"For much of the state of Maine, the environment is the economy"
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27 Feb 2010
U.S. probe could boost exploration prospects in Maritimes
Companies developing shale gas deposits in Nova Scotia and New Brunswick have a big advantage being located close to the Maritimes and Northeast pipeline, which currently carries gas from offshore Nova Scotia to markets in the U.S. northeast, he said.
The battle to win the hearts and minds of New England residents went into overdrive last week as the proposed Weaver's Cove and Calais LNG terminals gained new and powerful union and legislative supporters.
Webmaster’s Comments: Maine legislators like Quoddy-area state representatives Dianne Tilton and David Burns have thrown in their support for Calais LNG and Downeast LNG, even though these projects…
Rep. Tilton and Rep. Burns would better serve their constituency by encouraging the LNG projects move outside of Passamaquoddy Bay to industry-compliant sites, where the projects would actually have a chance at success — if the politicians acutally believe there is a need for the projects.
- Violate LNG industry terminal siting best safe practices;
- Engulf thousands of Mainers against their wills within LNG ship federally-defined Hazard Zones;
- Have no probability of success, due to the US Coast Guard requirement that the developers obtain Canada's cooperation for safe & secure transits (independent of the innocent passage issue).
It seems that human beings, because of the vast combination of precocious attributes, memory, cognition strength, ability to create avenues of science and technology and create beauty and ugliness, we are frequently unable to predict or protect ourselves from the most egregious of disasters. Thus: black swans.
For the record, Steve Bobo made technical integrity inspections on every LNG tanker in service to the United States until about 1986. [Red, yellow & bold emphasis added.]
Norway, Holland and Kazakhstan have already obtained observer status. Azerbaijan, Turkmenistan, Uzbekistan are also the forum’s potential members. “The GECF doors are open for Australia and Canada as well as for other gas exporting countries,” Bokhanovsky said.
Webmaster’s Comments: Is this the actual beginning of an OPEC-like organization for natural gas?
26 Feb 2010
CALAIS — A biological assessment filed by Calais LNG with the Federal Energy Regulatory Commission (FERC) has concluded that increased vessel traffic from this proposed project is not likely to adversely affect North Atlantic right whales.
The lengthy report – a biological assessment on threatened and endangered marine mammals and sea turtles – was prepared for the company by Normandeau Associates Inc of Bedford, New Hampshire and submitted to FERC this week.
It concludes that [liquefied] natural gas transport vessels using the terminal [would] avoid travel through the areas most heavily utilized by right whales but also notes that low visibility, such as fog and night transit, in addition to the whales’ surface behaviour, limits the ability to see these whales.
The report also states that the overlap in frequency and source levels of vessel noise with right whale calls, vessel noise and presence of vessels may affect but are not likely to adversely affect the right whales. Similar reasons are listed in the report as to why it is felt the project [would] also not adversely affect humpback, fin, sei, blue, and sperm whales. Due to the relatively low prevalence of loggerhead and leatherback sea turtles within the transit route, the report notes that the vessels are also unlikely to adversely affect them either.
Webmaster’s Comments: Since right whale habitat studies have concentrated only in the open Bay of Fundy — not near Head Harbour Passage or in Grand Manan Channel — research is unlikely to reveal actual right whale activity in the unstudied areas, including the 40 right whales that frequented near the entrance to Head Harbour Passage last summer (2009). Such research and results are commonly referred to by the scientific community as "garbage in, garbage out"; the results are a reflection of the quality of the research.
As marine biologist Art MacKay, who has been mapping whale sighting data in the Quoddy area, stated last summer, Head Harbour Passage was "plugged with whales." (See Art's whale-sightings map at the top-left of his I Love Quoddy Wild website. Or go directly to a larger version of his Fundy Whales map on CommunityWalk.)
Danielle Dione's Quoddy Link Marine Sightings and Updates blog has video-recorded and still-photographed prolific whale (including right whale) activity in the proposed LNG transit area, the area that Calais LNG's "research" claims would be unaffected by LNG transits.
One of the world's largest producers of hydro power, Hydro-Quebec plans to concentrate first on expanding its exports to New England with a line through New Hampshire, according to Christian Brosseau, president of subsidiary HQ Energy Services US.
Any similar venture in Maine won't happen soon, Brosseau said. Hydro-Quebec must first complete its proposed purchase of New Brunswick Power, Maine must clarify its rules on siting energy corridors and private firms contemplating new corridors through Maine must make a business case that's compelling to Hydro-Quebec, Brosseau said.
He did have some advice, however, for how Maine and New England can lower electricity prices: Diversify a fuel mix that's too heavy on natural gas, and build enough transmission to handle more wind and hydro generation.
In Maine, lawmakers are preparing to consider recommendations from a special study panel that met last year to set up rules for how energy corridors from Canada could cross Maine. Those rules have been hotly debated, by generators who don't want their projects crowded out by Canadian power, and supporters of liquefied natural gas terminals, who are angered by Canadian opposition to tanker routes into Down East Maine. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Maine Jobs First (Or Else No Maine Jobs, At All), the self-destructive Calais LNG lobby, would rather Maine get no jobs and tax benefits from the proposed NB-ME Energy Corridor if the ill-sited, ill-timed, surplus Calais LNG and Downeast LNG proposals continue to be prevented by Canada from receiving LNG shipments. It appears that New Brunswick may be out of the picture, anyway. Quebec is already going around Maine to get to the Boston market. Holding up the NB-ME Energy Corridor will likely result in no jobs for either LNG or the energy corridor construction.
Hint to Maine Jobs First (or Else No Maine Jobs, At All): The solution to building LNG terminals in Washington County is simple:
- Move the LNG projects outside of Passamaquoddy Bay, since Canada would then not be involved.
So, why won't Calais LNG and Downeast LNG do it?
Answer: They know that since the projects are not needed, Calais LNG and Downeast LNG would not succeed, no matter where they are located; they may as well fall where they stand.
Already Canada's largest electricity provider, Hydro-Quebec is pushing into the Maritime provinces. It already has a controversial $3.2-billion deal that would see it supply electricity to New Brunswick as well as take over most of NB Power Corp.'s assets including transmission lines that carry power to Maine. (The deal was delayed for two months Friday by the New Brunswick government in order to allow a "full debate" on the controversial deal).
The fuel should be unloaded off-shore and piped in. [Red & yellow emphasis added.]
Webmaster’s Comments: LNG terminal operators, developers, FERC, and the Coast Guard all like to parrot, "LNG shipping and offloading has had a long and relatively safe history." The more cogent fact is — history protects no one. History certainly did not protect the Twin Towers on 9/11.
History is merely a record of the past. It is not an assurance of the future, when circumstances and world politics can be considerably different and more dangerous.
“It’s a hassle factor,” Stokes said of the proposal that would have LNG tankers offloading about 70 times during a year. Security measures, he said, require no marine activity a mile in front or behind a tanker, virtually shutting down Bay traffic. Both the Newport and Mount Hope Bridges would be closing during passages.
Stokes said cruise ships that presently visit Newport for one and two-day layovers would cancel Rhode Island as a stop. And LNG tankers would kill efforts to bring back the America’s Cup. [Red emphasis added.]
At the urging of Representative Anthony Weiner the U.S. Coast Guard has agreed to hold public hearings in Rockaway so that residents can ask questions and provide input on a proposed [liquefied] natural gas terminal that would be used to receive fuel tankers more than 15 miles off the Rockaway coast.
John McCutchen, senior vice president and chief operations officer for Gulf LNG Energy, said the current channel is sufficient for the terminal's operations, which are expected to start in October 2011.
FREEPORT -- Grand Bahama Power Company is pursuing the development of an liquefied natural gas (LNG) terminal on Grand Bahama in a bid to lower the cost of fuel for electricity generation, it was confirmed yesterday.
25 Feb 2010
Webmaster’s Comments: Here's yet another mixed message. Just yesterday it was reported the LNG project could get no LNG.
The US central bank is looking into Goldman Sachs’s role in arranging contentious derivatives trades for Greece, which helped the country to massage its public finances, Ben Bernanke, chairman of the Federal Reserve, revealed on Thursday.
Separately, Phil Angelides, chairman of the US Financial Crisis Inquiry Commission, told the Financial Times he was concerned about the practice of creating securities and “fully betting against them” – and about Goldman’s role in particular. Goldman declined to comment.
Webmaster’s Comments: Goldman Sachs is the venture capital investor financing Calais LNG's permitting.
By the end of this month, Excelerate will have unloaded about seven tankers at its offshore site, or about 15 to 20 percent of the gas used by New Englanders during the current season, he said. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Canaport LNG is supplying 20% of the Northeast's natural gas. Distrigas in Everett, Massachusetts is supplying 20%. Northeast Gateway is supplying another 20%. Soon, Suez Energy's Neptune LNG will also be supplying approximately 20% of New England's natural gas. That's 80% of New England's natural gas needs — already met by existing and under-construction projects, not to mention the natural gas arriving by existing pipeline from the Gulf of Mexico.
Ill-sited latecomers Calais LNG and Downeast LNG simply are not needed.
…Robert Knake, international affairs fellow at the Council on Foreign Relations, said it doesn’t matter that LNG tankers are almost impossible to detonate. All terrorists would need to create a catastrophe is to attack a ship from the water, breach its hulls, and set alight the leaked fuel. The fireball would devastate everything within a half-mile radius, he said. He also thinks we should worry about every shipment of LNG that comes into Boston Harbor, not just those from Yemen. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The world LNG industry's own terminal siting best safe practices indicate the Everett terminal location is inappropriate (see LNG Terminal Siting Standards Organization).
The tiny Coast Guard vessels with armed sailors aboard surrounding the ship and patrolling the harbor’s perimeters would be compromised in an instant by an organized terrorist effort – and whatever weapons the Coast Guardsmen are carrying would be made utterly useless in a situation where the control of the vessel itself was compromised or put into question Mayor Menino, City Manager Jay Ash and Everett Mayor Carlo DeMaria are absolutely right when they complain that the Coast Guard has it all wrong and that these deliveries are dangerous. [Red, yellow & bold emphasis added.]
Bradley said, “I’m not reviving that discussion, but I want to put you on notice that there was a little blurb in the State House News, which is basically our Intranet service, where the speaker and some of the members from that area were talking about how they’d like to eventually move the program offshore. Nobody mentioned Outer Brewster, except the reporter, who noted that there was a proposal that died in 2006.”
Shipbuilder Washburn & Doughty Associates, Inc. of East Boothbay, Maine recently delivered the Loretta B. Moran to Moran Towing of Lake Charles, LLC. The 98 ft, 6,600 hp, Z-drive tug is the sister to the Catherine C. Moran, which was delivered in November 2009. Both tugs will provide tug services for Sempra LNG's new Cameron LNG terminal, located near Hackberry, Louisiana.
Bradwood Landing LNG and the Oregon Department of Land Conservation and Development have entered into an agreement that stays the state's review period to decide whether the Bradwood Landing LNG project is consistent with Oregon's federally approved Coastal Zone Management Plan until September 15, 2010.
Energy usage and greenhouse gas emissions are perhaps the most significant areas where pipeline gas can have an advantage over LNG. However, this advantage is also highly dependent on various design factors. According to a recent study commissioned by the European Union, the typical energy “penalty” for gas delivery via pipelines is 10-15 percent (efficiency of 85-90 percent), whereas for LNG it is approximately 25 percent (efficiency of about 75 percent).
When comparing GHG emissions pipelines come out far ‘greener’ than LNG. For example, in Europe, pipeline transmission has a seven-fold lower carbon footprint than LNG. However, the GHG contributions of pipelines increase considerably over distance due to fugitive emissions of methane that are often inevitable along large pipeline tracks and these grow much faster than the transportation emissions from the tankers traveling over large distances.
24 Feb 2010
Webmaster’s Comments: Repsol YPF, S.A. (75% partner in Canaport LNG) owns LNG liquefaction facilities in Trinidad & Tobago. The Distrigas LNG terminal in Everett, Massachusetts, also supplies 20% of the natural gas requirements of US northeast.
Deep Panuke further moots ill-times and ill-sited Downeast LNG and Calais LNG.
Corridor Resources Inc. of Halifax, which has had producing gas wells in southern New Brunswick for several years, recently released plans to spend $28.6 million to drill and complete additional natural gas production wells in the McCully field near Sussex.
GUYSBOROUGH – High hopes for a mega project for Goldboro in the form of a $5 billion petrochemical project have all but disappeared. Ketlic Petrochemicals is now in the process of shutting down its Halifax offices.
Webmaster’s Comments: Mixed messages are coming out of the LNG industry. Some crow about an over-abundance of LNG in the world. No one has apparently informed Keltic Petrochemicals. Or, is it simply that the price is far better elsewhere in the world? Either way, LNG is not the golden boy in North America that it was once thought to be.
When it was first brought on stream in late January, it produced 12 million cubic feet of gas a day, a gusher by gas well standards, and a huge boost to Calgary-based Questerre Energy Corp., which has partnered in Quebec with the much bigger Talisman Energy Inc.
The oil patch has come to New Brunswick, too, to probe rocks that may parallel some of North America's biggest natural gas plays. The most daring companies have even begun to look at Nova Scotia and Newfoundland as new energy sources.
And what's clear is that the shale gas revolution, which has already shredded beliefs that North America is running short of natural gas, is now set to transform the way Canada thinks about energy. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: North America has 400-years' worth of domestic natural gas, mooting dependence on LNG from unfriendly sources overseas. Calais LNG and Downeast LNG would have us reduce our energy security, and pay more for the resulting natural gas.
DeLeo praised the Coast Guard's handling of the LNG shipment Tuesday but said he still expects a "long-term solution" that could include moving the energy facilities offshore to avoid the tankers entering the heavily populated inner harbor. [Red & yellow emphasis added.]
But officials wonder if scrutiny will continue
In 2004, a study commissioned by the Department of Energy concluded that a terrorist attack on an LNG tanker would cause “major injuries and significant damage to structures’’ a third of a mile away and could cause second-degree burns on people more than a mile away. Also that year, the Boston Fire Department estimated that up to 10,000 people could die in an LNG fire in Boston. Officials of the company importing the LNG, Distrigas of Massachusetts, dispute the risk outlined in the critical studies. Distrigas spokesmen contend the 2004 Federal Energy Regulatory Commission assessment was based on flawed assumptions….
Webmaster’s Comments: Most LNG terminal spokespeople like to justify their operations by citing FERC. But, when FERC doesn't agree with the LNG operator, FERC is "flawed."
“I am concerned, will they have all the bells and whistles and public safety units to make sure it arrives safely the next time, like it did today?” Menino said, referring to the Coast Guard and police vessels and helicopters that escorted the ship. He said he’ll continue to press Homeland Security officials to “drive home the issue” that the tankers should be offloaded offshore, noting it is done elsewhere.
The Golden Pass LNG receiving and regasification terminal on the US coast of the Gulf of Mexico, a joint venture among Qatar Petroleum, ExxonMobil and ConocoPhillips, will be in operation later this year, RasGas managing director and CEO Hamad Rashid al-Mohannadi has said.
Webmaster’s Comments: This is more bad news for Calais LNG and Downeast LNG — one more LNG import terminal being built way ahead of ill-timed and ill-sited projects in Passamaquoddy Bay.
The state has just told a company wanting to build an LNG landing on the Columbia that it likely will be denied because it hasn’t submitted a “three-dimensional model” of its effect on water quality. And that’s required for rebuilding an old harbor on a huge navigable waterway? See it in action: state government as obstacle.
Webmaster’s Comments: Yet, the State of Oregon and FERC are ignoring the LNG industry's own terminal siting best safe practices indicating the referenced LNG terminal is inappropriately located. For more on these industry best practices, see LNG Terminal Siting Standards Organization.
The Methane Princess is inbound, and she’s not to be trifled with. She’s 909 feet long and 142 feet wide, draws 33 feet and is loaded with liquefied natural gas (LNG). The 94,000-ton vessel is perceived as a giant floating bomb, and at slow speeds, within the confines of crowded shipping channels and ports, there’s simply not enough water passing over her rudder to maintain steerage. She might as well be adrift. Which is why, on this muggy, overcast September afternoon, the tractor tugboat Edward J. Moran is churning down the Savannah River, headed 8 miles into the Atlantic off the Georgia coast to meet the Princess and escort her to the Elba Island LNG terminal, 5 miles east of Savannah.
The sale did not include El Paso’s interest in the proposed 1.3-bcfd Sonora LNG terminal, covered by a separate joint venture with Houston’s DKRW Energy LLC. Sonora Terminal and Pipeline would deliver natural gas to northern Mexico and the southwestern US from the terminal site in Puerto Libertad, Sonora, Mexico.
Sempra Pipelines & Storage currently owns several Mexico-based assets, including pipelines in Baja California connecting Sempra LNG's liquefied natural gas receipt terminal near Ensenada with various power plants in the region, as well as pipeline systems in the United States. The current assets also include Ecogas Mexico S.R.L., a natural gas utility that serves more than 90,000 residential, commercial and industrial customers in Northern Mexico with operations in Mexicali, Chihuahua, La Laguna ("Torreon-Gomez Palacio") and Durango.
“I expect a year of smashing records in terms of LNG imports,” Chris Kostas, an analyst with Energy Security Analysis Inc. in Wakefield, Massachusetts, said in a telephone interview. “A lot of liquefaction has come on already and more will come on in 2010.”
Webmaster’s Comments: Chris Kostas' prediction is hardly significant for unpermitted US LNG import terminals — such as proposed Downeast LNG and Calais LNG — since there is already a vast over-build of import infrastructure. There would need to be an approximate 1,000% increase in LNG import demand to justify even more LNG terminals. Since North America now has 400-years' worth of domestic natural gas, additional proposed LNG import facilities are irrational.
Over the course of six months last year, Canada's National Energy Board shifted from a prediction that the decline in conventional gas output would far outstrip new shale supplies, to saying that shale gas could satisfy domestic demand "far into the 21st century" and spur exports of liquefied natural gas.
Too much gas or not, Canada will likely have to find more customers for its gas, since its traditional buyer, the U.S., is oversupplied. [Red, yellow & bold emphasis added.]
One problem is that the recession has eviscerated European demand for Russian natural gas (consumption dipped by 7 percent in 2009). Another is that demand in the United States for imported natural gas has fallen off too. Thanks to shale gas and other unconventional sources like tar sands, the U.S. is now close to self-sufficient in natural gas. It's a nightmare for Shtockmann, where the business plan hinged on freezing the product into liquified natural gas, or LNG, for export to the United States. [Red, yellow & bold emphasis added.]
Technological changes have already occurred as seen in the extremely rapid development of the Barnett, the Woodword, the Marcellus, the Haynesville and now the Eagle Ford shales. All that with more to come in Canada's Horn River and Montney shale gas discoveries.
Natural gas resources are increasing apparently without limit. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: North America is drowning in a domestic 400 year-ocean of natural gas.
23 Feb 2010
Hours before she addresses the national fishermen's rally on the steps of the U.S. Capitol Wednesday, Mayor Carolyn Kirk will be lobbying the federal government to add Gloucester to its list of high-risk urban terrorist targets.
In her case for raising the city's threat level, Kirk is pointing to the presence of two liquefied natural gas terminals just off the coast, including one that is expected to receive some shipments from the Middle Eastern nation of Yemen, a current security hot-spot. [Red emphasis added.]
Boston Mayor Thomas Menino and other local officials opposed allowing the ship and others scheduled to make deliveries into the harbor. But the U.S. Coast Guard authorized its arrival earlier this month.
News video only.
Webmaster’s Comments: Arrival under darkness increases risk.
News video footage is available on this webpage.
Distrigas -- the energy company behind the shipments -- declined comment, but the mayors of Boston and Everett, who have long been vocal on this issue, renewed their concerns about the increased risk that may come with LNG shipped from Yemen.
Webmaster’s Comments: This marks a notable change: Everett's previous mayor was welcoming of the LNG carriers.
News video footage is available on this webpage.
"I know public opinion is dead against the LNG tankers going into our port," Menino said this afternoon in an interview. "Offshore is the safest option. Why doesn't a company like Distrigas make safety number one? Why aren't they willing to invest in an offshore site?"
Webmaster’s Comments: Extra security cost $25,000 above normal Everett LNG transit security costs. The Yemini tanker arrived during the pre-dawn hours.
The U.S. Coast Guard, Massachusetts State Police and Boston Police escorted the tanker into the harbor so it could be unloaded at the station in Everett. The Coast Guard has said it would put in extra security measures for the tanker because of Yemen’s strong ties to al-Qaida, including boarding the tanker out at sea to inspect it for proper documentation and possible stowaways.
The Boston mayor has been meeting with federal officials to try to create an offshore facility to unload the liquefied natural gas farther away from heavily-populated areas. He said the process has been slow. Industry officials have said creating an offshore facility would be costly.
Webmaster’s Comments: Industry officials are concerned about their profits, not about risks to civilian lives.
PROVIDENCE — Representatives of the building trades told a special Senate committee on Tuesday that the construction of a floating liquefied natural gas terminal in Mount Hope Bay would benefit the region’s moribund economy by creating hundreds of well-paying jobs.
The opponents argued that the delivery of LNG in tankers through Narragansett and Mount Hope bays would disrupt other boating traffic and could pose a major safety and security threat to communities that flank the route.
Tim Byrne, business agent for the United Association of Plumbers and Pipefitters, which has 1,300 members in Rhode Island and Southeastern Massachusetts, acknowledged those concerns in his testimony, but said he still stands behind the project.
Webmaster’s Comments: One cannot blame the hungry for accepting tainted food; however, placing thousands of people's lives unnecessarily in harms way is unjustifiable. In addition, doing so violates the LNG industry's own best safe practices. (See LNG Terminal Siting Standards Organization for more.)
GRANTS PASS, Ore. — Oregon environmental regulators have told the Texas developers of the Bradwood Landing liquefied natural gas terminal on the Columbia River that a crucial water quality permit will likely be denied.
Oregon Department of Environmental Quality has rebuffed three "demands" from the Bradwood Landing liquefied natural gas project developer and warned that a key water quality permit will likely be denied.
Another potential setback to the company's progress came in the form of a legal brief submitted by attorney generals [sic] from 15 other states supporting Oregon's argument in its lawsuit against the Federal Energy Regulatory Commission. The state's lawsuit, backed by the state of Washington, the Nez Perce Tribe and the anti-LNG group Columbia Riverkeeper, stems from FERC's 2008 approval of the Bradwood project, which challengers argue was wrongly made before required environmental and state permits were approved. [Red & yellow emphasis added.]
The Federal Energy Regulatory Commission had until Feb. 19 to respond to requests to rehear Jordan Cove Energy Project's application. Instead of giving an up or down vote, the commission issued a tolling order.
"By issuing a tolling order, the Commission gives itself more time to review the arguments raised in the petitions for rehearing," wrote FERC spokeswoman Tamara Young-Allen in an e-mail. "The Commission may then, at its own discretion, render a decision when it is ready to do so."
There now is no deadline for FERC to make a decision, Young-Allen added. [Red emphasis added.]
Webmaster’s Comments: FERC has a responsibility to the public interest to provide a timeline for its response.
Gazprom has run into new competition from liquefied natural gas and shale gas. Traditionally, Gazprom delivers gas only to Europe and through pipelines. Now LNG is flooding the European market, not least because the United States has suddenly started mass-producing cheap shale gas, replacing the anticipated U.S. demand for LNG. Steadily increased European demand for gas has been replaced by a permanent glut. The International Energy Agency predicts that this will remain the case for the next three to five years. [Red, yellow & bold emphasis added.]
"You should not underestimate the extent to which Gazprom got burned in 2009 because of its reliance on Europe. LNG may not make sense in terms of tapping the North American market, but it does make sense in terms of flexibility. That is what they are chasing," said Nikos Tsafos, senior analyst at PFC Energy in Washington. [Red & yellow emphasis added.]
22 Feb 2010
In an earlier press release dated June 26, 2008, Corridor released the results of an independent shale gas resource study conducted by GLJ Consultants of Calgary describing a shale gas resource-in-place potential in excess of 60 trillion cubic feet in the Sussex/Elgin area of New Brunswick. The Apache program is, of course, of particular interest to Corridor because of its potential to open up the initial development of these resources. [Red, yellow & bold emphasis added.]
One study of the area suggests it may be the largest undrilled prospect in Eastern Canada, with recoverable reserves of up to two billion barrels of oil and five trillion cubic feet of natural gas. [Red & yellow emphasis added.]
Webmaster’s Comments: Canada's decreasing conventional natural gas supplies are being surmounted by huge domestic shale gas supplies.
Hess, Weaver Cove Energy, all owners of tankers steaming up the bay and all parent companies must be forced to take full and total financial responsibility for any potential accident or terrorist act that could adversely impact our lives, property and livelihood. An accident caused by a terrorist act is particularly alarming since most, if not all, of our homeowners’ insurance policies explicitly exclude coverage for damages resulting from an act of terrorism. [Red & yellow emphasis added.]
[I]t’s well known that western Canada also has large-scale, low-cost natural gas resource plays. In northeast British Columbia, the Montney and Horn River are looking like they are the Marcellus equivalents of the west. Other plays could follow, especially as drilling and completion technologies continue to improve. The big issue is that pipeline transportation costs from BC to eastern Canada, and into the US, are a burden that makes western Canadian gas uncompetitive against a resource like the Marcellus that is right underneath the feet of customers in eastern states.
While it may become increasingly uneconomic to flow western gas all the way to the east, the opportunity for Canadian gas producers with vast, low-cost shale and tight gas resources is to push out high-cost, conventional US production in the western half of the continent. Eventually, an LNG export terminal could help producers’ take market share in the Pacific Basin too. [Red & yellow emphasis added.]
Transportation and Development Services Director Ed Wegner has chosen to process the application under the Type IIa process, which calls for a public hearing before a hearings officer or the county planning commission. In this case, a hearings officer will conduct the Oregon LNG hearing, which has yet to be scheduled. Any appeal of the ruling will be heard by the county board of commissioners.
Booming Natural Gas Supply but Minimal Demand Growth
Despite significant withdrawals, storage remains high, production remains robust (especially from shales, such as Haynesville and Barnett) and the rig count is trending back up; none of this bodes well for the supply/demand balance.
The Energy Information Administration expects natural gas demand in the U.S. to increase only 0.4% (to 62.5 bcf/d) in 2010 and another 0.4% in 2011; these increases are primarily due to marginally better economic conditions boosting demand in other segments (such as residential, commercial and industrial). [Red & yellow emphasis added.]
21 Month 2010
The [New Brunswick] Department of Natural Resources has opened up more than one million hectares [2.471 million acres or 3,861 square miles] of land for oil and gas exploration after an industry firm interested in shale gas made the request.
Last June, Corridor Resources released a study by a third party that put the company's shale gas resource near Sussex at 59.1 trillion cubic feet; the firm's McCully Field resource is estimated at about one trillion cubic feet. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Canada's burgeoning shale gas development will further moot imports at both Canaport LNG and ill-proposed Downeast LNG and Calais LNG.
Graham and the premiers of Quebec, Ontario, Manitoba, Saskatchewan, Nova Scotia and Prince Edward Island met with Lisa Jackson, head of the Environmental Protection Agency, and Obama's chief economic adviser, Larry Summers, in the West Wing of the White House.
The researchers found that, per capita, the number of hospital beds was the same everywhere, but the number of sexual offenders had grown much more rapidly in the oil and gas towns than in those dependent on recreation or agriculture.
[Note: The link in this item will download a 6.93 MB PDF file.]
Local governments are often caught unprepared by the waves of new growth and are at a disadvantage to mitigate potential growth problems. … Expectations for economic benefits are often unrealistically high, and while economic and job growth does occur, these expectations are not met. A significant body of literature shows that boomtowns can harbor disproportinate increases in social problems such as crime, mental health problems, community disatisfaction, education shortfalls, and other indicators. ….
As population grows at boom rates, existing local services fall short of need. School classrooms, retailing inventories, housing, and the number of physicians in the community do not grow as rapidly as the number of people increases. Many people’s recreational requirements are not satisfied by the available opportunities. The quality of life in the community is degraded.
Oftentimes, energy development is dependent on volatile commodity prices or other economic factors, and development can stop or even quickly reverse on a moments notice, and the threat of overbuilding can further complicate planning efforts at the local level.
Government and Community Reaction to Boomtown Growth
- Enthusiasm, as officials and residents concentrate on the positive economic impacts of job growth and retail spending that are espoused by energy industry spokespeople, while the possible negative impacts are either unknown or are dismissed as unlikely in their specific area;
- Uncertainty, as the town starts to change as new workers arrive in noticeable numbers. It is realized that some negative impacts have arrived along with the positive benefits, and that these negative impacts will likely grow. Officials begin to perform preliminary research; however, there are few resources or experienced staff to draw upon, while industry and state government claims there is nothing that can be done. …;
- Near Panic, as the industrial activity and associated impacts grow much quicker than anticipated and the community character changes dramatically in the eyes of longer-term residents who become confused and angry at local officials and each other. Government services are overwhelmed and quality of services declines while officials realize that any increase in revenues will not offset the expenditures in the near future or at all. Government officials find that they are ill-equipped, unprepared or do not have jurisdiction to make the necessary policy decisions while longer term residents feel new government polices are an affront to the community’s historic way of life.
[A] number of overall trends have emerged that present the economic impacts as largely mixed (depending on the community, individuals, and sectors involved) and smaller than was originally assumed by community members.
[R]esidents typically see the development as providing economic benefits both before and during the development, but that the level of perceived economic benefit drops once the development occurs (Thompson and Blevins 1983).
Youth are found to face mixed impacts as they may receive greater job opportunities but will also have to deal with increased crime in their community and overcrowding of schools. Some studies even suggest that boomtown students are more likely to move away after high school than in comparison communities (for a detailed discussion, see Freudenburg 1984b).
A second boost could come from plans by Apache and Kitimat LNG to build a gas liquefaction plant on the British Columbia coast which could create demand in overseas markets for 500 million cubic feet to 1 bcf per day of LNG, which would fetch much higher prices than gas in North America. [Red, yellow & bold emphasis added.]
Oregon environmental regulators have told the developer of a proposed liquefied natural gas import terminal on the Columbia River that they will likely deny the project's water quality permit in May in the absence of substantially more data on potential impacts to the river.
The demands highlight an ongoing regulatory showdown between the Oregon Department of Environmental Quality, federal fisheries regulators and NorthernStar Natural Gas Inc. The Houston-based company has proposed building an LNG terminal at an abandoned mill site on the lower Columbia River, 25 miles east of Astoria.
Some of the majority Democrats’ traditional allies are less than satisfied with the Legislature’s job-creating efforts. About 400 construction trades workers and their union representatives spoke out earlier this month at a Capitol rally for several bills they wanted — but won’t likely see — passed this session.
Among the apparently doomed bills, one would make it easier for liquefied natural gas projects to secure permits needed to install miles of pipelines — a controversial proposal opposed by environmentalists and potentially affected property owners but aggressively sought by the industries and labor unions that would benefit from such projects.
19 Feb 2010
This kind of proximity lent itself to new perspective. I could picture a guy with a rocket launcher in any one of the hundreds of condos or offices on the ship’s path causing a fireball that, despite what Distrigas assures us, would roll from Faneuil Hall to Framingham. And please, spare the details of the ship’s double hull.
Webmaster’s Comments: Flagship Wharf is merely 700-feet or so over the water from the LNG ships' transit fairway — well within Hazard Zone 1, where all life would be at risk.
The pipeline company wants to limit the gas "off-take" in Alaska to keep as much gas volume as possible flowing the entire length of the pipeline. That is important to the economic viability of the pipeline and TransCanada's ability to finance its construction.
Possible projects include the continuation, or an expansion, of the LNG plant now operating near Kenai, a possible restart of the Agrium fertilizer plant also near Kenai (the plant is now closed) and a gas-to-liquids plant that would use the Fischer-Tropsch chemical process to convert natural gas to high-value liquid fuels for sale on the U.S. west coast or in export markets.
Perhaps what makes oil rig and gas pipeline work truly difficult is the danger the workers face as a matter of course, day in and day out. These workers can put in 12 or more hours each day, operating or fixing heavy machinery, negotiating slippery surfaces and working on multiple platforms. Many of the workers are young and inexperienced, and not every employer takes the necessary time to properly train them. Moreover, the constant demand for oil and gas makes for a high-pressure work environment in which worker safety is not always the predominant concern.
Analysts have told Platts that while there's a more than 50% drop in gas rig count over the past year from low gas prices and oversupply, production is only down "marginally" because producers are ramping up shale plays, where gas is "extracted more quickly and cheaply," according to Mark Davidson, editorial director of U.S. Gas News at Platts. "This has meant supply continues to exceed demand, and there's no sign of that production boom abating." [Red & yellow emphasis added.]
18 Feb 2010
It's … likely that Canada's ambassador to the United States Gary Doer's recent call for would-be LNG developers to drop their plans for terminals on the Maine side of Passamaquoddy Bay will be discussed.
Doer said in a letter earlier this month to the U.S. Federal Energy Regulatory Commission that Ottawa is standing firm in its opposition to the movement of liquefied natural gas tankers into [Passamaquoddy Bay]. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: If Downeast LNG and Calais LNG really believe their projects are needed, they need to move to industry-compliant sites. That requires moving to appropriate sites outside of Passamaquoddy Bay. Otherwise, they have no hope.
A commissioning cargo from Trinidad & Tobago arrived earlier this week at GDF Suez's Neptune LNG deepwater port. According to a company official who spoke with Platts Gas Daily, the commissioning process is expected to continue through March 2010.
Webmaster’s Comments: This is the third nail in the Downeast LNG and Calais LNG coffins. (The first two were Canaport LNG and Northeast Gateway Deepwater Port) There is so much LNG import infrastructure already available — with many more terminals already permitted — that terminals have been operating at only around 10% of capacity. With permitted terminals also coming online, the need is further diluted. Plus, the US has four times more natural gas in reserve than was though even last year! (See "A game changer" in today's news posts, below.)
There simply is no need for Downeast LNG and Calais LNG.
Neptune LNG/Suez Energy North America based in Gloucester is one of two offshore LNG terminals off our coast just got delivery of one of their support vessels. The 128' "Independence" is one of the most advanced vessels of her type in the world!
Webmaster’s Comments: Photographs and specifications are included.
This week Distrigas LLC submitted its semi-annual report to FERC detailing the operations of the Everett LNG terminal in the second half of 2009. The report describes terminal maintenance activities and LNG cargos delivered to the facility, and certifies that there were no safety incidents at the facility during the period covered by the report.
Separately, the town council of Burrillville, R.I., voted to adopt two resolutions previously passed by the towns of Bristol and Middletown, R.I., in opposition to the Weaver's Cove LNG project. The resolutions are available in FERC's eLibrary.
Webmaster’s Comments: The Weaver's Cove LNG project is just as industry best practices non-compliant as was defunct Quoddy Bay LNG.
The council is still hoping to sign a joint resolution against the LNG facility in concert with other coastal communities, with the venue for those discussions slated to be a March 26 “summit” meeting hosted by the Alliance for a Livable Newport at the Community College of Rhode Island campus in Newport.
FERC issued an order today rejecting Washington Gas Light's rehearing request regarding FERC's prior approval of a new interconnection between Transcontinental Gas Pipe Line and Elba Express, a new sendout pipeline from the Elba Island LNG terminal. Finding that WGL's concerns regarding regasified LNG from Elba Island reaching its system in significant concentrations are "unsupported (and unquantified)," FERC determined that allowing WGL's "restrictive" gas quality requirements to control Transco's specifications "would be detrimental to the public interest."
Today FERC granted a waiver of its prohibition on tying and certain capacity release requirements sought by Statoil Natural Gas LLC and Gazprom Marketing and Trading USA, Inc. The parties sought the waiver to allow a release to Gazprom of Statoil's open access transportation capacity on the Cove Point sendout pipeline, as well as capacity on the Dominion Transmission, Inc. pipeline that is downstream of the Cove Point pipeline, to be tied or linked to a purchase and sale agreement whereby Gazprom would sell LNG to Statoil at the inlet of the Cove Point terminal, Statoil would store and regasify it and sell it back to Gazprom at the outlet of the terminal. In this case, FERC found no negative effects, including no impacts on open access competition. The Commission also noted that the waiver is an "integral component" of the Shtokman LNG liquefaction project and that granting this waiver will "facilitate the investment decisions and continued development" of the Shtokman project.
Even though shale gas is coming on line, our gas still has a critical role to play. I believe the abundance of gas will cause industrial sectors from trucking to power generation to convert to gas, creating a more stable market where Alaska gas, shale gas, and foreign LNG will all find their market.
Webmaster’s Comments: The reference to stored LNG includes more than 120 LNG peakshaving facilities around the country. These are separate from LNG import terminals (see Zeus Development's list of LNG peakshaving plants in the world, including the US).
Last week, J.P. Morgan released a report saying that North America doesn't have 2 trillion cubic feet of natural gas in place. It has 8 trillion cubic feet. That's four times last year's new and improved numbers. This incredible surge in total gas resources will completely reshape the international energy landscape. Domestic natural gas is going to be so plentiful and so cheap that liquefied natural gas carriers from Qatar and the Middle East will stop coming to the U.S. They'll go to India and China instead. We just won't need [LNG carriers] anymore. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: North America now has around 400 years' worth of natural gas at today's consumption rate.
There simply is no need for Calais LNG and Downeast LNG.
Natural gas supplies are more plentiful than ever before. Even as natural gas prices plummeted to six-year lows, producers have continued to drill. Why? According to Valerie Wood, President of Energy Solutions, Inc. producers have continued to drill because of increased efficiencies and lower service costs, and there is no indication that is going to change in the near future. [Red & yellow emphasis added.]
Before the shale plays, it looked like LNG was going to be necessary to provide gas for the U.S. After the shale plays have come online, we've seen how prolific they are; we've had extremely low rates of utilization for liquefied natural gas regasification facilities, and that's probably going to continue. [Red, yellow & bold emphasis added.]
According to the report, the operator has set the deadline for an investment decision on LNG production at December 2011. If a decision is not reached by this date, the field's gas will be transported through pipeline and shipped to European markets.
Webmaster’s Comments: The target market for the resulting LNG was the United States. With all the domestic natural gas now available in the US (100 years' worth), Gazprom has had to rethink its marketing strategy. LNG to the US is out.
17 Feb 2010
In supplemental comments filed with FERC this week, Nulankeyutomonen Nkihtahkomikumon, Save Passamaquoddy Bay-Canada, and Save Passamaquoddy Bay-U.S. suggest that the Commission is not evaluating the circumstances surrounding the Downeast and Calais LNG proposals in the same manner. Specifically, the comments argue that FERC's Draft EIS prepared for the Downeast LNG project did not thoroughly assess the potential environmental impacts of an expansion of the Maritimes & Northeast Pipeline. In contrast, in the Calais LNG proceeding, FERC has stated that a Maritimes expansion is a key component to the project and that it will fully consider such an expansion as it evaluates the environmental impacts of the Calais LNG project. [Red & yellow emphasis added.]
"As was previously noted in the Draft Environmental Impact Statement issued by the FERC for Downeast LNG, the passage of LNG tankers in this region requires the collaboration of the Government of Canada. Given continuing Government of Canada opposition, you may therefore wish to advise project proponents that they should consider withdrawing their applications as those projects cannot go forward as envisioned." [Red, yellow & bold emphasis added.]
Webmaster’s Comments: It cannot be stated any clearer: LNG proposals for Passamaquoddy Bay are impossible.
In a July 2009 letter to FERC concerning the Downeast LNG proposal, Premier Shawn Graham commented, "While the vessel transit is subject to federal Canadian jurisdiction, the impacts and issues identified in this report fall squarely upon New Brunswick and are within the jurisdiction of my province to review, analyze and address. It is not within the scope of the commission's authority to address and/or propose mitigation for these impacts and issues."
The [Maine State Plannin Office] report … comments, "The state is concerned that the Canadian government has voiced its opposition to this project, as it has to the proposed Downeast LNG project, and has not indicated to date a willingness to participate in formulating an emergency response plan, or to enter into discussions on accomplishing the necessary security measures required for safe transit of the LNG vessel through Canadian and United States waters." [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Even the state's planning office recognizes that the LNG projects cannot fulfill the LNG transit safety and security requirements.
Quoddy Bay LNG is being sued by a second company for nonpayment of services. TRC Environmental Corporation, a Connecticut corporation, is suing the company that proposed building a liquefied natural gas (LNG) terminal at Pleasant Point and its principals, Donald Smith and Brian Smith, for $1.2 million. The suit was filed in January in U.S. District Court in the western district of Oklahoma, since Quoddy Bay LNG LLC is an Oklahoma limited liability company. [Red & yellow emphasis added.]
I think Mayor Menino should take a few of his top engineers and fly up to Saint John, New Brunswick, and view from the air the giant Irving fuel storage area and its offshore unloading facility that keeps the city safe. [Red & yellow emphasis added.]
Webmaster’s Comments: Canaport LNG is 5 miles across the water from Saint John. Canaport LNG does not require transiting closely past civilian populations. Canaport does not require transiting up a long, inland waterway where navigational risks are greater. The Everett terminal — like the ill-sited Calais LNG and Downeast LNG proposals — violates LNG industry terminal siting best safe practices.
Speaking to Platts LNG Daily, RBC Capital Markets analyst Scott Hanold said that he does not expect natural gas from the U.S. Marcellus Shale play to be exported from the United States as LNG. Hanold's comments came following this week's announcement that Mitsui, a global LNG player, made a substantial investment in Marcellus Shale assets.
The states of Oregon and Washington, Columbia Riverkeepers and the Nez Perce Tribe are still appealing the approval, arguing FERC made its decision before environmental reviews and state permits were in.
LNG plant in Texas may not even be built
With natural gas plentiful and cheap in North America, Sempra’s plants are not operating anywhere near capacity. [Red & yellow emphasis added.]
Just a few months after Citigroup made history as the first company to re-export LNG from the United States (from the Freeport LNG terminal), the firm is now laying claim to its second cargo. The Q-flex tanker "Al Sadd" loaded in Qatar on the 4th of January and discharged only days ago at Sabine Pass for Total's account, but has extended her stay at the berth to re-load volumes sourced from Cheniere.
Lab testing cannot provide all the answers as to what happens when a 100,000-ton ship crashes into a large piece of ice. But BMT is at the forefront of research and is discussing with shipping companies how to build a new, safe generation of Arctic tankers. What is well known is that even light ice can exert dangerous forces on a ship, especially those with poor quality steel. Furthermore, the speed of a ship is critical in an impact; while most sail quite slowly in the Arctic, liquefied natural gas carriers cannot because for reasons of efficiency they have to keep up with the trains (facilities) producing the LNG.
This means there will soon be big ships in the Arctic travelling quickly, and no operational experience exists in this area. BMT therefore is trying to develop a thorough understanding of what the loads of these ships will be, and whether LNG containment ships will take the dynamics of ice-breaking loads. These ships will, however, cost significantly more than the standard open water ships. [Red emphasis added.]
In the United States, unconventional gas extraction (from shale and other “hard gas” formations) is rapidly transforming the international gas trade. The US overtook Russia in 2009 as the world’s leading producer with 624 bcm. Unconventional gas has turned the US from a net consumer into a self-sufficient market in 2009, and potentially into a net exporter through LNG. [Red, yellow & bold emphasis added.]
“If European shale gas producers reach just half of the growth rate of their American counterparts, Shtokman and Russian pipeline projects won’t be needed,” Korchemkin said. The International Energy Agency estimates Europe’s shale gas reserves at 15 trillion cubic meters.
14 Feb 2010
“Forty years ago Save The Bay was founded by citizens to stop an oil refinery in Tiverton,” Stone said. Since then he said the group has fought against four oil refineries, two LNG terminals, one nuclear power plant and one coal-fired power plant.
"We are asking the court to look at the entire record and see the error of FERC's decision, which was arbitrary and capricious," Washington attorney Bart S. Fisher said. "We are basically suing FERC and asking it to reverse its decision."
Nearly a dozen government, business and community groups, including the state of Maryland and Baltimore County, filed appeals of the FERC decision. The five-member panel declined to hear any of the appeals. The lawsuit Friday, filed by the community group LNG Opposition Team, is also asking the appeals court to review that FERC action.
Among the conditions AES must meet is receiving a water-quality permit from the Maryland Department of the Environment. MDE has denied approval of the company's plan to dredge the Baltimore harbor to depths that could handle the large LNG tankers, saying that it would remove significant amounts of contaminated sediment and create a dead zone by depleting oxygen vital to aquatic life. AES has also not submitted a plan for disposal of the sediment. [Red emphasis added.]
Webmaster’s Comments: The Sparrows Point LNG terminal does not comply with LNG industry terminal siting best safe practices.
With a federal court leveling another blow against a proposal to construct an LNG facility at Sparrows Point and with more lawsuits expected this week, the shipyard’s owner has filed for a permit to expand an adjacent cargo pier and dredge two basins.
Last week, the U.S. 4th Circuit Court of Appeals denied AES Corp.’s petition to rehear that court’s Dec. 22 panel decision on a case involving the Maryland Department of Environment’s April denial of a water quality certification for the project. [Red emphasis added.]
"If somebody wanted to buy it today, I would consider selling the project," Hulse told Dow Jones Newswires at a conference on liquefied natural gas. "But the fact is that it doesn't cost us much to hold it."
In his comment to Dow Jones, Hulse said a new LNG project is not feasible because rising supplies of domestically produced gas. [Red, yellow & bold emphasis added.]
For this year’s lobby day, about twenty young Oregonians converged in Salem on February 9th, to meet with legislators and discuss bills that can help stimulate Oregon’s green economy while reducing waste and pollution. Our priorities included supporting Rep Ben Cannon’s proposed ten-year ban on offshore oil and gas exploration (House Bill 3613), smart urban development that provides for the needs of a growing population while reducing emissions from vehicles (Senate Bill 1059), and protecting rural communities and public lands from high-carbon liquefied natural gas (LNG) development.
A surge in domestic US natural-gas supplies is stalling ambitious plans for a raft of liquefied natural-gas import terminals along the country's coastlines. At present, the US has nine LNG receiving terminals, including one in Puerto Rico. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: News for Calais LNG and Downeast LNG is all bad.
In late August the Vancouver Sun ran an article on the bullish prospects for Canadian shale gas. The piece began this way: “What energy crisis? Despite what you may be hearing about a global peak in oil production, waning reserves, and $100-plus oil prices, North America is suddenly awash in fossil fuel.”
“[T]here is no reason North America shouldn’t be energy self-sufficient if we can displace a lot of the oil with natural gas.” [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Calais LNG and Downeast LNG are expensive, wasteful projects that would merely create greater dependence on foreign energy — exactly contrary to the goal of US energy independence.
Exxon Mobil Corp. and explorers including Chevron Corp. are securing land in Europe to exploit shale gas, a hard-to-extract deposit that could reduce global demand for liquefied natural gas, JPMorgan Chase & Co. said.
“A land-grab has occurred in Europe over the last two years with majors such as Exxon, Conoco, Chevron and Statoil ASA (STO) all participating, not willing to miss out as they did in the U.S.,” said Mark Greenwood, a Sydney-based analyst with JPMorgan. “While it’s still early days for European and Chinese shale gas plays, its potential is yet another threat for the LNG supply-demand balance.”
My, how the worm is turning. Which all goes to show the danger of putting all your chips on one number. [Red & yellow emphasis added.]
Webmaster’s Comments: The entire world LNG industry may be falling on hard times.
In a sign that the rise of U.S. unconventional gas production has changed global gas markets, Gazprom and partners on Friday said first Shtokman liquefied natural gas output had been pushed back from 2014 to 2017, citing "changes in the market situation and particularly in the LNG market."
Shtokman LNG, whose main target market is the United States, has had to adjust to a new reality in which the United States — once considered to be a big growth LNG market — does not need incremental LNG supplies for the foreseeable future.
"The LNG side of the project was always predicated on the growth of the North American market. Now if long-term shale is a game changer and the U.S. doesn't need large amounts of LNG, it doesn't make a huge amount of sense to develop a large LNG project," said Frank Harris, an LNG analyst at consultants Wood Mackenzie.
Successful extraction of shale gas, another unconventional fuel, has led to what International Energy Agency chief economist Fatih Birol called “a silent revolution” in the United States. The world’s biggest energy consumer, the United States may become self-sufficient in gas through its shale-gas developments. Unconventional fuels had been too complex to develop until new technologies made extraction feasible.
“U.S. shale gas could grow by 2015 to a similar scale as the entire global LNG market currently,” Greenwood said. “A land-grab has occurred in Europe over the last two years” as international companies such as Exxon Mobil, ConocoPhillips, Chevron Corp. and Statoil seek resources.
Webmaster’s Comments: Even Russia recognizes the futility of additional incremental LNG imports to the US. Calais LNG and Downeast LNG are lost causes.
12 Feb 2010
[City Councilor Joseph Cassidy] said he was "very much dismayed" after reading a story in this week's Calais Advertiser reporting on the ambassador's comments about Calais LNG and Downeast LNG, "suggesting we ought to just have those pulled off the table."
"I am growing very tired of the hypocrisy and hostility coming out of New Brunswick and Canada, generally. I'm also equally sometimes as upset that our senators in Washington seem unwilling to jump in the fray on our behalf. We're trying to do something good here and maybe it's time for the state to consider a moratorium on the foreign natural gas going through our pipelines, that's my only comment for tonight," Cassidy said.
Webmaster’s Comments: The City of Calais ignores world LNG terminal siting best safe practices that, from decades of experience and research, were promulgated to protect the LNG industry and civilians. Calais government is being blinded by false hopes. (See LNG Terminal Siting Standards Organization for more on LNG terminal siting best practices.) Further, preventing natural gas from entering the US from Canada would hurt the US — Maritimes & Northeast Pipeline natural gas costs less than the gas from LNG imported at Everett, Massachusetts (see our Announcement, "Imported Natural Gas Price at Calais, ME, Cheaper Than Everett, MA").
While maintaining his confidence in the US Coast Guard, State Police and Everett’s own Police and Fire personnel, Mayor Carlo DeMaria Jr. called upon Senator John Kerry and Representative Edward Markey in Washington D.C. to help his latest effort, ensuring homeland security along the Island End area of Everett. The commercial and industrial area along the harbor is a hub for many industries, including the much talked about Distrigas/ Suez LNG facility. Mayor DeMaria is also looking forward to calling on our newly elected Senator, Scott Brown, to help in securing federal funding for improvements to the area.
PROVIDENCE — Representatives of the state’s coastal council, its largest environmental group, saltwater anglers and marine trades raised a long list of objections Thursday evening to Weaver’s Cove Energy’s proposal to deliver tankers of liquefied natural gas to a floating terminal in Mount Hope Bay.
Usually, [Coastal Resources Management Council Executive Director Grover Fugate] said, the CRMC tells applicants what information it wants submitted. Here, he said, Weaver’s Cove told the CRMC what it wanted to submit.
Webmaster’s Comments: Even if LNG imports double, US LNG import terminals would be operating at 20% of capacity — leaving no need for Calais LNG or Downeast LNG.
[E]veryone is now quite aware of the shale plays which have been a complete game changer in the energy arena. It is now clear the US has enough domestic natural gas to supply home heating and industrial consumption as well as to replace all dirty coal electrical generation and power half the US car and truck fleet - all of this, for at least 100 years.
Despite a frigid winter and a nat gas rig count that was sharply curtailed in 2008/2009, the US nat gas inventory level is still 7% above the 5 year average. Natural gas supply is a light switch away in the US. The supply question has been answered – US domestic natural gas supplies are abundant. [Red & yellow emphasis added.]
Webmaster’s Comments: Simply put, proposed LNG import terminals like Calais LNG and Downeast LNG are unneeded late-comers without futures.
11 Feb 2010
This announcement from USCG came the same day Rhode Island Attorney General Patrick Lynch testified at a state Senate hearing, protesting Hess LNG LLC's development plans for an LNG offloading terminal in Mount Hope Bay. Lynch has been campaigning for the past six years for prevention of any development of LNG terminals because of the environmental, economic and safety hazards.
Massachusetts coastal waters are a microcosm of what is going on nationally. So far, there are more than 50 proposals for similar LNG sites, and wind energy companies are watching what happens in Nantucket Sound with baited breath. The best picture I can paint is not that of an open wilderness, but that of a Wild West-like "grab" by industry for almost any piece of the ocean they can get. Is that really what the Times, fishing communities, conservationists, or anyone else really wants to see?
When the LNG sites were being considered, because of the law being used (the Deep Water Ports Act), the primary agencies involved were the U.S. Coast Guard and the Federal Energy Commission. There were minimal places for the agencies concerned with managing fisheries or other living resources (such as National Marine Fisheries Service) to have any say in the matter. The current plan would unify management into one cohesive agency that takes all aspects into consideration; please tell me how that is not preferable to what is happening now? [Red emphasis added.]
… Suez LNG’s Neptune project ten miles off the coast of Massachusetts is nearing completion. In all, the US Maritime Administration, also known as MARAD, has approved eight of 16 applications for deepwater LNG offshore port licenses. Prospects appear to have dimmed…as a number of operators have withdrawn plans for LNG terminals or put them on indefinite hold.
Not coincidentally, enthusiasm for expanded LNG importing capacity cooled about the same time that US shale gas plays, and the technology necessary to exploit them, began to heat up, raising the prospect of large domestic reserves.
An offshore terminal allows a number of advantages, he says, including easy access for large LNG carriers and [fewer] regulatory hurdles than bringing a carrier into port. There’s also the permitting issue: getting new permits for onshore terminals is increasingly difficult on the Gulf Coast, particularly in places like Alabama that have limited shoreline, much of which is off-limits to development. Environmentalists have also raised concerns about the safety of LNG operations.
Offshore installations, because they usually have lower up-front capex costs than land-based terminals and are not as dependent on high throughput rates, can make sense in places where demand is ‘extremely seasonal,’ McDonald says.
‘When some of these were proposed, even three, four, five, six years ago, we were up in arms – the US is going to need LNG! The US is going to need LNG! And I think it’s safe to say that now the US does not necessarily need [LNG]. It might still get it, but it doesn’t need it. [Bold, red & yellow emphasis added.]
Webmaster’s Comments: Unlike Downeast LNG and Calais LNG, offshore siting makes more sense, but US LNG import capacity is already considerably overbuilt. Even if Downeast LNG and Calais LNG were to now propose building offshore, their projects would be moot.
Fed agency slow to change, but state could stymie projects
In January, an administrative law judge issued an order directing a series of town hall meetings to be held "to permit interested parties and Oregon Pipeline an opportunity to express their views and concerns over Oregon Pipeline's conduct with landowners during the environmental review process."
10 Feb 2010
Webmaster’s Comments: LNG import terminal ownership in the US is not turning out to be the money machine they have been hyped to be.
In a filing submitted last week, Oregon LNG asks Commissioners not only to cancel the public meetings, but also to stop a FERC Administrative Law Judge from writing up a fact finding report about the complaints.
It was a little more than two weeks ago when FERC took the unusual step of saying it would hold a series of town hall meetings to listen to landowners and representatives of Oregon LNG talk about what happened during the two-day field trip in early December. FERC staff and Oregon LNG representatives toured several properties along the proposed pipeline route.
While saying he would let the market decide whether LNG terminals should be built, Norris also said the country needs a policy that reins in greenhouse gas emissions and encourages a diverse energy portfolio.
Many are still surprised to learn that thanks to prolific production from plays such as the Haynesville Shale in Louisiana and the Barnett Shale in Texas, the US appears to have overtaken Russia to become the world's largest producer of natural gas. At one point in early 2008, US gas production was growing at a double-digit pace; it wouldn't be a stretch for US producers to match that growth rate again if there were enough domestic demand to support higher output.
This is a true sea change in outlook: Just five years ago, most pundits were discussing the need for the US to import more gas in the form of liquefied natural gas (LNG) to meet demand. Now, US LNG import facilities sit idle and the talk centers around potential new ways to use domestically produced gas or, ironically, the opportunity to export North American gas to energy-hungry markets in Europe and Asia. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The US is swimming in domestic natural gas. LNG import terminals sit largely idle. Even doubling LNG imports would increase average terminal usage to only around 20% of their capacity.
Calais LNG and Downeast LNG are merely wishful thinking.
The EIA said imports in 2010 as a whole are expected to rise versus 2009, as production comes online in Russia, Indonesia, Yemen and Qatar. However, imports are seen falling in 2011 as demand in Europe and Asia picks up and helps suck some cargoes away from U.S. shores. [Red & bold emphasis added.]
Russian energy company Gazprom has shipped 1 million tonnes of liquefied natural gas (LNG) to China, as the US gas market has an unfavourable pricing environment, says Alexander Medvedev, deputy chairman of Gazprom’s management committee and director general of OOO Gazprom Export.
- Shtokman LNG start up delay could end in cancellation
- Shale gas production reduces future US LNG demand
- May only go ahead as pipeline supply project to Europe
In a sign that the rise of U.S. unconventional gas production has changed global gas markets, Gazprom and partners on Friday said first Shtokman liquefied natural gas output had been pushed back from 2014 to 2017, citing "changes in the market situation and particularly in the LNG market."
Shtokman LNG, whose main target market is the United States, has had to adjust to a new reality in which the U.S. -- once considered to be big growth LNG market -- does not need incremental LNG supplies for the foreseeable future.
U.S. natural gas reserves are up by a third since 2006, thanks to unconventional gas development including shale gas, with estimated reserves sufficient to supply the U.S. market for nearly 100 years at current rates.
U.S. demand for imported gas is not set to grow long term. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Downeast LNG and Calais LNG are deluding themselves. Their projects have no future.
But this isn’t pure environmental altruism. A huge boom in the production of shale gas, which is released from rock by blasting a mixture of water and chemicals into tiny fractures, has created a supply glut in the U.S. that has edged Gazprom out of what it hoped would be an important new market for its shipments of liquefied natural gas.
Gazprom has already been forced to divert cargoes from its Sakhalin-2 LNG project from the U.S. to China and push back the startup of the huge Shtokman LNG project high in Russia’s Arctic because of the big and unexpected changes in the U.S. gas market shale gas has wrought. It is dreading the effect that a similar shale gas boom could have on its most important export market–Western Europe. [Red & yellow emphasis added.]
9 Feb 2010
Webmaster’s Comments: Save Passamaquoddy Bay does not oppose LNG projects in Maine; it opposes inappropriately-sited LNG projects in Passamaquoddy Bay.
For years, Southcentral rate-payers enjoyed the lowest natural gas prices in the nation. But those were different times, when the small local market was easy to supply as producers focused on making money from liquefied natural gas exports to Asia and feeding big industrial customers, like the now-shuttered Agrium fertilizer plant on the Kenai. As the Nikiski LNG plant's export license nears the end of its term -- March 2011 -- ConocoPhillips hasn't made a decision whether to seek federal renewal.
If sales were made to North America, and assuming the LNG is shipped from Valdez to an existing regasification plant in Baja California, there could be an additional 75 cents to $1 per mmbtus in transportation costs, Palmer said. LNG sold in Asia would be priced in parity with crude oil prices, which is the basis for most international LNG sales.
Webmaster’s Comments: LNG sells at a higher price in Asia than in the US.
"Given a growing natural gas surplus in northern British Columbia and declining natural gas prices across North America, the economics of exporting LNG continue to improve and we continue to work towards achieving significant project milestones as the year progresses." [Red & yellow emphasis added.]
Shale's impact felt around the world
[T]hese factors point to an oversupply of natural gas for the foreseeable future. [Red & yellow emphasis added.]
Natural gas prices fell 2% on Feb. 8 “despite a weather forecast calling for a second snow storm and blizzard-like conditions for the Northeast,” said analysts at Pritchard Capital Partners LLC in New Orleans. The weakness in gas futures prices is “due to continued concerns domestic shale production continues to increase and renewed concerns that the current natural gas price premium for Northeastern US markets over the UK price point may suggest LNG cargoes will be diverted from Europe to the US,” they said. Nevertheless, gas prices were up 1% in early trading Feb. 9.
Webmaster’s Comments: The LNG industry keeps hoping. Shale gas keeps dashing those hopes.
Webmaster’s Comments: Natural gas prices from low to even lower? In case Goldman Sachs, Credit Suisse, and Barclays Capital haven't seen it, the US Department of Energy indicates that LNG is more expensive than North American natural gas — at least it is in the Northeast. Adding more expensive natural gas from LNG would increase the cost of natural gas, not lower it.
If you are a company that invests in LNG, like Goldman Sachs, Credit Suisse, and Barclays Capital, it is in your best interests to dupe the public into believing LNG will reduce natural gas prices. Conflict of interest is still alive and well on Wall Street.
Russian gas export monopoly Gazprom warned of environmental risks from shale gas drilling in the United States and Europe today, but said it expected its gas to be able to compete with shale gas prices even if production expands.
8 Feb 2010
[A] chorus of Americans on the Maine side of the bay are slamming the two proposed LNG facilities, saying the projects will hurt the local economy, harm wildlife, drive down property values and destroy the "pristine" beauty of the area.
The letter, filed late last month by the group's lawyers, claims the LNG developments [would] adversely impact everything from tourism and the economy to the safety of wildlife. The group also raises concern about the lack of a nearby trauma hospital, should there be a "catastrophic" accident. The package filed by Save Passamaquoddy Bay-U.S. also includes individual protests from bay residents.
Gary Doer, Canada's recently appointed ambassador to Washington, stated in a letter to FERC that Ottawa is standing firm in its opposition to the movement of LNG tankers into the bay, which the Canadian government considers internal waters. [Red & yellow emphasis added.]
Attorneys representing the Province of New Brunswick have asked the US Federal Energy Regulatory Commission to deny a permit request by Calais LNG to build a 1 billion cubic foot per day receiving terminal and associated pipeline on the outskirts of Calais, Maine…. [Red & yellow emphasis added.]
We find the idea of allowing a tanker from Yemen filled with explosive gas into Boston Harbor terribly troubling, and urge Coast Guard officials to work out another way to unload the gas without allowing the tankers into Boston Harbor.
“There’s a twofold threat to local tourism if an LNG facility is sited in Mount Hope Bay,” said Preservation Society Board Chairman Pierre duPont Irving. “Temporary bridge closings will disrupt both motor coach and passenger vehicle traffic bringing visitors to Newport, and restricted access to Narragansett Bay will interfere with cruise ship operations,” he said.
“Heritage tourism is one of the region’s biggest employers, and a major contributor to the business tax base of Newport County and beyond,” said Preservation Society CEO and Executive Director Trudy Coxe. “The Preservation Society itself generates over 100 million dollars a year in regional economic activity, and that economic engine would be put at substantial risk by this proposed LNG facility,” she said.
Webmaster’s Comments: And yet, some LNG advocates scoff at the tourism economy.
What would happen if an LNG tanker is blocked from Boston Harbor due to security concerns?
[O]ur opposition to this terminal is rooted in logic and concern for the common good. Too often politicians are lambasted for ignoring their constituents and responding to the needs of wealthy corporations and special interests, but oddly The Journal is criticizing us for the exact opposite reason. We stand squarely with our constituents in opposition to this terminal, and no criticism from the media or other vested interests is going to weaken our resolve.
We oppose the siting of an LNG off loading facility in Mount Hope Bay because it [would] harm the environment, inhibit our access to the waterways and put our constituents in danger. We understand that natural gas heats our homes and powers our businesses but if a new facility is needed — and studies show that it is not — it should be sited in the ocean, not in the middle of a densely populated area at the end of an inland waterway.
Today our waterways are multi-use with commercial and recreational users coexisting easily. If this facility [were] built, the LNG tankers [would] have “first dibs” on the waterways — and that’s just wrong, particularly since Narragansett Bay and Mount Hope Bay are the people’s bays and not the exclusive property of a major corporation. [Red, yellow & bold emphasis added.]
Two options will be submitted for shipper assessment in the Alaska Pipeline Project open season. The first option is a pipeline from Alaska’s North Slope to Alberta, Canada, a distance of approximately 1,700 miles (2,737 kilometers), where the gas can be delivered on existing pipeline systems serving major North American markets. The second option would transport natural gas from the North Slope to Valdez, Alaska, a distance of approximately 800 miles (1,287 kilometers), where it would be converted to liquefied natural gas in a facility to be built by others and then delivered by ship to North American and international markets. Both options would provide opportunities for Alaska communities to acquire natural gas from the pipeline from a number of strategically located off-take connections.
5 Feb 2010
Gary Doer, Canada's recently appointed ambassador to Washington, stated in a letter this week to the U.S. Federal Energy Regulatory Commission that Ottawa is standing firm in its opposition to the movement of liquefied natural gas tankers into the bay.
"As was previously noted in the Draft Environmental Impact Statement issues by FERC for Downeast LNG, the passage of LNG tankers in this region requires the collaboration of the Government of Canada," he said, adding that such approval will not be given. [Red, yellow, bold & italic emphasis added.]
Webmaster’s Comments: For the nth time since 2005, Canada has officially informed FERC that LNG transits will not be allowed into Passamaquoddy Bay and have advised the LNG proponents to withdraw their applications. Meanwhile, the US Coast Guard officially requires the LNG applicants to obtain Canada's cooperation in order to transit LNG through Head Harbour Passage and Passamaquoddy Bay. This is not a Canadian requirement — it is a US Coast Guard requirement.
It has been abundantly clear for the past five years that Canada will not cooperate in providing safe and secure LNG transits through that waterway.
While Calais LNG and Downeast LNG — facilitated by a false claim by the US Department of State* — say they have UN Convention on the Law of the Sea (UNCLOS) innocent passage rights to transit through Canadian waters, the US Coast Guard requirement is something separate and in addition to that issue.
Quoddy Bay LNG and Downeast LNG have tried for five years to change Canada's position, and have failed. Calais LNG apparently does not recognize reality, even when it is staring them in the face. The United States is already drowning in 100-years' worth of domestic natural gas. US LNG import facilities are operating at less than 10% of capacity. Even if LNG imports double, that infrastructure would be operating at only 20% of capacity. Everett's LNG terminal and Northeast Gateway offshore LNG terminal have been running at an average of under 26% of capacity — there is more than plenty of room to handle additional imports.
There simply is no need for Calais LNG or Downeast LNG. The US Government knows that, and for the US Government to press Canada on this issue would be committing fraud against US taxpayers.
* UNCLOS clearly indicates that only participants in the UNCLOS treaty have rights under the treaty. Since the US is not a participant, it has no UNCLOS right of innocent passage.
In a letter to FERC Chairman Jon Wellinghoff responding to the recently filed application of Calais LNG, the new Canadian Ambassador to the United States, Gary Doer, reiterated the Canadian federal government's position that it will not permit LNG vessels to transit through Canadian waters in Passamaquoddy Bay or Head Harbour Passage. Ambassador Doer's letter notes that since U.S. federal agencies have concluded that LNG vessel traffic through these waterways requires collaboration with Canadian authorities and Canada will not permit these activities, FERC "may ... wish to advise project proponents that they should consider withdrawing their applications." [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The US Coast Guard requires the LNG developers to obtain Canada's approval. Canada says "no." Downeast LNG and Calais LNG are pipe dreams that are building false hopes and ill-will, and are needlessly wasting a lot of money.
Speaking to Platts LNG Daily, recently appointed FERC Commissioner John Norris indicated that the agency should focus on safety and environmental impacts in evaluating LNG terminal applications and allow the market to decide whether a facility is eventually built. Commissioner Norris also noted that FERC should not support one energy source at the expense of others, but rather encourage a diverse U.S. energy portfolio.
Webmaster’s Comments: FERC is not a safety-first agency — it ignores LNG industry terminal siting best safe practices, placing the LNG industry and the public in peril.
People in Atlantic Canada and even parts of the Northeastern States are just not worth as much money as people in larger consumption markets in the U.S. That's the cold logic of capitalism: avoid pissing off people who are more capable of amassing lawsuits and whose property values are too important an asset to reduce in value by surrounding it with dirty projects. One example of the pushing away of dirty energy from richer to poorer areas has been the successful opposition to proposed LNG terminals (explosive, habitat-wrecking) in New York State. This effective opposition by relatively richer communities pushed developers to the poorer Gateway region, in New Brunswick, Nova Scotia and Maine. [Red & bold emphasis added.]
The Coast Guard’s announcement came the same day Rhode Island Attorney General Patrick Lynch testified at a state Senate hearing, protesting Hess LNG LLC’s plans to develop an LNG offloading terminal in Mount Hope Bay.
Yemen’s first U.S. shipment of LNG arrived at Louisiana’s Sabine Pass LNG terminal on Jan. 31, Carlos Diaz, deputy chief spokesman for the U.S. Coast Guard, said in an e-mail message. [Red & yellow emphasis added.]
With the tankers all having to come into the harbor and to sail under the Tobin Bridge to their dockage on the Everett shore of the river, much of Charlestown, parts of Winthrop and Chelsea and Everett are put at severe risk, according to officials.
“This is not a new issue. It is a major problem. I am disappointed. This is the wrong decision. It puts the business interests of large corporations ahead of the security of Boston area residents. LNG tankers should not be passing through Boston Harbor. A long term strategy to fix this problem is what’s necessary,” said [Boston Mayor Menino].
Webmaster’s Comments: FERC, the LNG industry, and the US Coast Guard like to repeat that LNG shipping has had an exemplary safety record. That is true; however, history protects no one. 9/11 is the proof.
Liquefied natural gas shipments from Yemen, scheduled to pass through Boston Harbor on the way to Everett, have unnerved elected officials, who acknowledged Tuesday they are largely powerless to stop federal ratification of the deliveries.
Fall River — The law department, reaching full strength this week, plans to handle more cases in house – including LNG litigation – and expedite damage claims more rapidly, Corporation Counsel Steven Torres said.
“I’m an experienced environmental construction attorney,” he said, stating that the Boston law firm of Holland & Knight is now on a “task-by-task” basis handling the LNG litigation. “Holland & Knight will have a different role, but they will have a role,” he said. [Red emphasis added.]
Agreement reached on anti-LNG port resolution
Although the adoption of Ruggiero’s LNG resolution didn’t involve any initial discussion beyond the necessity for a few minor edits, a Somerset, Mass., selectman – Lorne Lawless – questioned the benefits of the resolution at this late stage of the federal permitting process. He also shared his views on the most effective way to fight the LNG facility proposed for Mt. Hope Bay.
[T]he Rhode Island Department of Environmental Management (RIDEM) has informed Weaver's Cove that it must obtain a RIDEM water quality certification and dredging permit prior to any construction activities associated with the Weaver's Cove LNG project. [Red emphasis added.]
Man-made island slated for off-shore Rockaway
The United States Coast Guard will deliver its Draft Environmental Impact Statement (DEIS) concerning the proposed Liquefied Natural Gas (LNG) terminal, that will be built about 15 miles off the shore of Far Rockaway, to interested agencies in the next few weeks, according to a spokesperson.
Cheatwood argued the Port of Lake Charles could lose about $65 million if Fontenot’s ruling is upheld, and that it will, in turn, “face serious obstacles in maintaining the ship channel.” He said the Sempra lease was needed to further the work of the port.
Tony Palmer, the vice president of TransCanada, told Alaskan lawmakers the open season suggested his project was more attractive than the rival Denali pipeline, Alaska's Juneau Empire newspaper reports.
If sales were made to North America, and assuming the LNG is shipped from Valdez to an existing regasification plant in Baja California, there could be an additional 75 cents to $1 per mmbtus in transportation costs, Palmer said. LNG sold in Asia would be priced in parity with crude oil prices, which is the basis for most international LNG sales.
Webmaster’s Comments: Selling LNG to Asia would be more profitable than selling LNG to the US via Mexico.
While the world will be coming to Vancouver for gold in 2010, Asia may be coming back to British Columbia in 2014 for liquefied natural gas. The destination will be Kitimat which is on track to open North America's second LNG export terminal. Pacific Trail Pipelines (PTP) is hoping to connect the terminal with the Spectra Energy pipeline in central B.C. The largest shareholder of PTP is Pacific Northern Gas Ltd. [Red & yellow emphasis added.]
Webmaster’s Comments: Actually, Kitimat LNG will be North America's third LNG export terminal; Freeport LNG is re-exporting LNG it has imported but cannot sell domestically as natural gas due to the overabundance of domestic natural gas.
Chinese gas players might be very excited at hearing the story that terminal is turned into LNG export from an originally proposed LNG import terminal. It could be another clear sign indicating fundamental changes of the landscape of the global gas market.
Video coverage of Rep. Schaufler's pro-LNG tirade is included.
Schaufler, who is chairman of the committee, also rails against those who are opposed to LNG, or pipelines, or getting back in the forest, or pulling water out of the Columbia for irrigation. And another thing: Schaufler warns that he’s not the guy to approach when it comes to proposing new taxes. “We have no one left to tax,” he says.
Webmaster’s Comments: This is one wrong-headed unhappy fellow.
Natural gas spot prices in the Northeast region continue to exhibit considerable strength, despite declines heading into last weekend. Prices in the Northeast posted the largest net gains since last Wednesday, in a week of considerable price variability. As another cold blast moved into the region, prices at several market locations in the Northeast posted gains ranging between $1.15 and $4.13 per MMBtu on Friday, January 29, with the largest increase occurring at the New York Citygate. Moderating temperatures since the weekend contributed to largely offsetting declines in trading on the following Monday, February 1. Ample supplies, including increased LNG sendout, as reported by Bentek Energy, during the weekend, likely mitigated the extent of these price runups. Net gains in the region since last Wednesday ranged between 1 and 10 percent, following gains in trading on Wednesday, February 3 on reports of a new cold front moving in over the weekend.
Webmaster’s Comments: There is no shortage of natural gas. The US is drowning in it.
The U.S Natural Gas sector is "domestic", we import what Mr. would refer to as a "nat on the elephants ass" in LNG, as we simply don't need it. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The US is swimming in domestic natural gas. Downeast LNG and Calais LNG are chasing their tails.
LNG, along with the shale gale, should help keep natural gas prices low for a long time. The average wellhead price for natural gas in the United States had crept to $8 per thousand cubic feet in 2008. There is little doubt that high energy prices were among the contributing factors to the economic downturn that began in the latter half of 2008. An ocean of cheap gas augurs well for America’s and the global economy’s future.
[S]table, lower long-term gas prices brought on by the shale gale and the emerging LNG market will ensure that coal’s pricing advantage is not so pronounced. Gas is well positioned to help meet that increase.
Webmaster’s Comments: "Emerging LNG market"? The market for LNG in the US is hardly "emerging." It is nearly at a standstill. While LNG imports in the future might increase, there is no prospect that existing and permitted LNG import infrastructure will be used to capacity.
The background is the latest dramatic changes in the gas prices and the shift in the US gas marked from import of LNG to more development of shale gas, as reported by BarentsObserver last week. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The ocean of domestic natural gas in the US, and the new LNG liquefaction facilities that have recently come online may have killed this LNG project that targeted the US as its market.
The US is drowning in its own domestic natural gas. There is no longer a large market for imported LNG.
3 Feb 2010
SAINT JOHN - Saying he felt "a little blindsided," Mayor Ivan Court reacted with disappointment on Tuesday to the announcement that Irving Oil Ltd. would not build its world headquarters at Long Wharf.
And while he has blamed Irving Oil in the past for shortchanging the city - most notably on the amount it pays for municipal water and the special tax exemption for its liquefied natural gas terminal - Court was diplomatic after the most recent announcement.
Coast Guard vows to bolster security; Angry Menino sees risk of LNG terror
News video is also available.
The decision, which means LNG ships could begin arriving in Everett later this month, drew immediate condemnation from Mayor Thomas M. Menino, a longtime critic of allowing LNG shipments through the harbor. He accused the Coast Guard of putting profits ahead of people.
“This is all about helping a commercial enterprise,’’ Menino said in an interview. “I’m about helping protect people’s property and lives. They’re saying they will be as safe as any other LNG ship. I say they’ll be as unsafe as any other LNG ship.’’
Distrigas has signed a 20-year contract with a Yemeni supplier and expects to bring in up to 30 shipments a year to its Everett facility. The imminent delivery would be only the second from Yemen to the United States. A tanker carrying Yemeni LNG arrived earlier this week in less-populous Sabine, Texas, according to John Healey, Coast Guard captain of the port of Boston, who said the Coast Guard spent a year reviewing security plans for the Yemeni shipments. [Red & yellow emphasis added.]
Boston — Liquefied natural gas shipments from Yemen, scheduled to pass through Boston Harbor on the way to Everett, have unnerved elected officials, who acknowledged Tuesday they are largely powerless to stop federal ratification of the deliveries.
“It is unreasonable and unsafe to continually put the interests of large corporations ahead of the security of Boston area residents and it is time to solve this problem once and for all,” Menino said. “Extra security alone is not a proper solution and it is the duty of the Department of Homeland Security, Department of Energy and the Federal Energy Regulatory Commission, to develop a long-term strategy that will significantly limit, if not eliminate, the need for LNG tankers to travel through Boston Harbor.” [Red, yellow & bold emphasis added.]
Webmaster’s Comments: There are many residences less than ¼-mile from the LNG tanker route, within federally-defined Hazard Zone 1. That Hazard Zone indicates likely total destruction to life within it, should an LNG release occur there.
“It is the duty of the Department of Homeland Security, Department of Energy and the Federal Energy Regulatory Commission, to develop a long-term strategy that will significantly limit, if not eliminate, the need for LNG tankers to travel through Boston Harbor,” Menino said in the statement.
Webmaster’s Comments: The LNG terminal in Everett violates LNG industry terminal siting best safe practices, due in part to the LNG ship transit proximity to civilian populations.
As the Coast Guard announced the completion of a security plan to allow shipments to safely approach the densely populated local area around the LNG offloading terminal in Everett, House Speaker Robert A. DeLeo vowed to enlist members of Congress to explore “other options” to stop the shipments and Boston Mayor Thomas M. Menino blasted the Coast Guard’s decision.
News video is also available.
"In these days in a post-9/11 era, we have made our best efforts, often times, and found that those efforts are not good enough. I am just concerned that even though we have our best and brightest people thinking about this it won't be enough and something could happen," Ash said.
Healey, captain of the port, declined to give details of the security measures but said he will decide on a case-by-case basis whether to allow each ship to continue to an offloading area in densely populated Everett, Mass.
About 30 shipments from Yemen to Boston are expected annually during a 20-year contract with the company. [Red & yellow emphasis added.]
It's the first time that shipments from the LNG plant located at Balhaf, on the eastern coast of Yemen, will be delivered to Boston. The first shipment to the United States from the plant operated by French energy giant GDF Suez arrived near Sabine, Texas, over the weekend, Healey said.
House Speaker Robert DeLeo said he was pleased overall with the plans, but is considering whether lawmakers need to do more. “Can I say today definitively that everything’s OK and let’s move forward?” he asked. “No. I still want to go out and make sure that every possible safety method has been used.”
News video is also available.
"It is unreasonable and unsafe to continually put the interests of large corporations ahead of the security of Boston area residents, and it is time to solve this problem once and for all," Menino said in a statement. "Extra security alone is not a proper solution."
The first tankers are expected to arrive this month at a terminal in Everett, Mass., a densely populated city across the harbor from Boston and surrounded by equally packed communities, the Boston Herald reports.
Lynch said the project was developed only in a "knee-jerk reaction" to the demise of a proposed facility on the Fall River waterfront. The floating terminal would threaten public safety in Rhode Island and harm the state's economy, he said. He specifically referred to the projected high cost for state and local authorities to maintain security around 900-foot tankers traveling up Narragansett and Mount Hope bays to supply the terminal.
"We have 26 miles in a tightly confined waterway.That has to cut through 15 different communities," said Lynch, a longstanding critic of the LNG plans. "The burden put upon the state and cities and towns is enormous financially."
It is Weaver's Cove's latest version of a plan to build an LNG facility in the region. The first proposal, for the land-based terminal in Fall River, was dropped after Massachusetts legislators blocked demolition of the old Brightman Street Bridge, which is improperly aligned to accommodate tankers. [Red & yellow emphasis added.]
Webmaster’s Comments: AES Dominicana owns the AES Andres LNG import terminal located 35 kilometers / 21 miles east of Santo Domingo.
Last year, House Bill 3058 failed in the Oregon Senate, but managed to make a name for several legislators as allies of the controversial liquefied natural gas industry. Dubbed the LNG fast-track bill by environmentalists and landowners, it would have speeded up the process by which LNG companies and other corporations apply for permits to begin environmentally destructive work on private land.
HB 3058 went down in flames, but not before The Oregonian published an investigation of the gas industry's power in politics, reporting that Northwest Natural donated $210,000 to political candidates since the beginning of 2008. With the Legislature poised to take up a new version of the LNG fast-track Bill this month, it's time to ask just how long the gas industry will be allowed to guide Oregon politics. [Red & yellow emphasis added.]
Last week U.S. District Court Judge Michael Mosman adopted the recommendations of a federal magistrate in resolving a dispute between Oregon LNG and the Port of Astoria. The opinion, available in the PACER system under Docket No. CV 09-847-JE, concludes that Oregon LNG properly exercised its option to extend a sublease with the Port of Astoria, which must now extend the underlying lease from the State.
An analysis published by NASDAQ concludes that the increased availability of natural gas from U.S. shale plays is discouraging LNG project developers from building new regasification terminals, even if the projects have been approved by U.S. regulators. [Red & yellow emphasis added.]
2 Feb 2010
Energy: Government files motion with U.S. energy regulator outlining reasons why Calais LNG proposal should be rejected
"It must also be recognized that the Canadian federal government has issued an unequivocal ban on the transit of LNG vessels through Head Harbour Passage because such tanker traffic presents unacceptable environmental and navigational risks to New Brunswick and its inhabitants," states the letter.
[A]ccording to [Calais LNG's development manager Arthur Gelber], many people in St. Stephen - on the New Brunswick side of the border - are "very excited" about the jobs and economic spinoffs the Calais project [would] bring to the area.
Dean Girdis, president of Downeast LNG (the other Maine LNG project before FERC), has said the Graham government's take on LNG development reeks of hypocrisy. Girdis said the province unfairly supports the LNG terminal in Saint John - all while vehemently opposing proposed LNG projects in Maine. [Red, yellow & bold emphasis added.]
Earth to Calais LNG's Art Gelber:
Canadians nearly unanymously oppose your projects. Saying otherwise doesn't change the facts.
Earth to Downeast LNG's Dean Girdis:
- Downeast LNG violates LNG industry terminal siting best safe practices:
- Downeast LNG would put thousands of civilians within federally-defined 2.2-mile-radius LNG ship Hazard Zones (Canaport is 5 miles from Saint John);
- Downeast LNG would be up a long, inland waterway with numerous navigational hazards, not on the open water and a straight shot to port from the open Bay of Fundy like Canaport;
- Downeast LNG would conflict with other uses of the waterway;
- Downeast LNG would engulf the "Bar Harbor" of New Brunswick (St. Andrews) in Hazard Zones negatively impacting the local, provincial, and state economy.
The hypocrisy all belongs to Dean Girdis.
Leaders in Fredericton and Ottawa have drawn a firm but reasonable line to protect the lives and economic interests of Charlotte County residents. They must persevere. If the situation were reversed, we have no doubt that U.S. state authorities would take a similar stand.
While the United States has the right to proceed as it wishes in internal regulatory affairs, the U.S. Coast Guard has observed that Canadian approval and co-operation would be necessary to ensure safe passage of gas tankers.
The Canadian government has all the authority it needs to refuse, and has signalled that it will refuse. That leaves both LNG terminal proposals dead in the water. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The two cogent points are:
- The US Coast Guard Captain of the Port's Letter of Recommendation for the Downeast LNG project requires Downeast LNG obtain Canada's cooperation for safe and secure transits in both Canadian and US waters; and
- Congress gives the Coast Guard the authority to deny or approve LNG transits in Head Harbour Passage and Passamaquoddy Bay. Since the US claims the authority to prevent LNG transits, then Canada has an equal right to do the same — and it has made its decision. LNG transits are prohibited.
Fate is staring Downeast LNG and Calais LNG squarely in the face, telling them for years to move to different locations outside of Passamaquoddy Bay — where the projects could then abide by LNG industry terminal siting best practices, and where they would be out of Canadian waters and Canadian authority. So why won't they do it?
Downeast LNG and Calais LNG know their projects will fail no matter where they are located, because there simply is no need: there is a 100-year supply of domestic natural gas in North America, mooting need for additional LNG import infrastructure. Downeast LNG and Calais LNG developers are simply using up their investors' money, continuing to rake in good pay until it is used up.
ST. STEPHEN – Prime Minister Stephen Harper has confirmed Canada’s opposition to allowing LNG tankers to use Head Harbour Passage and Passamaquoddy Bay to reach proposed liquefied natural gas terminal in Maine.
New Brunswick Premier Shawn Graham, who also attended the ceremonies Friday, Jan. 8, said he did not see any change in the ongoing opposition of the federal government toward allowing LNG tankers to sail through sovereign waters.
“Last year we invested close to $500,000 in engaging the best legal expertise to make sure the concerns of New Brunswickers were addressed through the FERC process,” the premier said. [Red, yellow & bold emphasis added.]
"We're looking at all departments -- we don't know where it's going to end up but it could very well be a cut in services and personnel. I feel that outside of dispatch, if you reduce your police and your fire departments, that could have an impact on the Calais LNG project in the future as far as what they're looking for -- for protection," she said.
Webmaster’s Comments: The City of Calais apparently believes Calais LNG will not foot the bill for the additional security and emergency services (and all that entails) that the project would require of the City.
The plant will tap into the nearby Maritimes & Northeast Pipeline that travels through the selected parcel of land in the business park. The facility will then liquefy the natural gas collected and purify it in order to transport it by truck.
"The security measures are going to be put in place by the company and validated by us when each vessel arrives," Halvorson said. "The captain of the port will then decide whether to allow or deny (the ship) entry or take more extensive inspection measures than we normally would."
Boston Mayor Thomas Menino, and officials from other communities near the Harbor, had urged the Coast Guard to reject the plan, particularly in light of the failed Christmas Day attempt by a Nigerian man trained in Yemen to blow up a US airliner in Detroit.
The need for gas imports in the US has declined substantially since construction of the terminal began due to increased domestic production of unconventional natural gas and the recession, said Attiyah. [Red & yellow emphasis added.]
The plans filed Friday include details for two options, one that would result in a pipeline through Canada and another that would reach Valdez for export by vessel. Palmer estimates a pipeline could be operating in a decade.
“I think it almost makes a case for [exporting] liquefied natural gas,” [Rep. Scott Kawasaki, D-Fairbanks,] said of the lower cost estimate. The line through Canada would cost between $32 billion and $41 billion, according to the filings.
It is my belief that AGIA is dead, given the shale gas production Outside and in Canada. Exxon spent $41B buying the company with the largest shale gas holdings in the U.S. One also has to remember that Exxon is committed to a 25 year commitment with Qattar to bring gas to the U.S. The expansion of LNG terminals in the U.S. to 4.5bcf is an interesting number, as that was the planned capacity of big diameter pipelines from Alaska to Canada to the U.S. Any introduction of Alaska gas at that rate would have a depressing effect on the price of natural gas in the region in which it is introduced. [Red & yellow emphasis added.]
…Apache Canada president Tim Wall said LNG is a much-needed escape valve from what many are seeing as an oversupplied North American market, which is in turn resulting in lower prices for producers. [Red & yellow emphasis added.]
Five years after energy developers started sniffing around Oregon as a likely spot to build an import terminal for liquefied natural gas, the air has come flooding out of the gas market like a whoopee cushion, making such proposals sound economically reckless.
[E]xisting U.S. LNG import terminals are operating at a fraction of their capacity. New terminals, including one in Mexico's Baja California, are sitting virtually idle. And the forecast for U.S. gas production and reserves is robust, thanks to new drilling techniques that allow producers to tap unconventional reserves.
"I don't see it at all," said Andrew Flower, a United Kingdom-based LNG consultant who follows industry facilities around the world. "I don't see how these projects work or where the need is for them. I'm amazed at the tenacity of some of these people who are still pushing forward." [Red & yellow emphasis added.]
Natural Gas Technologies. The Natural Gas Technologies program develops technologies to explore the recovery potential of natural gas from methane hydrate resources and their potential environmental impacts. In FY 2011, the Office of Science will initiate a new research program in gas hydrates. Therefore, no funding is requested in the Fossil Energy budget. [Red emphasis added.]
Webmaster’s Comments: Methane hydrate is yet another source of domestic natural gas, mooting need for additional LNG import infrastructure.
In recent years … an influx of U.S. gas supplies from vast, deeply buried onshore shale-rock has sharply reduced the demand for imports of foreign gas. U.S. gas prices have tumbled more than 60% from highs near $14 a million British thermal units seen in the summer of 2008, making the prospect of exporting LNG to the U.S. less compelling for overseas companies that can fetch higher prices for their shipments elsewhere.
The Federal Energy Regulatory Commission has approved the construction of more than two dozen new LNG terminals or expansions of existing terminals, but most of the projects are on hold, awaiting more favorable market conditions.
Many LNG projects along the Gulf Coast are likely to be shelved because of supplies from shale formations in the region, but terminals proposed for the East and West coasts stand a better chance of completion if they can overcome local opposition, said Dean Girdis, president and founder of Downeast LNG, which aims to build a $400 million LNG terminal in Maine. The terminal is awaiting FERC approval. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Downeast LNG's Dean Girdis is his project's worst enemy. If he merely moved outside of Passamaquoddy Bay his project could then comply with LNG industry terminal siting best safe practices, while also resolving Canada's LNG transit prohibition. Girdis has known this since 2005, but he continues to thumb his nose at Canada rather than make his project workable. Girdis is reaping what he has sown — utter failure.
The past few years have seen a “revolution” in the outlook for natural gas supply. Until recently, experts thought that the United States would become increasingly dependent on expensive imports of liquefied natural gas (LNG) from overseas, but the recent boom in domestic “unconventional” gas production (driven by shale gas) and the dramatically increased estimate of U.S. gas reserves have led to projections of increasing domestic natural gas production and declining imports. [Red & yellow emphasis added.]
While the Pacific basin may be well supplied with LNG, some of the Atlantic basin projects – in Venezuela, Nigeria, Trinidad and Tobago, Algeria, Egypt, Libya and Brazil – are unlikely to add much to supply flows, for various reasons, not least because the country that was recently considered the prime Atlantic basin off-taker, the US, is no longer so attractive. [Red & yellow emphasis added.]
Five years ago the United States was planning on building new terminals for importing liquefied natural gas. But now some industry experts expect the United States to become a natural gas exporter. The heady predictions that Qatar and Russia would become major exporters to the United States have to be revised. Russia's huge investment in the Shtokman field in the Barents Sea was predicated on exporting gas to the United States, and suddenly that market may no longer exist. [Red & yellow emphasis added.]
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