"For much of the state of Maine, the environment is the economy"
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— LNG import bubble has burst —
30 September 2010
Chevron has requested authorisation to re-export foreign-sourced liquefied natural gas from the Sabine Pass terminal in Louisiana, according to a filing earlier this month with the US Department of Energy.
It has become a key strategy for some U.S. terminals - built before the boom in domestic shale gas production - that would otherwise sit idle for much of the year because low US gas prices and weak demand deter shippers from sending much gas there.
The Freeport terminal in Texas also has approval to re-export LNG and Sempra's Cameron terminal in Louisiana has recently applied for a license. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: More exporting LNG instead of importing.
At full operation, Golden Pass will be able to import 15.6 million tonnes/year, according to the project’s web site, and be able to deliver the equivalent of 2 bcfd of natural gas. The terminal is a joint venture of Qatar Petroleum International 70%, ExxonMobil 17.6%, and ConocoPhillips 12.4%.
This will likely be the last LNG terminal built in the Lower 48 for some time, given the low prices offered here compared with LNG markets in Europe and Asia and the growth of US gas reserves thanks to shale gas development. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Are Calais LNG and Downeast LNG paying attention?
Net U.S. imports of natural gas reached the lowest level seen since 1994, or 12 percent of total consumption, as the surge in shale gas activity continues to push gas production in the U.S. Lower 48 states, the U.S. Energy Information Administration (EIA) reported this week. [Red & bold emphasis added.]
In a report released this week, Barclays Capital analysts wrote that they do not expect overall U.S. imports of LNG to increase in 2011 as compared to 2010 imports. The report states that the expected price spreads between the United States and other LNG markets around the world are likely to discourage any increase in LNG imports to the U.S. market. [Red emphasis added.]
Phillip Ribbeck, Repsol Energy North America president, says his company is currently responding to requests for proposals and it's too early to tell whether it will be able to put up to 800 million cubic feet of natural gas per day this winter on the market - twice the amount last winter.
"We would like to do so, but we can't put more gas in the marketplace than the market's going to demand," Ribbeck said in a phone interview Wednesday, about a year after his firm's liquefied natural gas facility began operations in Saint John.
Webmaster’s Comments: Canaport LNG has apparently been operating at below half capacity — additional evidence that the Maine and Northeast market is being well satisfied with existing infrastructure. Plus, there are over 30 new pipeline and pipeline expansion projects to deliver Marcellus natural gas to the Northeast.
LNG ships are among the fastest and largest vessels afloat, he explained. In the case of whales, it is speed that kills. Slowing vessels by just a few knots dramatically increases the whales' chances of surviving or avoiding a collision.
As part of an agreement to lessen their potential impact on whales, the gas companies funded an automatic alert system that includes the placement of 10 acoustic buoys in the shipping lanes that run through the sanctuary. Computers in the buoys are programmed to recognize a distinctive sequence of sounds that the right whales use to signal the desire to gather. These "up" calls do not travel farther than five miles, which means the whales are relatively close to the buoys.
What Wiley and others at the sanctuary are hoping to do is leverage this system into one that will alert all ships in the area. Thanks to a federal law that requires all vessels over 300 tons, or that carry more than 150 passengers, to use a device that broadcasts a signal containing its location, identification and other information at two-second intervals, scientists can pinpoint every large vessel operating close to shore and close to whales.
[S]ome of the largest price decreases during the report week occurred in Northeast markets, where cooler weather prevailed. Market prices posted decreases of as much as 7 percent on the week. For delivery in Zone 6 into New York off Transcontinental Gas Pipeline (Transco), the price on Wednesday, September 29, reached $4.09 per MMBtu, a decrease of 29 cents, or almost 7 percent, from the start of the report week. Trading at the Intercontinental Exchange, Inc. (ICE), continues to suggest that a much lower price spread between the Northeast and the Henry Hub is developing. The price for deliveries to Transco Zone 6 in January 2011, for example, is currently priced about $2.02 per MMBtu over the Henry Hub price in ICE trading, while last year at this time the premium was about $3.42. This lower differential is likely because of more supply options for the region, including growing supplies in the Marcellus Shale, access to Rockies supplies, and regasified liquefied natural gas (LNG) from the Canaport LNG terminal in Canada.
- The U.S. Coast Guard issued a report to the Federal Energy Regulatory Commission concerning the waterways associated with the Calais LNG terminal near Calais, Maine. Calais LNG proposes to build a 1 Bcf/d receiving terminal and associated pipeline on 2,800 feet of shoreline along the banks of the St. Croix River and Passamoquoddy Bay. The Coast Guard was tasked with assessing safety and security issues associated with LNG tankers traveling through these waterways. The Coast Guard reported that provided certain safety and security actions are taken as part of the permit, the waterways are suitable for LNG tankers. Official notification from Calais LNG of their proposal to build an LNG terminal near Calais was given to the Coast Guard in May 2008. The Canadian Federal Government has said that it will not allow LNG tankers to pass through Canadian territorial waters in the Head Harbour Passage; until such permission is granted, tankers will be unable to reach the facility.
[Kent Harrington, a Savannah resident who has experience in crisis management,] detailed a 2002 LNG trucking accident in Tivissa, Spain, in which a tanker carrying 12,000 gallons of LNG overturned and caught fire on a mountainous road. The fire produced what’s technically called a boiling liquid expanding vapor explosion, killing the driver and severely burning two people who were more than two football fields away. The truck’s diesel engine was blown 842 feet away; fragments of the tank flew 150 to 400 feet.
Webmaster’s Comments: Heating LNG in its containment can cause the LNG to regasify — expanding 600 times its liquefied volume, creating the "boiling liquid expanding vapor explosion."
Calais LNG says it plans to truck LNG from its proposed terminal to locations around the State of Maine.
"I have the copies of the agreement and I'll quote," Felser says. Reading from the document, he continues, "'We have been assured by representatives of the El Paso company that no LNG shipments will be made on the streets of Savannah.'" [Red emphasis added.]
Savannah resident Virginia Mobley drew on her knowledge of disaster response and educated the crowd about the recommended response to an LNG spill and fire. Reading from the federally-produced Emergency Response Guidebook on hazardous materials, she said: "If a tanker truck is involved in a fire, isolate one mile in all directions. Consider evacuating one mile in all directions."
Savannah officials say they were surprised by the company's trucking request, in part because when the Elba facility re-opened in 2001, city leaders thought they had exacted a promise not to truck LNG through the city.
Southeast LNG president Bruce Hughes says now that wasn't a forever pledge. [Red & brown emphasis added.]
Webmaster’s Comments: Holding an LNG developer to his promises could be difficult and expensive.
The city has hired a consultant to advise the Savannah City Council on the Federal Energy Regulatory Commission process and provide technical detail on the proposal. The consultant will make a presentation at the [Oct. 7] meeting. The public is invited to offer input. Savannah City Council will also be attending.
Prices for delivered LNG rose to 50,233 yen ($602) a metric ton, according to data from the Ministry of Finance. That’s equivalent to about $11.43 per million British thermal units, more than twice the price of U.S. benchmark gas futures at Henry Hub, data compiled by Bloomberg showed.
Webmaster’s Comments: Japan is paying twice the price of the US for LNG imports. The US has a 100-year natural gas glut. Where is the LNG going to go? To Japan and elsewhere.
New and unpermitted (even those already permitted) US LNG import terminal projects, like Calais LNG and Downeast LNG, would have a very difficult time surviving, as is being evidenced by current LNG imports and LNG exports from the lower 48 states.
29 September 2010
Webmaster’s Comments: Importing LNG instead of using our vast domestic natural gas resource makes the US economically weaker, reduces domestic employment, and reduces US energy security. [Bold red emphasis added.]
Net U.S. imports of natural gas reached the lowest level seen since 1994, or 12 percent of total consumption, as the surge in shale gas activity continues to push gas production in the U.S. Lower 48 states, the U.S. Energy Information Administration (EIA) reported this week.
With the increase in natural gas production, import and export prices were both more than 50 percent lower in 2009. Monthly average prices peaked in January and then declined significantly during the year to the lowest prices seen in the natural gas market since 2002. [Bold red emphasis added.]
Platts LNG Daily reports that two natural gas industry officials, speaking earlier this week at a conference in Boston, said that they expect LNG imports to remain an important component of the energy supply for the U.S. Northeast. Industry consultant David Palmerton noted that despite increased domestic natural gas supplies from shale gas plays, LNG supplies are critical to the region during cold weather.
Webmaster’s Comments: LNG imports are important to the Northeast; however, building additional LNG import infrastructure would be gross overkill. The Distrigas LNG import terminal at Everett, Massachusetts is steadily operating at around 50% capacity, indicating that domestic natural gas has not yet impacted that operation. On the other hand, the two new terminals offshore from Gloucester, Massachusetts, as well as the average of all other LNG import terminals in the US, are operating at a mere 10% of capacity. Northeast demand is already being more than adequately satisfied.
US LNG import terminals are sending out natural gas in volume equal to the capacity of merely one single LNG import facility — around 1 billion cubic feet per day. Existing capacity is 10 times that amount, and there are over 10 additional LNG import terminals already permitted, but not constructing due to lack of need.
Bipartisan legislation sponsored by Senators Sean Kean and Bob Gordon that would ban the construction of liquefied natural gas (LNG) transfer stations off the coast of New Jersey cleared the Senate Environment and Energy Committee last week.
“When you add in New Jersey’s ecological diversity off the coast, and the importance of our shore region to the State’s tourism economy, it becomes even clearer. We cannot put New Jersey lives, property, tourism and environmental quality at risk for the low-yield benefit of LNG facilities in our coastal waters.”
[FERC] is considering a request from Southern LNG, which operates a natural gas terminal on Elba Island. The company hopes to start an LNG trucking operation, beginning with 10 vehicles, but building up to 58 trucks a day. It plans to run the vehicles south down the Truman Parkway, then west via DeRenne Avenue - one of Savannah's most congested thoroughfares.
As to the repeated claim that LNG is "clean," while it may be true relative to coal, it is false overall. The LNG production and transport process is energy intensive, and the net impact on the environment per unit of energy produced by LNG is far greater than other energy sources, especially when compared to nuclear or renewables.
Mr. Hughes statement that LNG will "reduce our dependence on oil" is absolutely ridiculous, as we are simply exchanging dependence on foreign oil for dependence on foreign LNG, obtained from the same limited, unfriendly and politically unstable sources.
SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy (DOE) gives notice of receipt of an application, filed on September 2, 2010, by Sempra LNG Marketing, LLC (Sempra), requesting blanket authorization to export up to a total of 250 billion cubic feet (Bcf) of foreign sourced liquefied natural gas (LNG) for a two-year period commencing on February 1, 2011. The LNG would be exported from the Cameron LNG Terminal (Cameron Terminal) owned by Sempra's affiliate, Cameron LNG, LLC, in Cameron Parish, Louisiana to any country with the capacity to import LNG via ocean-going carrier and with which trade is not prohibited by U.S. law or policy, over a two-year period commencing on the date of the authorization. [Red bold emphasis added.]
"While fuel diversification is an important element of a sound energy policy for Jamaica, the development of the LNG project has not reached the stage where there is sufficient specificity for JPS to provide substantive comments at this time," said Winsome Callum, the company's head of corporate communications.
BMI View: Low gas prices resulting from booming unconventional US production raise doubts over the economics of the planned Denali gas pipeline. Its Exxon-led rival benefits from the potential to convert to an LNG export project. [Red & bold emphasis added.]
TransCanada and Denali have each put forth plans to deliver about 4.5 billion cubic feet of gas per day to North American markets by larger lines to Canada; each aims to be in service by about 2020. Denali has estimated its project will cost $35 billion, while TransCanada has put its figure at $32 billion to $41 billion. TransCanada also has offered a shorter, cheaper option: a $20 billion to $26 billion line that would lead to a liquefied natural gas facility that could export fuel by ship.
"Energy is an essential part of America's economic stability and that is where the gas line comes into play, bringing more than $10 billion worth of domestic natural gas a year to the Lower-48 states at projected future prices," [said President Obama].
When ConocoPhillips' open season ends on Monday, McLemore said the firm would consider bids from potential shippers, plus the long-term outlook for gas prices, supply forecasts and Alaska tax policy before deciding whether to continue. [Red, yellow & bold emphasis added.]
28 September 2010
In 2009, net U.S. imports of natural gas were the lowest since 1994, representing just 12 percent of total consumption. The primary underlying cause for the lower level of net imports was continued strong levels of natural gas production in the lower 48 States.
With the increase in natural gas production, import and export prices were both more than 50 percent lower in 2009. Monthly average prices peaked in January and then declined significantly during the year to the lowest prices seen in the natural gas market since 2002. [Red & bold emphasis added.]
Yesterday I did this post on how the glut of natural gas in the United States has depressed prices to the point that LNG terminal operators are hoping to start exporting rather than importing gas. [Bold red emphasis added.]
In response to the Coast Guard's recommendation, U.S. Senator Olympia Snowe stated, "Increasing maritime transport and natural gas supplies are critical to Washington County's economic future, and I appreciate the Coast Guard's deliberative analysis of the safety and security issues associated with LNG tankers transiting the Passamaquoddy Bay and the St. Croix River. The development of an LNG facility is a crucial issue for the communities of Washington County, and I will continue to work to ensure that the federal agencies continue to engage in a deliberative permitting process with the individuals most affected by this decision." [Bold red emphasis added.]
Webmaster’s Comments: Homeland Security resulted in the Coast Guard requiring Calais LNG to obtain Government of Canada cooperation for safe and secure transits in the US and Canadian waterway. Calais LNG is stymied by the Coast Guard requirements — and Sen. Olympia Snowe agrees with it, even while she talks out of both sides of her mouth.
"Calais LNG chose to fast track this application. It then chose to seek to postpone this proceeding when it failed to provide adequate responses to issues with its applications identified by the DEP and other state agencies and again when its financial backing dried up. It unilaterally chose a new deadline of September 11, 2010, to find new financing and has failed to meet that deadline."
Documents show Southern LNG's failure to contact city officials; consider impacts of DeRenne route.
During negotiations with the City of Savannah back at the turn of the millennium, the company gave its assurances that no LNG would be shipped through the streets of Savannah, and would be shipped exclusively via pipeline to customers north and west of here.
As contentious as the truck route is, it’s actually the one component of the proposed project that isn’t regulated by FERC. Southern LNG’s application deals strictly with the changes to the Elba facility itself.
Webmaster’s Comments: Once the LNG terminal became established, having promised the city not to truck LNG through the city, Southern LNG at Elba Island is planning on trucking LNG on the road with the greatest number of accidents per mile driven in the Savannah area.
PORT ARTHUR, Texas, Sept. 28 -- /PRNewswire-USNewswire/ - The Golden Pass LNG terminal announced today that the first cargo to be used for commissioning the facilities is anticipated to arrive during October 2010. This terminal is a joint venture owned 70% by Qatar Petroleum International (QPI), the international arm of Qatar Petroleum (QP), and the remaining by ExxonMobil and ConocoPhillips.
The Golden Pass LNG terminal will have the capacity to deliver the equivalent of 2 billion cubic feet per day of natural gas when it reaches full operation. This represents enough natural gas to meet the average daily needs of about 10 million U.S. households.
27 September 2010
There has been a marked increase in natural gas production in the continental US with improvements to drilling and recovering techniques that have tapped the vast shale plays across the nation. The Marcellus Shale play in northeastern US is estimated to be the second largest natural gas field in the world.
Because of the increased natural gas production – and the great possibility for more production – the US may become a natural gas exporter, via LNG. Three LNG receiving terminals have already petitioned the US government to be able to switch to export. [Bold red emphasis added.]
“It is vital that we take steps today to protect New Jersey’s largest industry, tourism, from the type of environmental disaster that took place this summer in the Gulf of Mexico,” Kean (R-Monmouth) began. “This bill merely continues our long-standing opposition to oil and natural gas exploration off the coast of this state. Furthermore, there is an abundance of natural gas available in the United State and we should develop those resources before we ship any more money overseas.” [Bold red emphasis added.]
Only a few years ago various forecasts said the US would need to import considerable amounts of gas as LNG, but with the development of shale gas, the US now is becoming self-sufficient in gas and may even become a gas exporter. [Bold red emphasis added.]
The biggest problem isn’t how to import more gas but what to do with the growing oversupply. In 2009 record output from shale-gas plays enable the US to unseat Russia as the world’s top producer. [Bold red emphasis added.]
"A lot of people ask, if this is such a good idea, why hasn't it already been done? There are two major reasons: The first is the sudden technology change in unconventional gas production," he said. "The other is the fact that the market for LNG globally has really grown." [Red & bold emphasis added.]
Webmaster’s Comments: Now that the US is natural gas independent, the market for LNG is Asia and Europe.
Natural gas fetches considerably higher prices in Europe and Asia than it does in North America, which is flush with the commodity thanks to drilling in emerging shale gas formations, said Ralph Glass, vice-president of operations at AJM Petroleum Consultants in Calgary. [Bold red emphasis added.]
I see production increasing almost every day. There are a lot of dynamics — words being bandied around by pundits like "the shale revolution" and the "technology shock." There are definitely people on the speaking circuit talking about this, and it's really all true. We're seeing production increase almost every day.
This will mitigate [price] spikes. We're seeing lower prices—we haven't seen prices at this level for a while—and a lot less volatility, reflected in the implied volatility in the options market. And even in the daily and monthly price movements themselves.
One thing that people fail to consider is that a few years back, people thought we'd run out of reserves for gas, and there was a big build-out for LNG. The aftereffect of that was that they had to build liquefaction capacity, where they take the gas, liquefy it, ship it out and then re-gassify it. So this infrastructure was built and never used. There's a tremendous amount of idle infrastructure. [Bold red emphasis added.]
"The most probable security regime should consist of a mix of U.S. and Canadian federal, state/provincial, and local law enforcement, which may require cost-sharing arrangements, as outlined in the Energy Policy Act of 2005. As mentioned previously, a major portion of the vessels’ route is initially through Canadian waters. Calais LNG must be able to adequately demonstrate that an effective security regime has been established during the Canadian portion of the vessels’ planned route prior to a loaded LNG vessel being allowed to transit to the facility."
Webmaster’s Comments: Without Government of Canada cooperation, the US Coast Guard will not allow LNG transits to the Calais LNG port.
The Coast Guard analysis of the Canadian and U.S. waters near the site said LNG tankers would have to follow parameters approved by the Coast Guard and "coordinated with the government of Canada," the group said.
"The government of Canada has repeatedly and firmly stated at the highest level that LNG transits are banned from Passamaquoddy Bay, indicating Canadian safety and security cooperation will not occur," Robert Godfrey, a researcher with Save Passamaquoddy Bay, said in a statement.
Indeed, in comments filed with FERC early in the year, Canadian Ambassador Gary Doer objected to the LNG tanker traffic that would come with the Calais LNG project or the nearby proposed Downeast LNG LLC project.
Webmaster’s Comments: As failed Quoddy Bay LNG developers Brian and Don Smith did with their bad news, Calais LNG's Ian Emery is attempting to make fatal news seem 'wonderful.' In reality, Calais LNG is a developer's pipe dream-turned-nightmare.
While my position is supporting the competitive access to our energy grid, I do not support the arguments advanced by some that liquefied natural gas (LNG) is our energy "saviour". They fail to address any of the significant questions posed, e.g.: What will the final price of LNG be? Where will we get our sources from? Who will guarantee the supply? How can we prevent cartelisation when it now becomes our sole fuel source since this does not represent a diversified fuel strategy? If LNG is so cost effective, why do we need to provide guarantees of a market prior to making an investment? [Red emphasis added.]
In June this year, the Cabinet approved the opening of negotiations with Exmar for establishing a floating storage and regassification facility at Port Esquivel, St Catherine, that, the administration says, will result in Jamaica enjoying cheaper and cleaner natural gas by 2013.
Last week, the State of Oregon filed a motion to dismiss in a suit brought by Pacific Connector Gas Pipeline LP, a project associated with the Jordan Cove LNG project. The motion to dismiss argues that the court does not have jurisdiction and that Pacific Connector's claims should have been brought before FERC.
Hydrates vs. LNG vs. pipelines
Hydrates are cheaper to make than liquefied natural gas because they form at a much lower temperature, around 14 degrees Fahrenheit for hydrates compared to minus 260 degrees for LNG. That means hydrates require less energy to produce than LNG and can be stored in simple refrigerated trucks, like those commonly used by food distributors.
As with LNG, the process of making and unmaking methane hydrates leads to a loss of some of the resource, a problem not encountered with a traditional pipeline. “You lose some with transportation, but it’s nowhere near as much as you [lose] with LNG,” Taylor said, estimating a 10 percent loss with hydrates compared to a 25 percent loss with LNG.
25 September 2010
The US government's recent authorization of natural gas exports from Cheniere Energy's Sabine Pass LNG terminal in Louisiana represents a milestone for the North American gas market and for the development of the region’s unconventional gas resources, a phenomenon which has already dampened US LNG imports and may now create the scope for excess gas to compete on world markets. [Bold red emphasis added.]
"For companies that built speculative terminals, it's time for them to get creative and accept that the U.S. is not and probably will not be as attractive a market for LNG as everyone expected," Kelly Bennett, a senior energy analyst at BENTEK Energy LLC, told SNL Energy.
Bennett differentiated between two types of LNG import terminals. Terminals built to serve a well-defined market are in a solid position, even in current conditions. He said the Everett LNG import terminal in Greater Boston is a good example of this type. The Everett terminal is owned and operated by GDF SUEZ Gas NA subsidiary Distrigas of Massachusetts LLC and was built in the early 1970s to serve a supply-constrained market at the end of the interstate pipeline system in the Northeast.
Bennett and BENTEK Managing Director E. Russell Braziel said in August that current conditions of abundant supply and low prices would keep most North American LNG import proposals — those that are still in the planning stage after being conceived in the heady days following 2000 — from seeing the light of day. [Red & bold emphasis added.]
City officials will be out of the country; hospitals wanted more time to study risks
Both Savannah Mayor Otis Johnson and Acting City Manager Rochelle Small-Toney are on a trade mission to China that has them returning to Savannah just as the Federal Energy Regulatory Commission's meeting begins at 7 p.m. at the Hilton Garden Inn Savannah Midtown.
From the outset, Small-Toney said, Southern LNG has not shared information with the city. That's a concern because the fire department and other city of Savannah emergency personnel, with the only Hazardous Material Response Team in the area, would be the primary responders if an accident happened.
The company's apparent lack of transparency comes on the heels of another spat it had with the city, said Savannah spokesman Bret Bell. In 2008, Southern LNG signed a contract with Southside Fire and Emergency Services as its primary fire protection after Savannah Fire/EMS billed it for almost $500,000 in unpaid fire protection fees. City officials only learned about the deal after it was inked. [Red, yellow & bold emphasis added.]
U.S. Rep. David Wu, D-Ore., introduced the bill, called the Local Control for Energy and Environment Act, on Sept. 14. Among other changes, the bill would strike Section 311 from the Energy Policy Act of 2005, which would strip from FERC its authority over construction, expansion and operation of LNG facilities and return that authority to the states.
In addition to the assertion of state authority in the bill, Oregon has tried to claim more of a role over the gas pipeline that would be Jordan Cove Energy's link to the interstate pipeline system. Pacific Connector Gas Pipeline, a subsidiary of Williams Cos. Inc., filed suit against the state on Aug. 27, charging that two Oregon land agencies had deliberately attempted to thwart the project. The agencies required the pipeline to obtain landowner signatures before they would process permits for the project. FERC cannot grant the pipeline eminent domain power under the Natural Gas Act until the state issues the permits, which would not happen if landowners refused to sign.
BMT Argoss, a subsidiary of BMT Group Ltd, has launched a dedicated 24/7, 365 days a year operational, maritime weather forecasting centre to provide support for customer operations such as platform installations and maintenance, near shore cable laying operations, dredging works, ongoing LNG terminal operations, and other marine activities. The service is designed to help to optimise operability and minimise risks due to unexpected and unfavourable weather conditions.
24 September 2010
U.S. Coast Guard says international agreements vital to LNG plan
The U.S. Coast Guard captain of the port for Northern New England, Captain J.B.McPherson, submitted his waterway suitability analysis and letter of recommendation to the Federal Energy Regulatory Commission (FERC) Tuesday.
The analysis refers to “the development, by the applicant, of standard operating parameters approved by the U.S. Coast Guard and coordinated with the government of Canada to enable the safe and secure movement of LNG tankers through Canadian and U.S. waters.”
…“The government of Canada has repeatedly and firmly stated at the highest level that LNG transits are banned from Passamaquoddy Bay, indicating Canadian safety and security cooperation will not occur.” [Red, italic & bold emphasis added.]
[SeafoodNews.com summary and content are not available without paid subscription. — SPB webmaster]
Harvey and Craig both prominently oppose the plans for liquefied natural gas plants on the Maine side of Passamaquoddy Bay. Huntjens spoke against these proposals. Malloch, a fisherman, does not want LNG tankers in the bay. Liberal Premier Shawn Graham opposes the plans, too, publicly disagreeing with Maine Gov. John Baldacci.
As mayor of St. Andrews, Craig led the charge against the proposal by Jamer Materials to open a new stone quarry at Bayside. Huntjens opposed this project, too. Jamer would not find too many supporters among the Greens or New Democrats. Liberal Environment Minister Roland Haché killed the project in the end.
Webmaster’s Comments: Canada and New Brunswick are showing no signs of weakening their prohibiting LNG in Passamaquoddy Bay.
One thing that people fail to consider is that a few years back, people thought we'd run out of reserves for gas, and there was a big build-out for LNG. The aftereffect of that was that they had to build liquefaction capacity, where they take the gas, liquefy it, ship it out and then re-gassify it. So this infrastructure was built and never used. There's a tremendous amount of idle infrastructure.… [Red, yellow & bold emphasis added.]
Webmaster’s Comments: US LNG import terminals are operating on average at only around 10% of capacity. The US is awash with domestic natural gas.
It is noticeable that in the US and Canada - where shale is having the biggest immediate impact - prices fell by more than half in 2008-09, much more sharply than in Europe. [Red, yellow & bold emphasis added.]
The Baker Institute researchers foresee natural gas -- reinforced by recent discoveries of vast reserves of shale gas -- playing "a very important role in the U.S. energy mix for decades to come." Under a business-as-usual approach, the United States won't have to import any LNG for decades. And the growth of natural gas will help the environment by lowering the demand for coal. [Red, yellow & bold emphasis added.]
From a national security perspective, the ramp up in domestic gas production has been a big plus, turning what had been a challenging outlook for natural gas into abundant supplies. Consequently, the need for additional terminals to handle imports of liquefied natural gas has evaporated, reducing the possibility that the United States could become dependent on foreign countries for yet another fuel besides oil. [Red, yellow & bold emphasis added.]
Members of Jamestown Boy Scout Troop 1 did an ‘outstanding’ job of playing the victims during a JEMS mass casualty drill on Sept. 16. In the mock scenario, [an] LNG transport tanker exploded, sending resultant shock waves and flying shrapnel toward residents relaxing near the Jamestown Boat Yard. Within 25 minutes of being dispatched by Incident Command, all 25 patients had been found, triaged, transported to the treatment area and designated for transport off island to trauma and medical centers. All responders and patients then enjoyed pizza together.
Council members also agreed to proceed with a plan to endorse a statewide divestiture of equity holdings in Amerada Hess, which seeks to build a LNG facility in Mt. Hope Bay with its Weaver’s Cove LLC partner. [Red emphasis added.]
Webmaster’s Comments: Rhode Island is hitting Hess Energy/Weaver's Cove where it hurts.
Citing LNG as an expensive fossil fuel that increases the United States’ reliance on foreign fuels, Senate Resolution 58 proposes support for increased energy efficiency and energy conservation, as well as the promotion of renewable energy technologies and projects. Sponsored by Republican Sen. Sean Kean and Democratic Sen. Robert Gordon, the resolution notes that New York and Connecticut rejected an LNG proposal for the Long Island Sound, instead offering two potential sites off the New Jersey coast and south shore of Long Island. [Red & bold emphasis added.]
Golden Pass LNG, a joint venture between Qatar Petroleum, ExxonMobil and ConocoPhillips , said yesterday in a letter to FERC that the first phase of construction is nearly complete and that it is ready to begin importing LNG for testing.
Webmaster’s Comments: This piles on an additional surplus of LNG import capability, even further mooting Calais LNG and Downeast LNG.
22 September 2010
Oil production may have peaked in the U.S. in the early 1970s but fears of dwindling natural gas reserves, which were prevalent even a few years ago, have been demolished by the discovery of huge new shale-gas deposits. Gas prices will likely remain flat at around $5 per 1000 cubic feet through 2020, changing assumptions about everything from the viability of green-energy projects to the prospects of a pipeline to bring stranded gas from Canada to the U.S.
The Marcellus Shale formation alone, spreading from New York to West Virginia, is believed to contain at least 700 trillion cubic feet of economically accessible gas, a 30-year supply at U.S. rates of consumption.
“You can’t in that time frame come up with enough demand to soak this up,” said Robert Ineson, a gas expert with IHS CERA, speaking at the IHS Global Pacesetters energy conference in Greenwich, Conn. [Red bold emphasis added.]
Webmaster’s Comments: The US natural gas glut means imported LNG will not lower natural gas prices in the Northeast.
Sabine Pass and Freeport -- currently the only U.S. terminals that can re-export LNG -- have together exported 9.7 bcf of gas since they received the approval last year, according to Waterborne Energy analysts in Houston. Sempra Energy's Cameron LNG terminal in Louisiana has recently applied for a re-export license.
Cheniere has gone one step further, planning to build a liquefaction plant that would export domestically-produced gas. Freeport LNG is also considering its options in that area, Mallett said. [Red & bold emphasis added.]
Webmaster’s Comments: The US has so much domestic natural gas, it doesn't know what to do with it all.
Webmaster’s Comments: The string of bad news continues with the US100-year domestic natural gas glut mooting the need for more LNG infrastructure.
Webmaster’s Comments: Maine Senator Susan Collins is setting Calais LNG up for one terrific splat on the pavement of failure. The US has no "right of innocent passage" under the UN Convention on the Law of the Sea (UNCLOS), as claimed by Sen. Collins, Sen. Snowe, and the US Department of State, since the US is not a party to that treaty. (See the UNCLOS definition of who has rights and responsibilities under the treaty.)
Sen. Collins and the others have constructed a "straw dog" in an attempt to look good to voters while bullying Canada instead of seeking a practical solution to the project's problems, such as moving to a location not impacting Canada. The straw dog is collapsing. The result will ultimately be political embarrassment to Senators Collins and Snowe for their unjustified cost to Maine taxpayers.
21 September 2010
The North American natural gas industry is expected to witness a steady growth in production from 72.4 Bcf/d in 2008 to 82.1 Bcf/d in 2020, at an AAGR of 1.2%. The unconventional natural gas is expected to account for 52% of the total production in 2020. In US, the unconventional natural gas already accounts for approximately 50% of the production. By 2020, the share is expected to increase to 58%. In Canada, the unconventional natural gas production is expected to account for 30% of the production in , up from approximately 5% share in 2008.
Although global LNG demand dropped substantially, the supply of LNG increased. New LNG liquefaction plants began operations in Qatar, Yemen, Indonesia and Russia. A major part of this increasing liquefaction capacity was intended for the U.S. market, which was at one point struggling with decreasing gas production. However, with new production from shale-gas basins, U.S. demand for LNG has fallen even further.
Russia is the world’s largest pipeline gas exporter, supplying one-third of the European Union’s consumption, but it is now facing competition from shale gas, the largest reserves of which are found in the US.
A Massachusetts Institute of Technology study has predicted that natural gas will provide 40 per cent of America’s energy needs in the future, up from 20 per cent today, thanks in part to the abundant supply of shale gas. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Ironically, the Coast Guard goes to considerable trouble to encourage maritime users to establish and abide by best practices. And yet, the Coast Guard ignores the LNG industry's best practices regarding LNG terminal siting. (For LNG terminal siting best practices, see LNG Terminal Siting Standards Organization.)
We're eager to actually read the Coast Guard's Letter of Recommendation regarding use of the waterway by Calais LNG, since it is likely — as it was with Downeast LNG — to have conditions that the developer cannot possibly meet.
But, in any case, the reality is that Calais LNG — like Downeast LNG — are about a decade too late; the US natural gas market has been turned on its head. There is so much domestic natural gas supply that US LNG import terminals are hurting, with no relief in sight.
In recent years, other proposed LNG import projects have been scrapped due to large increases in natural gas production from unconventional sources like shale in the United States. The United States now has comfortable supplies of its own and many existing LNG terminals — built on the expectation that the U.S. would be importing a lot more gas — now sit idle for much of the year. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The US is awash in natural gas, there is a surplus of LNG import capacity, there are over 10 additional import terminals already permitted but not constructing due to lack of need, and the Northeast will benefit from the 30+ new pipelines and pipeline projects to bring plentiful domestic supply, satisfying demand and reducing natural gas pricing in the Northeast to the level of the rest of the US.
17 September 2010
The Maine Board of Environmental Protection granted Calais LNG an additional 30 days to find another investor for their proposed LNG facility in Calais, ME, plus six additional weeks to gather other information requested by the BEP. The extra time effectively extends a hold on the company’s permit application until December 1. The decision was made after a hearing Wednesday, which the company had asked to postpone as well — a request that the BEP denied.
After two prior 30-day postponements to allow Calais LNG to find another financial backer after GS Power Holdings backed out of the project, which set the deadline to find funding or withdraw all applications at August 11 and September 11, respectively, CLF is “not surprised, but…a little disappointed the extension didn’t include a real deadline, after which the application would be returned,” CLF’s Maine Advocacy Center Director Sean Mahoney told the Portland Press Herald in an article published today.
AUGUSTA, Maine — The chairman of the Maine Bureau of Environmental Protection board has granted another extension to Calais LNG, giving the cash-strapped company until Dec. 1 to file its completed application to build an up to $1 billion liquefied natural gas facility at Red Beach in Calais.
Webmaster’s Comments: …Except that the Maine BEP chairman did not indicate any consequences if Calais LNG fails to obtain financing or complete their applications. And since the BEP twice extended Calais LNG permitting when the company had promised to withdraw, there is not much credibilty to the December 1st deadline.
With the rapid decline in US need to import LNG, the BEP may simply be waiting for Calais LNG to die an agonizing natural death rather than putting it out of its misery.
NEW YORK, Sept 16 (Reuters) - U.S. liquefied natural gas terminal operator Excelerate Energy is in talks with three companies to offer import capacity at its Gulf Gateway terminal offshore Louisiana, the company's chief commercial officer told Reuters on Thursday.
However, a deal could be hard to come by at this time given weak U.S. gas demand and ample domestic supply which has deterred shippers from sending much LNG to U.S. terminals this year, said Excelerate's CCO, Andree Stracke.
The Gulf Gateway terminal, which can send up to 690 million cubic feet of gas per day into the grid and began operations in 2005, has sat idle over the last couple of years as U.S. gas prices slumped under the weight of increased domestic supply from unconventional sources such as shale.
A number of terminals onshore the U.S. Gulf Coast have received only sporadic volumes this year. This has led many operators to change strategies. Some are offering import capacity, others have applied for re-export licenses, and one -- the Sabine Pass terminal in Louisiana -- is proposing to build a liquefaction plant to export U.S. gas. [Red, yellow & bold emphasis added.]
A bullet line from the North Slope using the Glennallen route is longer, a consideration with pipeline construction costs of about $5 million per mile, but Heinze has pointed out that a pipeline on that route would leave open the option of a separate spur line to a possible LNG project in Valdez.
[State gas corporation CEO Dan Fauske] said that a serious look at imported liquefied natural gas must be taken. Consideration of LNG imports will be included in his group's report next July, he said. Fauske also said he doesn't believe the bullet line project would preclude possible hydroelectric projects that could meet part of Southcentral and Interior Alaska's electricity needs.
Vast reservoirs of natural gas newly discovered in Marcellus Shale help drive prices down
Doubling Natural Gas Supplies
The big factor in the drop in rates is the discovery of massive amounts of natural gas supplies in the Marcellus Shale, which have effectively doubled the nation’s natural gas supplies, according to a study by the Massachusetts Institute of Technology.
The shale gas reserves found in neighboring states are supplemented by similar reserves found in more than half of the states across the country, including near major metropolitan areas, such as Chicago, Denver and Dallas. The discovery has helped stabilize natural gas prices, and, even lower the cost.
“The supply is adequate,’’ said [US Energy Information Administration analyst Neil Gamson], citing the discovery of shale gas reserves as a major factor. “Ten years ago, it wasn’t even on our radar screen. We thought LNG (Liquified Natural Gas) imports would have to make up the difference, but it doesn’t look like that will be the case for a while.’’ [Red, yellow & bold emphasis added.]
"The unconventional natural gas business may have already changed the overall supply and demand balance in North America, and perhaps globally," said Barry Munro, Leader of Ernst & Young's Canadian oil and gas practice.
According to Munro, the current supply/pricing environment has also changed economics for conventional LNG projects in Canada, and arguably for every LNG project across the world. Again, challenging economics and restricted access to capital will alter any expected LNG supported demand growth in many regions. [Red, yellow & bold emphasis added.]
The shale phenomenon has increased U.S. production, put downward pressure on prices and dashed plans to ramp up U.S. LNG imports. At the same time, lower spot LNG prices have shifted global gas flow patterns, displaced traditional European pipeline supplies with LNG and accelerated demand growth in China, India, the Middle East and South America. A new, interconnected global gas market is emerging, with important implications for flows, prices and transportation options.
“The U.S. shale gas revolution has resulted in a massive reduction in the need for new LNG imports into North America — possibly even turning the U.S. into an exporter. …" [Red, yellow & bold emphasis added.]
16 September 2010
Maine's Board of Environmental Protection says the company now has until December 1st to line up financial backers for its proposed liquified natural gas terminal in eastern Maine.
"In light of the significance of this project in terms of scope, complexity, and cost, as well as the time spent and expenses incurred by the parties and the Department thus far in the processing of the pending applications, it is reasonable to allow the applicant the requested time to complete refinancing negotiations and provide the information required by the Department without withdrawal of the applications," [BEP Chair Susan Lessard] writes.
"We think that they've had more than adequate time to find financing for the project," says Sean Mahoney of the Conservation Law Foundation. "We continue to believe that the impacts of the project on the natural resources and the existing uses up in Passamaquoddy Bay are inappropriate and the lack of any need for the project makes those impacts even more inappropriate." [Red, yellow & bold emphasis added.]
In mid-July, Calais LNG surprised the board by asking it to postpone a long-anticipated hearing on the project. The company said it needed more time to get material to the Department of Environmental Protection.
A week later, it revealed that its lead financial backer, GS Power Holdings LLC, was pulling out of the project. It told the board that if the Goldman Sachs subsidiary couldn’t sell its ownership interest by Aug. 11, all permit applications would be withdrawn.
Earlier this week, the company asked the board to cancel a meeting set for Wednesday between the parties in the case and to keep its permit application on hold until mid-October, while negotiations continue….
Based on that meeting, she decided to grant the company’s request for another 30 days to find a new investor, plus another six weeks to gather technical information requested by the Department of Environmental Protection.
…Ron Shems, a lawyer representing Save Passamaquoddy Bay and native tribes [stated that] [t]he project should have financing before applying for a permit… and the board should be asking for some assurance. [Red, yellow & bold emphasis added.]
TORP Terminal Chief Executive Officer Joseph P. Berno, in response to OGJ questions, said TORP still requires a license from the US Department of Transportation’s Maritime Administration to “own, construct, and operate” the Bienville terminal as well as “all applicable permits” from the US Environmental Protection Agency and state agencies to construct and operate the terminal.
“We’re happy to come up with a solution that we feel continues to be environmentally sensitive, while also being commercially competitive,” [TORP Terminal CEO Joe Berno] said. “It’s probably more expensive all the way around, to be honest with you, but it’s the cost of doing business.”
Webmaster’s Comments: The TORP Bienville Offshore Energy Terminal 63 miles offshore is safely away from civilian populations — unlike proposed Calais LNG and Downeast LNG that ignore their own industry's terminal siting safe practices warnings. It will be interesting, though, to watch Bienville try to make money with the US 100-year natural gas glut and US import terminals operating at a mere 10% of capacity.
TORP Technology originally proposed an "open loop" system that would have used massive amounts of Gulf seawater to warm up the gas, which has been chilled to minus 260 degrees and is known as liquefied natural gas, or LNG. The governor, with authority under the federal Coastal Zone Management Act, rejected that plan in 2008.
Webmaster’s Comments: If only Maine's Governor Baldacci were as committed to safety, economy, and environment, instead of encouraging irresponsible LNG developments in inappropriate locations.
Cheniere was the leading LNG import pioneer with Sabine Pass and one additional Gulf Coast LNG receiving terminal project (Corpus Christi) when forecasts of U.S. natural gas ("NG") shortages were predicted since 1998 in the order of 20 bcfd by about 2015. Twelve LNG receiving terminals were reactivated and/or newly constructed such as Sabine Pass, being the largest with a capacity of about 4 bcfd. However, all parties miscalculated and did not consider the advances in shale gas developments in Texas, Louisiana, Arkansas, Oklahoma and the Marcellus play on the East Coast. As shale gas became the price bench mark of $4/million btu (mbtu) for NG, the import of LNG o the US declined to less than 1.5 bcfd and Cheniere nearly went out of business.
The low price of shale [natural gas] at $4/mbtu makes a liquefaction plant attractive for export of LNG to the world market provided DOE gives approval for export. [Red, yellow & bold emphasis added.]
NIKISKI, Alaska — ConocoPhillips and Marathon are trying to get an extension on the permit that allows them to export natural gas overseas. They argue that without it, customers here in south central Alaska would run into serious problems come winter.
Wu, who’s running for re-election in the First Congressional District against Republican Rob Cornilles, on Tuesday introduced the Local Control for Energy and the Environment Act. The bill would repeal portions of the 2005 Energy Policy Act that stripped away much of the decision-making power over LNG facilities from the states.
A sharp reduction in imports of natural gas to the United States is also likely easing downward pressure on prices. During the report week, net Canadian imports hovered around 6.7 Bcf per day, about 13.0 percent lower than the comparable week last year, according to BENTEK. Additionally, the pace of deliveries of U.S. LNG imports in recent weeks has decreased considerably in comparison with year-to-date levels and from earlier this year. Sendout from U.S. LNG import terminals averaged 2.0 Bcf per day during the first 2 months of 2010, but during this report week averaged just 0.8 Bcf per day. This reduction in LNG imports is occurring at a time when many analysts had expected a greater number of LNG cargos to be directed to the United States, following production increases in countries such as Russia and Qatar. To the extent LNG cargos have flexibility in delivery locations, supplies are instead heading to Europe and Asia, where LNG prices remain higher than those that have prevailed in U.S. markets. [Red, yellow & bold emphasis added.]
15 September 2010
Attorney Rebecca Boucher, of Shems Dunkiel Raubvogel and Saunders, notes in her letter on behalf of SPB-US and NN that this is Calais LNG’s fourth last-minute request – the first being their request to postpone the entire hearing disrupting the schedules of more than 100 witnesses.
“This repeated failure of the applicant to defend its requests for postponement has gone on too long. It is unreasonable for Calais LNG to expect the BEP, other state agencies and the parties to continue to enable secret negotiations during this public proceeding. Calais LNG itself initiated this public proceeding by submitting applications requiring evidence of financial capacity.”
BEP executive analyst Cynthia Bertocci has e-mailed all parties involved ito inform them that Lessard has decided that Wednesday’s conference will proceed and they will have the opportunity to comment on the impact of the most recent request to put the application on hold until mid-October. [Red, yellow & bold emphasis added.]
In January, the Shawn Graham government called on the Federal Energy Regulatory Commission (FERC), the American regulator, to quash the proposed Calais terminal, saying the project poses "unacceptable risks to New Brunswick".
"…LNG vessel traffic is likely to impose a serious impact on commercial fishing, aquaculture facilities and Canadian tourism. Many New Brunswick citizens depend on the resources in this area for their livelihoods."
The Graham government is also protesting a similar project under consideration by FERC. Downeast LNG, proposed for Robbinston, Maine, would sit directly across from St. Andrews, N.B. [Red, yellow & bold emphasis added.]
In a letter late Monday, BEP Chairwoman Susan Lessard said today's meeting will proceed on schedule. Parties will have an opportunity to comment on the company's request to keep the application on hold until mid-October, she said.
The TORP Technology facility got the governor's nod because the Texas company agreed to use an environmentally friendly method to reheat the gas that doesn't affect marine life. The company also has agreed to set up a $25 million fund to help with the protection, restoration and improvement of Alabama's marine life and coast.
Webmaster’s Comments: This is yet another offshore LNG terminal, although there is no certainty it will be built.
The Bienville Offshore Energy Terminal will use the award-winning HiLoad Technology and a floating regas ship with no permanent offshore structures. The Terminal will also utilize closed-loop ambient air vaporization, which is a preferred solution of the Environmental Protection Agency (EPA),National Oceanic and Atmospheric Administration (NOAA)and environmental groups.
Project ruled inconsistent with Coastal Zone plan
They have joined half a dozen property owners as interveners on the side of the state of Oregon, which was sued Aug. 27 by a company hoping to build a 234-mile natural gas pipeline from Coos Bay through the upper Rogue River watershed to Malin.
In the lawsuit filed in U.S. District Court in Eugene, Pacific Connector Gas Pipeline LP, a Salt Lake City firm that would operate the pipeline, accused the state of employing a "legal Catch-22" by requiring developers to obtain approval from the roughly 220 landowners whose property may be crossed by the pipeline before it will process the firm's removal-fill permit application for the project.
Cheap gas coming?
…Last year, US natural gas production was 593 billion cubic metres compared to 524 billion in 2006. This sharp increase was completely unexpected. Before 2007, everyone thought US domestic gas production was about to slip into terminal decline with imports rising dramatically…
Already US investors in liquefied natural gas regasification plants have been badly hurt as the demand failed to materialise. [Red, yellow & bold emphasis added.]
US was seen as the LNG sink hole where the highest demand was expected by LNG project developers. The demand side forecast remains true - but who supplies that demand has changed. US domestic gas is now driving the supply leaving a number of LNG regas terminals in the US operating at well below capacity.
While the long term demand picture has not changed, in spite of the recession, the discovery of domestic gas and the availability of good infrastructures gave consumers of imported LNG a serious alternative. Increasingly, as supply shifts to domestic US gas, LNG regas terminals are either sitting idle or operating at well below capacity. In essence, the US is no longer as accessible nor as attractive as project developers once thought was the "obvious" market to sell to. [Red, yellow & bold emphasis added.]
14 Sep 2010
SPB Webmaster's Note: This same story was published as…
- Maine environmental board declines to grant another delay for Calais LNG
- — The Washington Examiner
- — San Francisco Examiner
- Environmental regulators deny LNG meeting delay
- — WABI
- Environmental board rejects Calais LNG delay
- — WLBZ
- — Boston Globe
- Environmental board declines to grant another delay for Calais LNG
- — LNG World News
Last month, Calais LNG received a one-month delay from state regulators to line up new investors after a Goldman Sachs affiliate withdrew from the project. But the Board of Environmental Protection rejected another request for a delay. That means a conference of all parties on Wednesday will proceed.
In a letter late Monday, BEP Chair Susan Lessard said tomorrow's meeting will proceed on schedule. At the conference, parties will have an opportunity to comment on the impact of the most recent request to keep the application on hold until mid-October, she said.
Webmaster’s Comments: The new financing was supposed to be lined up by August 11, but the BEP gave them another extension.
[Also published under the headline, "Augusta LNG talks to go as scheduled"]
A conference scheduled among the principles of Calais LNG, opponents and the state Board of Environmental Protection will be held as scheduled, despite Calais LNG’s last minute request to postpone the process while it seeks financial backing.
Cindy Bertocci, legal analyst to the BEP, said Tuesday that Chairman Susan Lessard received two requests from Calais LNG on Monday. One asked that today’s meeting be postponed and the other was a request for an additional 30-day delay in the company’s LNG site permit application deadline.
A number of entities, including the Roosevelt Campobello International Park Commission and the Conservation Law Foundation, have filed formal objections to any application extension, noting that it was Calais LNG that asked for an expedited process. They are asking the BEP to force Calais LNG to adhere to the deadlines set and to withdraw its application until funding issues are settled. [Red & bold emphasis added.]
Which approach do you think politicians should take? Maintain the hysteria in the face of unbiased, comprehensive studies, or help create jobs and a future for those in southern New England who desperately want to work?
Webmaster’s Comments: Some problems with this editorial are: (1) vetting the waterway does not allow using the LNG industry's own terminal siting best safe practices to indicate the Weaver's Cove LNG project is inappropriately located; (2) there is no financial case in favor of the LNG project; (3) costs to local communities have not been determined.
Johnson and acting City Manager Rochelle Small-Toney filed comments with regulators Monday after the mayor and some council members rebuked a company official at a city council workshop last week. In the written comments, city officials fault the company for not involving the city sooner and more thoroughly in the process, reneging on an earlier promise to refrain from trucking LNG, and not adequately analyzing and spelling out the risks involved. [Bold red emphasis added.]
Fast-forward to 2010. The biggest problem isn’t how to import more gas but what to do with the growing oversupply. Rapid production growth from fields such as the Barnett, Marcellus and Haynesville Shale has pushed US gas output to new heights. In 2009 the US overtook Russia to become the world’s largest gas producer. [Red, yellow & bold emphasis added.]
13 September 2010
"It's interesting that we're at this point and we still don't have any names," [Sean Mahoney of the Conservation Law Foundation] says. "If they're very serious about this they should share the names of people with counsel, subject to a confidentiality agreement. They haven't done that and we see no reason why they can't continue these discussions, but in the interim they should withdraw their application, without prejudice and refile it when they have their house in order."
"This is a project that we don't ever see being built, because the market is oversaturated right now," Mahoney says. "Just today the Federal Energy Regulatory Commission approved a request by an LNG import facility to export natural gas because there is no market for importing LNG." [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Yet one more Calais LNG broken promise to withdraw if it could not meet its own deadline.
In other developments with the Calais LNG proposal, the company is floating the idea of a second natural gas pipeline through the state to be funded by the state. In an August 12 letter to Governor John Baldacci, Calais LNG Development Manager Art Gelber asks to meet with state officials to discuss the possibility of the state financing and owning a second natural gas pipeline along the proposed energy corridor along Interstate 95. The gas could be made available to industrial manufacturers and homeowners in Maine and Boston and other regions to the south. Although Calais LNG has been working with the Maritimes & Northeast (MNE) Pipeline on using its pipeline to transport its natural gas, Calais LNG also has been studying the possibility of a second pipeline. Gelber says he would like to discuss the option, which he terms "a more viable and less predatory alternative to MNE."
Webmaster’s Comments: Calais LNG wants to burden Maine taxpayers with a nearly-$700 million debt. If Calais LNG employed 70 people, the cost to Maine taxpayers would be $10 million per job!
Thumbs up to Coast Guard Deputy Commandant for Operations Brian Salerno, who affirmed the Guard’s previous decision that the Taunton River is “unsuitable for the type, size and frequency of LNG marine traffic associated with Weaver’s Cove’s proposal.” Salerno said in his letter to Weaver’s Cove CEO Gordon Shearer that he considers the matter closed, eliminating one of Weaver’s Cove Energy’s and Hess LNG’s options for an LNG processing facility along Fall River’s waterfront.
The energy companies are now limited to their second proposal of an off-loading station in the middle of Mount Hope Bay and storage facility at Weaver’s Cove on Fall River’s waterfront, an option Weaver’s Cove Energy insists it is still pursuing. That option is unlikely to proceed, however, given the overwhelming opposition to the plan from residents and local, state and federal officials. A highly populated neighborhood is not the place to store the volatile fuel, and the offshore processing station would hinder efforts to develop the waterfront.
A new transport method involving ice crystals could make it practical to get natural gas from remote areas, with no worries about explosions.
Storing and shipping natural gas by trapping it in ice--using technology being developed by researchers at the U.S. Department of Energy--could cut shipping costs for the fuel, making it easier for countries to buy natural gas from many different sources, and eventually leading to more stable supplies worldwide.
The DOE researchers say the approach could also be safer than current methods of shipping natural gas, such as cooling it to produce liquefied natural gas (LNG), since there is no danger that iced natural gas will explode if the shipping container is damaged.
The results of a methane hydrate demonstration project in Japan by Mitsui Engineering & Shipbuilding, a large maker of ships for transporting oil and natural gas, suggested that the total cost of transporting methane hydrate--including the infrastructure required to make it and release the gas at its destination--could be "much lower than that of LNG," according to the company.
The snow-like hydrate can be packed into cubes and loaded into the refrigerated ships, boxcars, and trucks now used to ship frozen food at -10 °C. That temperature is far easier and cheaper to manage than the -162 °C required for LNG.
Webmaster’s Comments: How is it that FERC and the LNG industry repeatedly claim LNG cannot explode, but the US Department of Transportation indicates that LNG can explode, and that methane hydrate is safer than LNG since methane hydrate cannot explode?
MONTREAL, Sept. 13 /CNW/ - Long-term growth in shale gas production is expected to play an important role in shaping North and South American, as well as European and Asian natural gas demand, according to a new report released today by Ernst & Young at the World Energy Congress.
"The unconventional natural gas business may have already changed the overall supply and demand balance in North America, and perhaps globally," said Barry Munro, Leader of Ernst & Young's Canadian oil and gas practice.
According to Munro, the current supply/pricing environment has also changed economics for conventional liquefied natural gas (LNG) projects in Canada, and arguably for every LNG project across the world. [Red, yellow & bold emphasis added.]
12 September 2010
The president of the Rabaska Company expressed the hope that dynamics of prices in the North American gas market will open a possibility of importing liquefied natural gas from Russia for a terminal in Quebec City.
Webmaster’s Comments: This is another example of an improperly-sited proposed LNG terminal.
One expert, however, is skeptical about who will ultimately gain from an LNG terminal. Christian Hosford, an engineer at CHI Engineering Services in Portsmouth, N.H., has worked in the LNG field since the early 1970s. He said that the national economy has seen consistent trends that don’t bode well for the long-term success of an LNG terminal in Fall River.
…Hosford is reluctant to proclaim that a new and improved LNG port in Fall River will have a positive impact on the citizens of the state. In fact, he added, the trend throughout the past few decades has been that the LNG terminals open and close but the taxpayers pay the price. [Red, yellow & bold emphasis added.]
The reason was safety. The company, which is based in Birmingham, Ala., and is owned by the El Paso Corp. in Houston, was reactivating its long-mothballed storage tanks and unloading facility along the Savannah River back in 2001.
Since the company struck a deal, then it must act in good faith if it wants to change it. It should be completely transparent with Acting City Manager Rochelle Small-Toney and others who represent the city today.
The learning curve is already beginning. Last Thursday, Savannah Fire & Emergency Services Chief Charles Middleton expressed concerns about what could happen if the super-cool liquid escaped as a vapor, which is when it's flammable. Mr. Hughes responded that the vapor, which is lighter than air, quickly rises. Hence ignition is difficult. [Red, brown, and bold emphasis added.]
Webmaster’s Comments: Although the Savannah Morning News seems oblivious, Southern LNG still has not acted in good faith. It previously held a FERC-required public information meeting about its proposal to send as many as 58 LNG trucks per day on a populated and heavily-traveled route — but did not notify the City of Savannah or area emergency response officials of the meeting. This time, Southern LNG president Bruce Hughes displayed contempt for Savannah public safety with his untruthful statement.
To be clear: LNG vapor is initially -260-degrees Fahrenheit, making it heavier than air, so it does not rise until it has warmed by 100 degrees. Until rising, LNG vapors move with the wind — perhaps for considerable distance — exposing them to whatever ignition sources might be nearby, such as motor vehicles, lit cigarettes, traffic signals, or buildings. See (in a separate browser window) the Department of Transportation and Gas Research Institute's 1987 Falcon LNG vapor cloud test photographs of how LNG vapor behaves. Blowing in the wind, LNG vapors will even flow over a tall wall and then return to the Earth's surface.
10 September 2010
All four candidates seeking their parties' nomination for the November congressional election for Rhode Island's first congressional district told the Jamestown Press that they oppose the current plans for the Weaver's Cove LNG import project.
He came offering an apology, but by the time Bruce Hughes, president of Southeast LNG, finished his presentation, Savannah City Council members were even more determined to oppose the company's proposal to truck liquefied natural gas through the city.
"I'm prepared to struggle against this on principle alone until you're prepared to sit down together and have a real, honest discussion about this proposal," Johnson said. "... We have an obligation to the citizens who elected us to protect them from hurt and harm and undue risk."
Despite Hughes' repeated assurances that liquefied natural gas cannot explode and is not combustible, council members and Savannah Fire & Emergency Services Chief Charles Middleton had concerns about what could happen if the liquid escaped as a vapor. That, too, poses little risk, Hughes said, because the vapor, being lighter than air, quickly rises.
Acting City Manager Rochelle Small-Toney told council that in 2001, then-City Manager Michael Brown had an agreement from Southern LNG - which was seeking to reactivate its Elba Island terminal - that the liquefied gas would not be trucked to and from the facility. [Bold red emphasis added.]
Webmaster’s Comments: If we have learned anything in fighting the LNG proposals in Passamaquoddy Bay, it is that LNG developers will be deceptive regarding the actual risks of LNG. While LNG in its liquefied state will not explode or combust, neither will liquid gasoline. And, gasoline vapors rise faster than LNG vapors, since to LNG's cryogenic temperature makes the vapor heavier than air; LNG vapor must warm by 100-degrees Fahrenheit before it will rise, meaning it will be carried by the wind, perhaps for miles, presenting a hazard to whatever may be present on the water's or earth's surface within the vapor cloud.
The approval, granted Sept. 7, puts the terminal in Cameron Parish, La., one step closer to becoming the first facility to export natural gas produced in the Lower 48 states, drawing supply from the burgeoning unconventional gas fields in Texas, Louisiana, Arkansas and Oklahoma.
It also marks a radical shift in the plans of companies such as Cheniere, which once planned to profit from building multi-billion-dollar [regasification] terminals in different U.S. coastal locations. But the natural-gas shale boom brought those plans to a halt. North America's new gas wealth has prompted other export projects, such as Apache Corp.'s proposed facility in British Columbia, which aims to supply Asia with large quantities of Canadian natural gas. Natural gas, usually shipped through pipelines, has traditionally been a regional market; but when it is converted into liquid it can be shipped overseas.
Gas-bearing rock formations known as shales have changed the view that domestic U.S. natural-gas output would decline and that new supplies would have to come into the U.S. from other countries. In fact, these new supplies have depressed gas prices, discouraging gas imports that were once thought critical to feed growing demand for the fuel. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Earth to Downeast LNG and Calais LNG: The US is in a 100-year natural gas glut. Your projects are pointless.
The U.S. has received only light volumes of LNG this year, as ample gas supply, thanks to an increase in shale production, and weak demand have pressured gas prices and deterred shippers from sending much LNG there.
Plans for new U.S. import terminals have been scrapped and existing terminals are shifting strategies. Some, including Sabine Pass, now have the ability -- and approval -- to re-export previously imported LNG to higher-paying markets elsewhere.
The bleak outlook for US LNG imports was emphasised this week after the US Department of Energy (DoE) September 7 granted Cheniere’s request to export up to 16 mtpa of LNG from its Sabine Pass terminal in Cameron Parish, Louisiana. [Red, yellow & bold emphasis added.]
Shale Gas Could Make the US a Major Exporter
Spurred by increase in natural gas production in the US, the export facility [the largest LNG regasification terminal in the world] would be the first in the country in 40 years. Shale gas production has skyrocketed across the continental US, and LNG export would help relieve the influx of gas into the domestic market.
… “The US is experiencing an increase in natural gas production, primarily driven by unconventional gas plays, while natural gas demand in the US continues to lag behind market projections. Due to the depth of the markets in South Louisiana with an abundance of supply and existing pipeline infrastructure, we can provide an additional outlet for US natural gas production while offering a low cost source of supply for global buyers seeking alternatives to oil-indexed contracts."
The conversion is expected to take place in two phases. The first would build two LNG trains each capable of processing 3.5 million tons per year with a combined liquefaction capacity of about 1 billion cubic feet per day.
Currently, there are three Gulf Coast LNG import terminals seeking permission to export. Others include Freeport LNG in Texas and Sempra LNG in Louisiana. The Freeport LNG project is similar to the Sabine Pass conversion, but the Sempra LNG project is going to be a re-export project only. [Red, yellow & bold emphasis added.]
Platts LNG Daily [subscription required] reports that two LNG cargos are expected to arrive at the Freeport LNG terminal by the end of the week. The LNG River Nigeria arrived at the facility on Wednesday and the Maersk Meridian is expected to arrive at the terminal today.
Separately, Bloomberg reports that an LNG vessel left the Freeport LNG terminal earlier this week carrying a re-exported LNG cargo. The news report suggests that the vessel is headed for an Asian destination. [Red & bold emphasis added.]
ConocoPhillips and Marathon Oil have asked the U.S. Department of Energy for two additional years to ship Alaska LNG to Asian markets. A group of seven Democratic lawmakers believe the export license should only be extended if the terms of a 2008 settlement between the State of Alaska and the two companies are also extended.
8 September 2010
EIA forecasts gross pipeline imports of 9.2 Bcf/d in 2010, an increase of 1.3 percent from 2009. Forecasted imports of liquefied natural gas (LNG) average 1.25 Bcf/d in 2010 and 1.32 Bcf/d in 2011. Low U.S. prices have discouraged imports, and ample domestic natural gas production has reduced the need for large quantities of LNG despite significantly higher consumption. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The message keeps getting repeated, this time by the US Department of Energy's Energy Information Administration (EIA): There is no need for Calais LNG and Downeasst LNG.
Webmaster’s Comments: Goldman Sachs was the money behind Calais LNG until it dumped the LNG project because Calais LNG would not be profitable.
The Congress of Councils met Wednesday at the Jamestown Recreation Center, bringing together more than 100 state and local officials from municipalities in Rhode Island and southeastern Massachusetts, including Middletown, Portsmouth and Newport.
More than 100 concerned residents and elected state and local officials representing Aquidneck Island, Southern Rhode Island and Massachusetts turned out in Jamestown Wednesday morning to show a unified front to fight a proposed liquefied natural gas (LNG) off-shore facility in Mount Hope Bay with a terminal in Fall River, MA.
“If you all were really sincere about this discussion about the route it should have been done with officials from the city and county, the first responders should have been involved,” points out Johnson.
“We would have liked to be brought in earlier. I think that is pretty clear. When statements are made about explosions not being able to happen, that is just not reality. We know in my business that we prepare for the worst case scenario,” says [Fire Chief Charles Middleton]. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Do all LNG developers use the same disrespectful, irresponsible, untruthful script?
Cameron follows 2 other U.S. terminals with re-export
Webmaster’s Comments: This will be the 3rd US LNG re-export terminal in the lower 48 states. The US is drowning in domestic natural gas.
The cargo exported on Sept. 3 was brought in to Freeport last month from Peru, according to vessel tracking data compiled by Bloomberg. The terminal received another cargo on Sept. 6 and is scheduled to receive a third on Sept. 10, the data showed.
Webmaster’s Comments: The two US LNG re-export terminals are busy sending LNG away from the US. Are Calais LNG and Downeast LNG paying attention? They are projects without purpose.
A PLANNED … natural gas export project has become the focal point to provide hundreds of aboriginal people with marketable job skills and, for some, employment during construction and on operations afterward.
Both the pipeline and the LNG terminal have received provincial and federal environmental clearance. An initial plan to start construction work next year has been delayed because Apache and EOG only bought into the projects this year. No firm start date has been released.
Webmaster’s Comments: Does this sound at all familiar? Hints: Quoddy Bay LNG, Downeast LNG, Calais LNG.
Webmaster’s Note: The significance of this article is not only what is contained in the story, but in the related matter in the Webmaster's Comments, below.
DUBAI — As Dubai plans to receive its first cargo of liquefied natural gas later this year, a ship converted to store the fuel arrived at an export terminal in Qatar, the world’s largest supplier of LNG.
The 33 year-old Golar Freeze, which can hold 125,000 cubic meters of liquefied natural gas, is equipped to store and regasify Qatari LNG as part of a $450 million, 10-year contract that the Dubai Supply Authority awarded to Golar LNG in 2008. [Red emphasis added.]
- LNG ships can be used to store LNG efficiently, and along with offshore terminals can offer greater market flexibility than shoreside facilities with storage tanks. Northeast Gateway and Neptune LNG offshore from Gloucester, Massachusetts; and Gulf Gateway offshore from Louisiana, are this type of LNG terminal.
- In the 2006 March 14 Golar Freeze LNG carrier incident at Elba Island, Georgia, a federal river pilot aboard a freighter transited past the Golar Freeze at full speed, in violation of Coast Guard requirements.
The river pilot had radioed four security alerts announcing his presence, but because the docking pilot aboard the Golar Freeze was asleep instead of monitoring river traffic, as he was supposed to be doing, the alerts went unnoticed.
The passing freighter's wake created a surge along the LNG jetty, forcing the Golar Freeze from the jetty, parting several of its mooring lines, and causing an emergency disconnect of the LNG offloading arms.
Two seasoned, licensed pilots — one on the Golar Freeze and one on the passing freighter — made simultaneous errors that resulted in the LNG incident.
Was the incident "improbable,"? Yes. Did it happen? Yes. Even when FERC and the Coast Guard indicate probability of an incident is negligable, it could still happen, as it did in this case. Human error can never be ruled out.
This also demonstrates why world LNG industry best practices should be heeded — unlike FERC and US Coast Guard terminal siting decision making for LNG facilities. SIGTTO LNG terminal siting best safe practices indicate Elba Island is an unsafe location for an LNG terminal. (Note: The Elba Island terminal was sited decades before LNG siting best practices were established. For more on LNG terminal siting best practices, see LNG Terminal Siting Standards Organization; SIGTTO = Society of International Gas Tanker and Terminal Operators.)
7 September 2010
U.S. Senators Jack Reed (D-RI) and Sheldon Whitehouse (D-RI) and U.S. Representatives Patrick Kennedy (D-RI) and Jim Langevin (D-RI), who have been working to block the siting of LNG marine terminals in urban communities that would require LNG tankers to pass by eleven Rhode Island towns and cities and more than 25 miles of densely populated coastline, applauded the Coast Guard's decision.
"The Coast Guard's letter is another reminder that Mount Hope Bay and the Taunton River are not appropriate places for an LNG terminal and associated vessel traffic," said U.S. Senator Jack Reed. "From a safety, economic, and environmental standpoint, it is clear that Weaver's Cove LNG proposal would place a burden on the Coast Guard, local law enforcement, taxpayers, and the resources of Mount Hope and Narragansett Bays. I will continue working with colleagues from Rhode Island and Massachusetts to oppose this project." [Red emphasis added.]
Webmaster’s Comments: Downeast LNG and Calais LNG suffer from the same kind of inappropriate siting, as even indicated by their own LNG industry best safe practices. See LNG Terminal Siting Standards Organization for more on LNG best practices.
Still under appeal is a separate proposal for an offshore station in Mount Hope Bay, allowing tankers to avoid traveling under the three bridges that connect Fall River and Somerset, said The Herald News.
Weaver’s Cove submitted a report to FERC in which the U.S. Coast Guard analyzed the potential effects of LNG vessel traffic servicing the Weaver's Cove facility on nearby recreational boating. The report is available in the FERC eLibrary under Docket No. CP04-36.
6 September 2010
The denial issued Sept. 1 by Rear Adm. Brian M. Salerno, the deputy commandant for operations, upholds a 2007 ruling that found that portions of the waterway leading to the proposed offloading facility in the north end of the city were unsuitable for LNG tanker traffic. The decision raised questions about the ability of tankers to navigate safely through the old and new Brightman Street bridges, which are only 1,100 feet apart.
Cameron LNG LLC asked FERC on Sept. 3 for authorization to re-export foreign LNG in short-term arrangements of up to a cumulative total of 250 Bcf from its existing import terminal in Cameron Parish, La.
The LNG operator noted that the additional capability would help it weather the environment of low gas prices and large gas supply, which has greatly reduced the need for LNG imports and which some analysts expect to last at least 10 years.
The company was careful to note that it was not requesting the capability of exporting domestically produced gas. "Cameron's LNG export proposal would apply only to foreign-sourced LNG that has been imported and stored at the terminal," it said. "It would therefore not affect the availability of domestic gas supplies."
Cameron LNG is a wholly owned subsidiary of Sempra Global, which is owned by Sempra Energy. On Sept. 2, a Cameron affiliate and customer of the terminal, Sempra LNG Marketing LLC, filed an application with the U.S. Department of Energy for a blanket export authorization. SLNG Marketing said it wants to export for a two-year period up to a cumulative total of 250 Bcf of LNG that has been imported into the U.S. SLNG Marketing asked Cameron LNG to obtain export authorization from FERC, and Cameron LNG said other potential customers have expressed interest in exporting LNG. These other customers would also have to file for export authorization from the Department of Energy before using the terminal in this way. [Red, yellow & bold emphasis added.]
An economic relationship between Stephen Wedderburn — the technical director for the Government's effort to develop a liquefied natural gas (LNG) facility in Jamaica — and the Belgian firm designated the preferred bidder on the project will likely be a major focus of Contractor General Greg Christie's ongoing probe of the scheme, a series of emails and letters on the project obtained by The Gleaner suggest.
When you consider that China is currently constructing the equivalent of two, 500 megawatt, coal-fired plants per week, the drive to get our natural gas to Asian markets should be a priority for ALL us.
Oregon Pipeline disagreed with several of the conditions imposed in Livingston's approval decision. The company had submitted a consolidated application for multiple land-use approvals for the construction of 41 miles of pipeline serving its proposed Skipanon Peninsula liquefied natural gas terminal in Warrenton.
4 September 2010
One by one, developers of US LNG import terminals pulled the plug this summer as overabundant domestic natural gas production turned what had been a challenging outlook for imported gas into an all but impossible business model.
The string of scrapped proposals started in May, when Bradwood Landing in Oregon fizzled out with the bankruptcy of owners NorthernStar Natural Gas. Next came the Atlantic Sea Island Group, whose developers told the US Coast Guard in June they were suspending plans to build a terminal offshore New York and New Jersey.
In July, the main investor behind Calais LNG in Maine jumped ship, leaving its project manager scrambling to find a new financial backer. And in August, the fully permitted Maple LNG proposal in Nova Scotia admitted defeat to market forces.
Of the dozen other proposals already approved by US Federal Energy Regulatory Commission and another three applications awaiting consideration, how many new terminals will get built? The answer, according to David Ledesma an analyst with UK-based South-Court, is none.
The rush to build LNG terminals -- which preceded the large-scale development of shale gas in the US -- created import capacity of just over 14 Bcf/d -- about seven times the amount of LNG that tankers actually carried to the US in the past two years, said Biliana Pehlivanova, a commodities analyst who specializes in LNG for Barclays Capital.
"From a [US] market perspective we are quite well supplied, really for the foreseeable future," she said. "Between the potential for growth of shale gas in the US and also potential for growth of Canadian shale gas, the prospect for the US needing to import significant amounts of LNG to the order of magnitude that we already have capacity for are quite far out into the future."
"I've been reading all the market analysis that comes my way," said Mike Carrier, a top energy adviser to Governor Ted Kulongoski. "As long as our economy is as soft as it is, as long as the demand for natural gas is low and the price stays as low as it is and as long as the domestic supply of shale gas appears to be as robust as it is, I agree with what the governor said recently, that it's difficult to see a business case for an LNG import facility."
"It looks like everything is converging to go against the idea of building new LNG plants." [Red, yellow & bold emphasis added.]
One of 10 proposed Canadian import terminals is working; one to be export project
Ten green bottles hanging on the wall …” goes the old song for children. Let’s make that “ten LNG projects” that once dangled the prospect of LNG imports to Canada for regasification into billions of cubic feet of gas for sale to North American customers by about 2015.
[C]onventional gas production is declining and market demand is rising, the emergence of shale gas has changed the equation, forcing most LNG proponents to either stop, or reduce work. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The Canadian LNG projects that have stalled:
- Anadarko's Bear Head LNG project;
- Newfoundland LNG;
- Quebec-based Energie Grande-Anse;
- Enbridge, Gaz Metro and Gaz de France's Rabaska LNG in Quebec;
- Petro-Canada (now Suncor Energy) and TransCanada's Gros Cacouna LNG;
- WestPac LNG near Prince Rupert on the British Columbia coast and gas-fired power generation plant on Texada Island; and
- Merrill Lynch Commodities' Teekay Corp. at Kitimat, British Columbia.
In a recent letter to Weaver's Cove CEO Gordon Shearer, Coast Guard Deputy Commandant for Operations Brian Salerno, wrote that the waterway "is unsuitable for the type, size, and frequency of LNG marine traffic associated with Weaver's Cove's proposal."
Webmaster’s Comments: Earth to Weaver's Cove Energy: As empowered by Congress, the Coast Guard's unencumbered Letter of Recommendation in favor of using the waterway is a requirement for LNG transits to occur.
Last month FERC Chairman Jon Wellinghoff responded to a letter from Louisiana Lieutenant Governor Scott Angelle (D) regarding Sabine Pass LNG's proposal to export U.S. domestic natural gas via its LNG facility. In his response, Chairman Wellinghoff described the timing and benefits of its pre-filing process.
This week, project opponents including Columbia Riverkeeper, Columbia River Business Alliance and seven other groups and individuals came together and filed a single appeal of the Aug. 23 ruling from Hearings Officer Peter Livingston that granted conditional approval to the land-use application from Oregon Pipeline LLC.
A company hoping to build a liquefied natural gas pipeline from Coos Bay through the upper Rogue River watershed to Malin has sued the state of Oregon, charging it with wrongfully delaying the project.
The catch is that the Federal Energy Regulatory Commission, the federal body that regulates construction of natural gas pipeline projects, cannot grant the firm the power of eminent domain over resistant property owners until the state authorizes the permits, according to the complaint.
"All over Southern Oregon, Pacific Connector has been pressuring people to give up some of their private property rights," she added. "They don't seem to be getting the message: People in Oregon value our land and don't support the excessive eminent domain power that the pipeline is trying to wield."
The upheaval is partly a function of a gas market that has turned upside down during the past three years. Gas prices and demand have shriveled. And domestic reserves are burgeoning as drillers access supplies trapped in shale formations.
2 September 2010
Hess would like to take over our Bay, at our expense. If you think government spending is out of control now, wait until you get the bill for the increased police, EMS and security costs involved with the transit of LNG in the Bay.
The Congress of Councils will be unique. It will be the towns taking a stand in their own defense. They will work with the many great private organizations that have done good work on this issue to date. But they won’t depend on the kindness of others to protect your rights and your wellbeing. They will attend so cities and towns can take a stand as one community. Something our country was founded on.
The technique has caught on. Like wildfire. Because of its success, new wells have sprung up all over Texas, Utah, Pennsylvania and elsewhere. Natural gas prices have fallen. The LNG re-gasification plant for Quebec has been put on indefinite hold. The New Brunswick plant stands somewhat underused. A new plant in Texas, near Houston, has only received a few contracted loads of LNG. Interest in "fracking" (hydraulic fracturing) is spreading rapidly worldwide to the consternation of Qatar, the United Arab Emirates and Russia.
It has long been known that northeast North America has large shale formations with methane trapped in their tight pores. In New York state and Pennsylvania it is called the Marcellus Shale. In Quebec there are two formations of interest. One is called Utica and a smaller one, Lorraine. These are large areas extending (very roughly) from inside New York state to Quebec City. Lorraine lies over the Utica formation. Parts of both lie under the St. Lawrence.
Indeed, the gas will mostly be destined to the U.S. northeast, which is currently saturated in cheap natural gas flowing from the west, new wells in Pennsylvania as well as natural gas from Nova Scotia. Why play to a cheap market? The U.S. Energy Information Administration estimates that natural gas demand will increase by at least 0.5 per cent per year for the next 20 years. We might as well wait for the higher prices and royalties. [Red & bold emphasis added.]
Expanding supplies of natural gas liquids [NGL] derived from unconventional sources, such as the Eagle Ford and Marcellus shales and Bakken formation, is expected to benefit the cost structure of the North American petrochemical market, industry observers said in a webinar Thursday.
Lippe said such favorable cracking economics will give US ethylene producers competitive advantages compared to European and Asian producers, adding that the wide differentials between crude oil and cheaper North American natural gas prices also creates an encouraging economic environment for midstream and petrochemical producers. [Red emphasis added.]
Webmaster’s Comments: Vast oceans of domestic shale gas are providing more benefit than methane.
1 Sep 2010
[Keltic Petrochemical's] was also not the first proposal for a petrochemical industry in the region though nothing else had gotten that far along. Now, with the end of the Goldboro [LNG] hopes and the recent decision not to further develop the Sable gasfield, the notion of an energy-based economy for the region – which at one time also included ambitions for offshore exploration and development support from Strait area ports – has pretty well evaporated.
Webmaster’s Comments: There are over 30 new pipeline and pipeline expansion projects just to bring natural gas to the Northeast. As a result, supply and prices in the Northeast will even out with the rest of the US.
- increased pipeline capacity in the US that makes domestic gas very portable, and has opened up new markets (the Northeast US and California) for previously stranded Rocky Mountain gas in the US – the mainstream Canadian media have not reported on this – and the amount of Canadian gas that is being displaced by this – at all.
SUMMARY: In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an Incidental Harassment Authorization (IHA) to the Northeast Gateway Energy BridgeTM LP (Northeast Gateway or NEG) and its partner, Algonquin Gas Transmission, LLC (Algonquin), to incidentally harass, by Level B harassment only, small numbers of marine mammals during operation of an offshore liquefied natural gas (LNG) facility in the Massachusetts Bay for a period of 1 year.
A community advocacy group calling itself the Congress of Councils will hold a meeting next week to discuss how Rhode Island communities can work together to oppose a proposed floating liquefied natural-gas terminal in Mount Hope Bay.
Confirmed speakers include Attorney General Patrick C. Lynch, Save The Bay executive director Jonathan Stone, and Evan Smith, executive director of the Newport and Bristol County Convention and Visitors’ Bureau, according to a news release from the Congress of Councils. Political candidates running for statewide and federal offices along with members of the General Assembly representing Bay areas are also invited.
Earlier this month members of Rhode Island's congressional delegation wrote to FERC Chairman Jon Wellinghoff expressing their concern with the planned Weaver's Cove LNG import project. In their letter, available in the FERC eLibrary under Docket No. CP04-36, the Members of Congress also invited Chairman Wellinghoff and the other FERC commissioners to meet with the delegation and to tour the site proposed for the Weaver's Cove LNG project.
Yesterday FERC notified Cameron LNG, LLC that the Commission's pre-filing procedures and review process are not applicable to the company's proposal to modify its facility to allow re-exports of foreign-sourced LNG.
Webmaster’s Comments: Yet another US LNG re-export project. Freeport LNG in Texas was the first US LNG re-export terminal to be permitted. This is more proof that additional US LNG imports are not needed — more bad news for Calais LNG and Downeast LNG.
The lawsuit, filed Friday in U.S. District Court, pits Pacific Connector against Louise Solliday, director of the Oregon Department of State Lands, and Richard Whitman, director of the Oregon Department of Land Conservation and Development.
Without that permit, the state Department of Land Conservation and Development will not review whether the project is consistent with the federal Coastal Zone Management Act — a requirement to getting certification from federal regulators, according to the lawsuit.
Even if demand for natural gas surges–and some of the legislation making its way through Washington makes that seem likely–it will have a hard time keeping up with a rapidly-expanding global supply of the fuel. The last month has seen several massive discoveries of natural gas, including previously uncovered fields in Israel and Australia.
The discovery of natural gas in regions not known as traditional energy hot spots has convinced investors that supplies will be ample for the foreseeable future, adding further downward pressure to prices [see UNG's Insurmountable Obstacle].
Webmaster’s Comments: The US is drowning in its own natural gas, and overseas shale gas discoveries — along with massive world LNG liquefaction capacity — reduces demand for exporting US natural gas, increases US natural gas supplies even further, and further reduces the need for the US to import LNG. This is all bad news for Downeast LNG and Calais LNG.
In the US, an API report advised that thanks to the arrival of shale gas since the middle of the last decade the United States has a future supply of natural gas of over 2,000 Tcf. At current consumption rates, this is enough natural gas to supply the nation for the next hundred years. This is an increase of more than 35% in just the last 5 years and it is rising every year as new resources are qualified. [Red, yellow & bold emphasis added.]
The Pipeline and Hazardous Materials Safety Administration (PHMSA) issues federal safety standards for siting liquefied natural gas (LNG) facilities. Those standards require that an operator or governmental authority control the activities around an LNG facility to protect the public from the adverse effects of thermal radiation and flammable vapor-gas dispersion. Certain mathematical models and other parameters must be used to calculate the dimensions of these so-called "exclusion zones."
After carefully considering the information provided in the Original FRPF Report, Supplemental FPRF Report, and NASFM MEP Report, PHMSA is issuing further guidance on the standard for obtaining approval of alternative vapor- gas dispersion models, particularly the requirement for validation by experimental test data. That guidance is based on the MEP's three-stage process for evaluating such models, but includes modifications to address the concerns of other stakeholders, including NASFM and FERC.
SPOT charter rates for liquefied natural gas carriers are set to continue increasing for the rest of this year due to a growing shortage of LNG carriers and rising demand for spot gas cargoes, says a leading shipowner and shipbroker.According to Golar LNG Energy chief executive Oscar...
Webmaster’s Comments: US LNG developers claim importing LNG would lower natural gas prices. This news indicates an increased price in LNG transportation, adding to the cost of importing LNG.