster's Comments: Sempra's CFO seems to think that if there's LNG available, someone has to buy it.
For LNG to become attractive to US customers, there would need to be a shortage of domestic natural gas (that's not the case), and LNG-source natural gas would have to be price-competitive with domestic gas (that's also not the case). Then, since there are already around 100% more US LNG import terminals permitted than are needed, there'd be no justification to construct even more terminals; the existing permitted facilities would more than suffice.
Our biggest problem with natural gas is that we are gradually running out of North American reserves and so must increasingly rely on supplies from elsewhere -- in this case, in the form of liquefied natural gas, or LNG. Fully 45% of the world's remaining reserves are, however, held by just three countries, Russia, Iran, and Qatar, while large amounts are also held by Algeria, Iraq, Kazakhstan, Saudi Arabia, Turkmenistan, and Venezuela. This means, of course, that we face the same geopolitical problems relying on natural gas as we do with oil.
Webmaster's Comments: The article's author, Michael T. Klare, apparently doesn't read the energy news he writes about. Expanding the US LNG infrastructure has been mooted by over 100-year's worth of domestic shale gas in over 20 vast US gas fields (plus some in Canada). In fact, current import capacity is hardly being used, and there are now at least six new North American LNG export projects in the works, wanting to sell North American natural gas to Asia.
9 Nov 2008
NN [Nulankeyutomonen Nkihtahkomikumon] is encouraged by the Bureau of Environmental Protection’s (BEP) unanimous decision to allow Donald Smith to concede its BEP permitting application (11/06/08). The remaining LNG proposals for Passamaquoddy Bay are no different, each are equally untenable.
Even as Downeast LNG had earlier proclaimed that Canada was cooperating with its effort, the developer is today (11/08/08) quoted as being offended by Canada’s decision to disallow tankers from transiting Passamaquoddy Bay.
[This same story was published in the Fredericton Daily Gleaner under the title, "New Brunswick position on LNG is hypocritical, says U.S. official."]
Dean Girdis, president of Downeast LNG, said the province is unfairly talking big about its plans for a so-called energy hub in Saint John, all while vehemently opposing proposed LNG projects in Maine.
Webmaster's Comments: The hypocrisy rests solidly in Dean Girdis's lap.
Girdis is suffering from his own inept site selection a site that even the world LNG industry advises against, as published by the Society of International Gas Tanker and Terminal Operators (SIGTTO) in "Site Selection and Design for LNG Ports and Jetties." Comparing Passamaquoddy Bay to those SIGTTO standards discloses tens of reasons why Passamaquoddy Bay is inappropriate for LNG transit and facilities. (See LNG Terminal Siting Standards Organization for an abbreviated list of SIGTTO's standards.)
Early on in Downeast LNG's history, Girdis disclosed in the Bangor Daily News that he wasn't even aware that his site selection violated LNG industry standards. Girdis simply hadn't done his homework, and he's now paying the price.
Rather than New Brunswick and Canada opposing LNG in Maine, they are rightly opposing LNG projects in Passamaquoddy Bay. Violation of LNG industry standards is reason enough for Canada to ban LNG in Passamaquoddy Bay.
Professionally embarrassed, and feeling the heat from his venture-capital investors and just as he publicly blamed the State of Maine for his project's lack of progress Girdis is now attempting to attach fault to New Brunswick for his own inept, very expensive, boondoggle. The hypocrisy and failure belong to Dean Girdis, alone.
He made reference to the oil rich republic's export of energy products, including liquefied natural gas (LNG) to the United States, saying "Trinidad and Tobago occupies a very strategic position vis-a-vis the US".
"We also export a significant amount of iron and steel to the US market. But we want certain guaranteed access arrangements in respect of all these commodities as well as for plastics and aluminium," he noted.
Manning again interjected to say TT’s reserve-to-production ratio has in fact improved from “12” some two years ago to a current “13”. He added: “Since the Ryder Scott Report was published, we have two gas discoveries.” He also said that TT has now diversified its LNG export markets to now include Japan, Brazil, Argentina and Mexico, in addition to the usual USA.
Webmaster's Comments: Trinidad & Tobago's natural gas reserves are just 1213 years' worth, and they've expanded their markets beyond the US to include Japan, Brazil, Argentina, and Mexico. In other words, there's less Trinidad & Tobago LNG to import to the US.
[This commentary is by Walter J. Hickel, who served as governor of Alaska from 19661968 and from 19901994. He was U.S. Secretary of the Interior from 19691970, and his most recent book is "Crisis in the Commons: the Alaska Solution."]
Alaska's second largest trading partner, China, can also become an ally in the global economic recovery. Instead of shipping our jobs to China, let's ship them our goods made in the USA and our resources. For instance, if Alaska is encouraged by the Obama administration and Congress to export Alaska liquefied natural gas (LNG) to Asian markets, we can make a dramatic dent in the US-China trade deficit.
The Chugach request for a court review is the latest evidence of rising local energy tensions in Southcentral Alaska, where natural gas is a critical commodity for heating and powering homes and businesses.
7 Nov 2008
Passamaquoddy group’s BIA lawsuit continues
Although the Federal Energy Regulatory Commission has dismissed Quoddy Bay LLC’s applications to build a liquefied natural gas terminal on shoreline land owned by the Passamaquoddy Tribe, a related lawsuit against the BIA over the proposed project’s land lease continues.
Webmaster's Comments: The glut of domestic natural gas results in its low price and is the reason the US natural gas industry is now switching to exporting LNG, rather than importing.
5 Nov 2008
Webmaster's Comments: Canaport's Phillip Ribbeck is speaking out of both sides of his mouth. First, he says that Canaport may need to expand even further in order to supply future natural gas needs, but then he says there's "an abundant supply of natural gas in North America" contradicting the need to expand or to import. Because there is so much available domestic natural gas, some industry insiders doubt that Canaport LNG can succeed in exporting to the US.
In the next few years, North America won't be importing much LNG, at all.
On March 29, during a post-Cabinet news conference, [Energy Minister Dr. Lenny Saith] said that a new LNG Train for 2009 was "not possible at this point time" since "we haven't got the gas for it." [Red emphasis added.]
Webmaster's Comments: Trinidad & Tobago's natural gas reserves will, according to the study referenced in the article, last only about 12 years.
If a prospective LNG terminal at Bradwood were really essential to the well being of this state or region, there might be a reason to have a serious discussion about the price of trashing salmon habaitat. But no one really needs this LNG terminal, except the developers who intend to get rich by building it then flipping it to a larger company. This LNG project is a blue chip in the game of poker that big Texas energy interests will reliably play. We saw it with Enron.
To place an industrial plant such as an LNG terminal next to waters that are vital salmon habitat is not smart. If we were to acquiesce to the NorthernStar proposal, it would only demonstrate that we've learned nothing in the past 20 years. [Red emphasis added.] (Nov 4)
When Braddock first arrived in Oregon, he had some compelling arguments behind a proposal to build storage enough to hold 6.4 billion cubic feet of gas and a 223-mile pipeline to pump the gas over the Coast Range and into California.
In other words, all of a sudden there’s plenty of gas in the country; so much that those who extract it are starting to back away from shale drilling, because an oversupply is driving prices dangerously close to the cost of pulling it out of the ground. [Red & bold emphasis added.] (Nov 2)
The Ventura County project did not go forward mostly because its sponsors could not prove any need for LNG in California. But if the poll finding is accurate, most Californians are so rattled by high prices for gasoline they are willing to let energy companies do almost anything, so long as those companies claim it will somehow add to fuel supplies.
But what if voters were to learn those supplies are unreliable? And at least half of the supply scheduled to come to the only LNG plant now prepared to supply California turns out to be precisely that completely unreliable.
Oops. The Sempra contract with Tangguh gives that outfit the right to "divert a portion of the cargoes to another market so long as they continue to pay our costs as described in the contract," says Sempra spokesman Art Larson.
4 Nov 2008
A proposed $1.5-billion liquefied natural gas (LNG) terminal for Grassy Point, Newfoundland, is still a go to start in 2009 despite global market uncertainty, a spokesperson for the project says, according to a report in the St. John's-based Telegram.
While a similar project in Maine, U.S., has come up against financial hurdles, the Grassy Point terminal differs from its American counterpart in several aspects, the spokesperson said. These include its being a storage facility, not a pipeline, whose customers will handle their own shipping. [Red emphasis added.] (Nov 3)
Webmaster's Comments: The projects in the Maine side of Passamaquoddy Bay are having regulatory hurdles in addition to a complete reversal in the US natural gas market. The Newfoundland LNG project can also expect an absence of US customers for its stored LNG.
United States Embassy officials have a "strong expectation" that their country's "positive" bilateral relations with Trinidad and Tobago will continue no matter which candidate becomes their next president today.
Several Oregon winemakers have declared war on two proposed natural gas pipelines through the Willamette Valley that would uproot vineyards, including one being planted by famed Pinot Noir producer Ken Wright.
Natural Gas Week [subscription required] offers an analysis of whether four new regasification terminals scheduled to come online in North America during 2009 will attract overseas supplies or will sit idle like many existing LNG facilities.
A commodities analyst with Merrill Lynch predicts that as much as 300 Mcf/d in additional LNG imports will come to the United States in 2009 as demand falls in overseas markets, according to Platts LNG Daily [subscription required].
Webmaster's Comments: Reasonable questions to ask the Merrill Lynch analyst are:
- Even if more LNG becomes available and prices become lower, how could LNG price-compete with over 100-years' worth of domestic natural gas resources?
- Why should the US rely on foreign LNG sources when the US could be natural gas-independent by using its abundant domestic natural gas?
3 Nov 2008
The PAD [pre-application document] you filed October 17, 2008 contains very little actual content but instead references reports or websites where environmental data may be found. This is not adequate. The PAD also continues to mention the potential mixing of both a permanent tidal barrage dam which would not qualify for a pilot project license, and some type of hydrokinetic technology. Therefore, please consult our regulations, which may be found at 18 CFR 5.61, for a specific description of the type of information the PAD must contain, and, when you are ready, file an NOI [notice of intent] and PAD for a definitive project that conforms to the regulations. If the PAD is in conformance with the regulations, we will initiate an ILP for the project you are proposing. If not, the PAD may be rejected and your preliminary permit may be terminated. [Red emphasis added.]
Webmaster's Comments: The above item regarding a tidal dam and hydrokinetic tidal power is included here since Normand Laberge's Tidewater Associates/Tidewalker Associates has also expressed interest in building local LNG facilities.
Officials from the Department of Environment ordered the company on Wednesday to act after the high levels of sediment were found in what residents call Walter Creek. Residents are worried the sediment has destroyed the fish-bearing waterway.
The company that first proposed a liquid natural gas processing terminal in January 2006 on a 60.5-acre man-made island south of [Long Beach, New York] says it still is hard at work on the permitting process and hopes to hold the first series of public meetings on the project before year-end on Long Island and in New Jersey.
Trinidad and Tobago must make the shift, being a country that earns most of liquefied natural gas (LNG) revenues from taxes, to one that actually has more control in the industry, says Energy Minister Conrad Enill. (Nov 2)
The pipeline will cross lands belonging to the Lubicon Lake Indian Nation, a small aboriginal community that has fought for decades to have its ancestral lands in the boreal woodlands of northern Alberta recognized and protected. Throughout that time, the Lubicon have seen their traditional way of life eroded as their lands have been leased out to oil and gas companies at a breathtaking pace. They’ve seen more than 2,000 oil and gas well sites, 32,000 kilometres of seismic lines, and more than 2,000 kilometres of roads pushed through their forests. The Alberta government approves on average 100 new oil and gas installations in Lubicon territory each year. [Red & bold emphasis added.] (Oct 29)
TORONTO The news that the Alberta Utilities Commission had approved a 186-mile gas pipeline across the unceded territory of a beleaguered Cree nation was not unexpected, but it still was hard to take.
It is, generally accepted that the Lubicons never ceded their land, having by an oversight been left out of Treaty 8 in 1899. But Canada has been content to let negotiations lapse since 2003 and Alberta treats Lubicon land as Crown land, leasing it to oil and gas and lumber companies. The Friends of the Lubicon Alberta group estimates that $13 billion in resources have been extracted from the territory since 1979, with not a penny of it going to the Lubicons.
Contaminated lakes, rivers and drinking water (even the snow in winter is too polluted to melt and drink, as was once the practice) and depleted wildlife have ended their subsistence lifestyle, throwing them onto welfare. [Red & bold emphasis added.] (Oct 20)
Webmaster's Comments: Canada's abuse of First Nations is as disgraceful as that of the US.
Juvenile chinook salmon swimming down the Columbia River often turn a corner at Clifton Channel, about 20 miles upriver from Astoria, and enter the marshy backwaters that meander through a cluster of islands between Bradwood Landing and Svensen.
Natural gas production is increasing at a rate not seen since the 1950s part of the reason why prices have fallen by more than half since July. The trend is a huge reversal from just a few years ago. [Red & bold emphasis added.] (Nov 2)
[C]an a cartel influence the price of gas? Iran has the world’s second largest gas reserves but is a relatively minor exporter, selling primarily to Turkey. Qatar deals mostly in LNG, the price of which is not linked to pipeline supplied gas. If Qatar were to limit sales to prop up prices, its customers would soon turn to Algeria, Nigeria, and other major LNG producers, Korchemkin wrote in Vedomosti on October 21.
1 Nov 2008
One liquefied natural gas import terminal developer in Maine is continuing the process of putting its proposal on ice, while another is pursuing an open season for its project at the urging of an increasingly impatient US Federal Energy Regulatory Commission.
Developers of the 2-Bcf/d Quoddy Bay LNG project near Perry, Maine, last week withdrew their applications from the state Board of Environmental Protection, following FERC's dismissal of the company's applications earlier this month.
"We note that in the alternative, Downeast may withdraw its application now and reapply at a later time without prejudice." [Red & bold emphasis added.] (Oct 28)
The company’s decision to pull its request for permits followed an Oct. 17 ruling by federal regulators that dismissed the company’s application. Its proposal calls for an LNG terminal at Pleasant Point on an inlet of the Bay of Fundy. [Red emphasis added.] (Nov 3)
A subsidiary of Cheniere LNG and operator of the Sabine Pass liquefied natural gas (LNG) terminal, Sabine Pass said it was requesting permission to re-export LNG due to increasing worldwide demand for LNG in European and Asian markets.
Webmaster's Comments: There is no US market for expensive, new supplies of LNG.
Four new LNG receiving terminals plan to start operations in North America next year, but their advent could exacerbate a glut of underutilized capacity in the region. Two of the new terminals -- Canaport and Neptune -- will be located in the North, while two more -- Cameron and Golden Pass -- will be located along the US Gulf Coast (NGW Jul... [Red & bold emphasis added.] (Nov 3)
Webmaster's Comments: New LNG import terminals are coming online, creating a glut in import capacity in the Northeast region invalidating Quoddy Bay LNG's Don Smith's claims that the Northeast will be unable to obtain sufficient supplies of natural gas in the future.
"It's bigger than the Barnett, Fayetteville, and Woodford shales combined," he said. [Red emphasis added.] (Oct 29)
Webmaster's Comments: The US has whoppingly-large natural gas reserves, negating the need to construct more LNG import terminals. Downeast LNG and Calais LNG are moot money pits, and Quoddy Bay LNG investors would be smart to accept their failure.
If we develop only some of the gas reserves in our Barnett and Haynesville Shales, the US will become the worlds # 1 producer of natural gas, kicking Russia into second place. Natural gas has propelled a lot of Moscows conspicuous new wealth and the US has even more reserves! [Red & bold emphasis added.] (Oct 30)
Webmaster's Comments: US LNG exports are the new investment rage. New LNG import projects are unneeded.