"For much of the state of Maine, the environment is the economy"
|2016 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2015 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2014 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2013 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2012 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2011 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2010 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2009 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2008 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2007 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2006 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2005 |||Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec ||
|2003 2004 ||
30 November 2010
The following link is to a PDF document (1.6 MB)
U.S. natural gas proved reserves—estimated as “wet” gas which includes natural gas plant liquids—increased by 11 percent in 2009 to 284 trillion cubic feet (Tcf). This is their highest level since 1971, despite an approximate one-third decline in the prices used to assess economic viability for 2009 reserves as compared to the prices used in 2008. U.S.
Shale gas development in Louisiana, Arkansas, Texas, Oklahoma, and Pennsylvania drove the increase in proved reserves of natural gas. Louisiana led the nation in wet natural gas proved reserves additions with a 77 percent net increase of 9.2 Tcf owing primarily to development of the Haynesville shale. Both Arkansas (Fayetteville shale) and Pennsylvania (Marcellus shale) nearly doubled their reserves with net increases of 5.2 Tcf and 3.4 Tcf respectively. Shale development in Texas and Oklahoma wasn’t far behind, giving these two States proved reserves increases of 3.2 Tcf and 2.1 Tcf. These increases occurred despite a decline in natural gas prices relative to those used in assessing reserves at the end of 2008. This underscores the role of more efficient and effective shale gas exploration and productive technologies such as horizontal drilling and hydraulic fracturing. [Red bold emphasis added.]
Cheniere runs a liquefied-natural-gas import terminal in Louisiana. The opening of shale gas reserves obviates the need for LNG imports, so Cheniere wants to build a new facility by 2015 to export LNG. It has signed memoranda of understanding with three potential customers: Morgan Stanley and two Chinese and European gas distributors.
America's sudden gas riches mean LNG cargoes destined originally for itself can supply Europe, eroding Gazprom's market share and forcing it to adjust contract terms for some customers. Should America start exporting LNG, it would further undermine the old model of captive regional markets paying oil-linked prices. That is great for customers; Russian gas monopolies, not so much. [Red bold emphasis added.]
In his recent letter to the editor, Dean Girdis again tries to justify the Downeast LNG project in Robbinston. He claims pipeline capacity is inadequate to bring more gas into New England because the pipelines are at capacity from November to March and cannot be expanded. He also claims building a new pipeline is not possible because “it is impossible to secure the necessary rights-of-way.” According to Girdis, LNG is the only solution to bring in more gas.
Pipeline capacity to New England continues to expand. Today, there are several “impossible” pipeline expansion projects in the works to bring inexpensive shale gas to New England. This will avoid the expense of LNG, and the continued reliance on foreign sources for our energy requirements [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The US has a 100-year natural gas glut. Neither Maine nor New England have a shortage of natural gas, and existing New England LNG terminals have plenty of available capacity to accommodate future needs. There simply is no excuse for yet more LNG import capacity, let alone an LNG terminal in Passamaquoddy Bay where no practical market exists.
In the two-page letter, [Hess LNG CEO Gordon Shearer] lays out what the company considers to be five key points in regard to supplying the region’s energy needs while providing jobs, investment and additional tax revenues to Fall River and Somerset.
Webmaster’s Comments: Besides the Weaver's Cove LNG project violating LNG industry terminal siting best practices, the region is already well supplied with natural gas, and oversupplied with LNG import capacity.
Earlier this month, Russian state-backed energy firm Gazprom acquired a 30% stake in four offshore oil exploration blocks offshore Cuba. And now, a unit of China's state-run China National Petroleum Corporation (CNPC) has won a contract to expand Cuba's Cienfuegos refinery. The deal involves CNPC developing a power plant and petrochemicals complex and also building a liquefied natural gas (LNG) import terminal on the same site.
In terms of the numbers, the Cienfuegos refinery is expected to cost a minimum of $4.5 billion while the LNG terminal would cost an additional $1.3 billion. Such a high degree of investment by the Chinese - if completed - could well mark one of the largest ever investments in the Cuban nation. And as things stand, work on the project is expected to start at the start of next year, with completion expected by the end of 2013.
29 November 2010
"The investment case for selling that power to New England is actually not looking very good, partly because they have more than enough natural gas — cheap natural gas — to meet their own electricity needs for the next decade, at least," Couture said in an interview.
One interesting recent find that was mentioned in the recently televised documentary "Haynseville", is that the already huge Haynesville shale deposit was compounded by another huge deposit discovered in a slightly shallower layer of rock.
The following link is to a PDF document (1.1 MB) consisting primarily of tables and graphs. The following statements are the result of calculations made from table data supplied in the referenced document. — SPB webmaster
The landowners requested that the BEP enforce the requirement that applicants for projects being reviewed by the board must maintain "sufficient title, right or interest throughout the entire application processing period" to the property that is proposed for development. The property owners asked that the BEP continue to postpone or suspend the processing of Calais LNG's application. [Red, yellow & bold emphasis added.]
With a Dec. 1 deadline approaching, Calais LNG has again asked state regulators for an extension to file its completed application, the fourth extension the company has requested since July. [Red, yellow & bold emphasis added.]
"This is another significant development for our liquefaction project at Sabine Pass and we are pleased to announce the start of negotiations of definitive agreements with Gas Natural Fenosa," Cheniere Chairman and CEO Charif Souki said in a statement. "Including this MOU we have entered into MOUs for approximately 4.7 [mt/year] of LNG processing capacity and look forward to finalizing discussions with additional customers." [Red & bold emphasis added.]
Webmaster’s Comments: Here is evidence that LNG construction can damage existing businesses by long-term tying up accommodations, making them unavailable to business travelers and visitors. Non-lodgings businesses that depend on visitors would suffer.
26 November 2010
JUST A few years after US authorities approved plans to build a raft of gas-import terminals along its coastline, a glut of supply in the country has opened a new, more profitable opportunity: exports.
This week, Freeport LNG and Australia's Macquarie bank said they would spend $2bn to build a liquefied natural gas (LNG) export plant alongside an existing import terminal on the Texas coast. [Red bold emphasis added.]
Horizontal drilling and hydraulic fracturing technologies have dramatically altered the near term supply picture and have forced energy prognosticators to recast their forecasting models. Most of them now are calling into question the need for the U.S. to import as many hydrocarbons as previously thought.
According to Mr. Papa, “There is clearly sufficient North American gas supply to last for a bunch of years; 50 years at least. And there is clearly no need for us to import LNG (liquefied natural gas) for multiple years to come.” [Red bold emphasis added.]
[A]s the burgeoning development of plentiful supplies of so-called shale gas in the Lower 48 has caused a paradigm shift in the North American gas market, the price of Lower 48 gas has plummeted to levels below the projected transportation rates on a gas line from the Arctic, perhaps rendering the gas line uneconomic.
As I said before that we are literally swimming in crude oil amid high inventory; but when it comes to natural gas, “drowning” would be a more appropriate description. While crude was hammered by China’s efforts to curb inflation, natural gas has an even bigger problem--nowhere to go--since it is region bound, and not as widely traded.
Some industry experts estimate that gas rig count needs see as much as 20% drop--to around 750—from the current 936 (as of Nov. 19) in the next 12 months just to keep production from growing. [Red bold emphasis added.]
[Gazprom] has acknowledged in word and deed that the shale revolution in the U.S. has already derailed some big plans, and the extension of that revolution could truly rock Gazprom’s world, and not in a good way. So the company has every incentive to play skeptic in the hope that this will slow down the shale juggernaut–and every sentient being should discount its skepticism as heavily as the market discounts its stock price. Indeed, Gazprom is actively looking to get into shale plays in the U.S. At the very least, this indicates that it (quite sensibly) wants to learn more about the details of the technology and the performance of shale plays so that it can plan accordingly. Alternatively, it could indicate that the company knows very well that shale is for real, and wants to get into the game. Either way, it belies its skeptical public statements.
But the U.S. experience is one in which shale has completely demolished the conventional wisdom about the future of the North American gas market in a period of less than 4 years, and which has made earlier major investment plans based on this conventional wisdom costly failures (e.g., LNG import terminals in the U.S.–shed a tear for Cheniere; Gazprom’s abortive plans to export LNG to the U.S.). This should make everybody everywhere extremely chary about entering into expensive long term commitments. There is a real option value here–a value to waiting–and greater uncertainty actually makes that option to wait more valuable.
This extension bid — the fifth requested by the company this year — was prompted by the company’s failure to renew its option on 330 acres of Red Beach property, where it wants to locate the LNG facility.
Calais LNG has had an option on the land for five years and has renewed it several times before, company spokesman Ian Emery said this week, but because the company is currently being sold, funding is an issue.
Webmaster’s Comments: "The company is currently being sold" appears to be myth. The company has been unwilling to confidentially inform the BEP of names of potential buyers.
Casey said the city’s fought the LNG terminal for years and absorbed the legal costs. She backed the Save the Bay effort as a way of “reaching out” to Rhode Island communities that also would be affected by the terminal.
The company is instead preparing a report detailing the hazard zone around the truck-loading facility itself on Elba Island, which was among the data requests made by federal regulators. No such analysis is required along the route by any state or federal agency or any local ordinances.
It's true that U.S. regulations don't require a "thermal exclusion zone" around an LNG trucking route yet, but European nations do, Watson said. Their standard would produce an exclusion zone of about 2,400 feet around the route, Watson calculated. [Red bold emphasis added.]
[SPB webmaster's note: This Russian article's sour-grapes propaganda is amazingly reminiscent of the Soviet era.]
A new technique that tapped previously inaccessible supplies of natural gas in the United States is spreading to the rest of the world, raising hopes of a huge expansion in global reserves of the cleanest fossil fuel, writes New York Times in 2009. Over the past three years, American production has soared. This year, the US overtook Russia to become the world’s biggest gas producer for the first time in a decade. The result is that the shipping terminals that the US built to receive liquid natural gas from overseas are now lying virtually empty, reported Financial Times.
In mid-April 2010, US Department of Energy announced [SPB webmaster's note: In the original article, the word "announced" is a link that goes to an RBC Daily article — in Russian] that the US had exaggerated their gas development volumes. The gas companies speculated around shale gas to increase their capitalization.
There are different estimates on extraction of coal bed methane and shale gas. I must say that there are some very serious problems associated with the extraction of those, says Sechin. [another link to a Russian language article] Their solutions will largely influence the prospects for this unconventional source of gas. And it is only time and accumulation of experience that will show us if these over-optimistic expectations are justified. [The previous sentence is self-contradicting; the categorization of being "overly-optimistic" is not evidenced, but requires time and experience to determine.]
24 November 2010
At this time of Thanksgiving we can be grateful that a tectonic shift in America's dependence on imported energy is beginning to take hold. In the last weeks a number of major events have taken place that are beginning to shift the balance of energy in significant ways.
Major oil companies such as Exxon, Shell, Chevron and myriad other foreign entities have joined American gas producers such as Chesapeake Energy to invest tens of billions of dollars these past years to develop a stake in what is becoming a treasure trove of natural gas ranging from Texas and Louisiana to the vast Marcellus field of Western Pennsylvania, Ohio, West Virginia and upstate New York. With new drilling techniques the proven gas reserves of the United States have skyrocketed from bare subsistence levels by a factor of five and counting, with the shale play still in its infancy. It has turned a market of shortage with circa $14 MMBTU prices quoted on the NY Mercantile Exchange in 2008 to a market of product glut, currently hovering around $4 MMBTU. At that price natural gas delivers a BTU equivalency comparable to that of oil priced in $20/barrel range. Today oil is selling at $80 plus/barrel.
During the past several years, it has become patently obvious that new technology and the emergence of resource plays have led to enough natural gas to supply the U.S. at current consumption rate for a century—at least.
[A]lthough the U.S. has one of the largest gas-supply infrastructures of any nation, developers are starting to see the need for more. The question of when, where and how much storage is needed is yet to be answered.
North American plans for exporting unconventional gas as LNG are rapidly gaining traction, although governmental authorizations are still required and first exports won’t take place before 2015. Following in the footsteps of the US’ Cheniere Energy and Canada’s Kitimat LNG, Australia’s Macquarie Group last week announced plans to convert its Gulf Coast Freeport LNG regasification terminal into a bidirectional facility that could also export liquefied domestic gas.
Opponents of the proposed liquified natural gas terminal near Calais in Washington County say they're disappointed at what they describe as the latest stalling tactics from the company behind the project. Calais LNG on Tuesday submitted a letter to the Board of Environmental Protection asking for a further seven-and-half weeks to sort out a couple of key problems, including how the project will be funded and where it will be sited.
It recently came to light that Calais LNG no longer has the option to buy most of the land on which it was proposing to build the 330-acre, billion-dollar distribution terminal. This comes as the company also tries to secure new financial backing for the project after the original investors jumped ship in July.
"They've lost financing. That we all knew from last summer. They've now lost the option over the land on which they intend to build," says Ronald Shems, attorney for Save Passamoquoddy Bay, one of groups opposing the LNG terminal.
"The frustrating thing here is that there's a real level of deceit in not disclosing the fact that they didn't have title to the property--back on the September 15th hearing this was never mentioned," [attorney Jane West of the Conservation Law Foundation] says. [Red, yellow & bold emphasis added.]
Calais - The company that wants to build a $1 billion liquefied natural gas terminal in Calais says it didn't renew an option to buy a major piece of property for the project because it's trying to secure a new investor.
The owners of two-thirds of that land say on September 1st, Calais LNG lost the rights to buy or use the property when the company didn't extend a purchase agreement for it. [Red, yellow & bold emphasis added.]
Weaver's Cove Energy asked a US Senate subcommittee this week to reject legislation intended to kill the proposed liquefied natural gas terminal by cutting off federal funds for the permitting process.
[Weaver's Cove CEO Gordon Shearer] said attempts to kill Weaver's Cove ignore the facility's potential to meet the region's energy demands, reduce high energy prices, create jobs and generate taxes for nearby communities.
Webmaster’s Comments: Shearer's claims that another LNG import terminal will solve energy demand and prices are unsupportable; existing New England LNG import terminals are running well below capacity. Furthermore, due to the nation's 100-year natural gas glut, prices are low. Imported LNG is frequently more costly, and is unquestionably more polluting, due to the extra energy-intensive steps required to liquefy, transport, and regasify it.
The project, a proposed import and re-gasification terminal on the banks of the Taunton River, has drawn criticism from some local and state officials who say establishing such an LNG facility near a densely populated urban area like Fall River is too dangerous.
…El Paso Gas asked federal regulators to "expedite" its trucking application while keeping city officials in the dark about its disaster preparedness plans for the increase in hazardous cargo - in a typical workday, an average of one LNG truck every 8 minutes - proposed for already overburdened streets.
[A]n LNG accident on DeRenne Avenue that required evacuation-a one-mile radius is standard protocol could shut down Savannah's two medical centers as well as nursing homes, schools and hotels, not to mention residential neighborhoods. El Paso spokesmen have been mum on defraying the costs of such dislocations, compensating businesses or assisting those evacuated.
Strict federal regulations govern the security of LNG tankers that off-load at Elba Island and the storage facility itself, but no such protection applies to trucking major quantities of gas. El Paso's public silence only underscores the responsibility of city and county leaders to spotlight the problem. [Red emphasis added.]
Kent Harrington is a retired senior CIA officer and an international consultant with experience in disaster preparedness and crisis management. He lives in Savannah.
Jamaica is looking to significantly cut the use of imported oil by more than 60 per cent over the next 20 years, with a greater percentage of energy needs to be met from renewable sources and liquefied natural gas.
Lamenting that the country relies on oil imports for more than 90 per cent of its total energy consumption, Mr. Vidal said biofuels can increasingly assist in satisfying the island's energy needs while reducing dependence on fossil fuels and thereby providing a higher degree of national energy security.
A unit of state-owned China National Petroleum Corp [CNPET.UL] expects to begin work in early 2011 on the project that will more than double the refinery's capacity to 150,000 barrels daily and include construction of a liquefied natural gas terminal.
The conservation group Columbia Riverkeeper last year successfully appealed Clatsop County's approval of the Bradwood Landing LNG terminal East of Astoria. Those LUBA appeals delayed and were ultimately a factor in killing that project.
The conservation group and its landowner allies n the Northwest Property Rights Coalition are now following a similar strategy to fight the proposed Oregon LNG terminal in Warrenton, and its associated pipeline. About 41 miles of the pipe run through Clatsop County, which conditionally approved the project earlier this month.
[T]he North Spit plant's natural gas wouldn't come from Jordan Cove Energy Project LP's proposed liquefied natural gas terminal. It would come, instead, from Coos County's own underutilized 12-inch pipeline.
23 November 2010
HOUSTON (Dow Jones)--Exxon Mobil Corp said Monday it has suspended plans to build a floating liquefied natural gas import terminal off the New Jersey coast due to changes in the outlook for natural gas supply and demand.
"The natural gas supply and demand outlook for the region has changed since the BlueOcean Energy project was launched in 2007," Rachael L. Moore, a company spokeswoman said in an email. [Red bold emphasis added.]
The plan marks an about-face for Freeport LNG, which just two years ago built an LNG import terminal in Texas, and highlights the massive change brought about by increased unconventional gas production in the United States.
It is the second LNG production plant proposed in the United States this year, following Cheniere Energy's similar plan, announced in June, to build a liquefaction plant at the site of its LNG import terminal at Sabine Pass, Louisiana.
The construction of LNG export plants is a total reversal for the US natural gas market, where several import facilities were built in anticipation that the United States would become a major LNG importer in the coming decades.
While forecasts that natural gas prices will remain relatively low in the U.S. do not bode well for import terminals, the price differential has opened up an opportunity to make the U.S. a leading exporter of natural gas.
“Recent developments in shale gas technology have transformed the U.S. gas market. The U.S. has developed significant natural gas resources and is able to meet projected domestic demand with a surplus for a long time to come,” said Nicholas O’Kane, Senior Managing Director and Global Head of Macquarie Group’s Energy Markets Division.
The Freeport terminal, which opened on the Texas coast in 2008 to import liquefied natural gas from other countries, has already added the capacity to ship some of that LNG back overseas because of overproduction of the fuel in the U.S.
But adding the capacity to liquefy U.S.-produced natural gas for export shows just how deep the country's natural gas glut has become, thanks to the widespread success of prolific shale formations from Texas to New York.
A $2 billion liquefied natural gas export terminal on the Texas coast, proposed by Macquarie Group Ltd. and Freeport LNG, will be able to take advantage of the current low natural gas prices, produced by surging supply driven by such formations as North Texas' Barnett Shale, to export U.S. gas overseas.
Spending billions to export U.S. natural gas represents a marked turnaround from conventional wisdom of less than a decade ago, when it was assumed that the nation would need to import huge supplies of foreign gas to meet demand. Energy companies plowed billions into coastal facilities designed to import liquefied natural gas, or natural gas that has been chilled to about 260 degrees below zero.
Smith said Freeport's gas will be able to compete with supplies from the Middle East and Africa because of low U.S. prices. Most of Freeport's supplies may go to Asia, with Europe as the second-largest customer base, Smith said. The project may also send gas to South America or the Caribbean, he said.
Also Monday, Exxon Mobil Corp. said it put on hold plans for a floating liquefied natural gas import terminal off New Jersey, citing changes in its outlook for fuel supply and demand in the region. [Red bold emphasis added.]
The LNG tanker Maersk Meridian delivered an initial shipment of the fuel to the Isle of Grain terminal, east of London, from the Sabine Pass terminal in the U.S., National Grid Plc said Nov. 19. The fuel had been reloaded at the U.S. terminal, JPMorgan Cazenove analyst Fred Lucas said in a report dated yesterday. [Red bold emphasis added.]
Deadline: Regulator warns company it only has until Wednesday to sort out problem or its application will be in jeopardy
On Nov. 18, Maine's Board of Environmental Protection received a letter that raises new questions about the viability of Calais LNG's proposed terminal and pipeline. That letter, sent by the owners of the land that was to house the LNG terminal and pier, notes that Calais LNG failed to exercise or renew its option to purchase agreement on the land. In other words, as of Sept. 1, Calais LNG lost its right to use or purchase the 250-acre parcel of land for the proposed LNG facility.
In a subsequent letter to Calais LNG, dated Nov. 19, the board's chairperson, Susan Lessard, warns that the latest obstacle could derail the project. "An applicant must maintain sufficient title, right or interest throughout the entire application processing period," wrote Lessard, quoting her department's rules.
Back in July, the main financial backer [Goldman Sachs' subsidiary GS Power Holdings] stepped away from the terminal and pipeline project, leaving organizers chasing new funding leads. [Red, yellow & bold emphasis added.]
Note: The article cited below is not available on the Bangor Daily News website as of the Nov 23 SPB news posting.
CALAIS - Calais LNG has until Wednesday to show why its pending applications for a liquefied natural gas facility in Red Beach should remain viable since it has lost its option on the land where the facility would have been located.
Having and maintaining rights to the property named in pending applications is a requirement of the Maine Board of Environmental Protection approval process.
CLNG spokesman Ian Emery said late Monday that the company will request an extension and there is no intent to abandon the project. He added, however, that financial restructuring has left the company scrambling to come up with additional money to renew the lease.
According to the letter to BEP from Carothers and Roberts, the company's option expired Aug. 31 and therefore, "Calais LNG Project has lost any rights to use or to purchase our property." The couple said they also have no new or existing contract with CLNG and since the entire project "relies almost solely upon the use of our land," Carothers and Roberts requested BEP either postpone or suspend the company's applications. [Red, yellow & bold emphasis added.]
The company hoping to build a liquified natural gas terminal near Calais in Washington County has until Wednesday to convince the Maine Board of Environmental Protection that the project should go ahead. This follows relevations that the company, Calais LNG, does not own a portion of the land on which it plans to build the terminal, and no longer has the right to purchase it.
The company currently has a December 1 deadline to secure financial backing for the project. Failure to meet that deadline will likely force the company to withdraw its application with state environmental regulators. In the meantime, another, perhaps even more pressing problem has arisen.
"They do not have proper title for the proposed LNG plant, and so essentially they're not going to be able to build the entire facility," said Jane West, a staff attorney with the Conservation Law Foundation, an environmental advocacy group which opposes the planned LNG terminal.
Earlier this month the U.S. Parks Service submitted comments to FERC outlining a number of environmental concerns with the planned Weaver's Cove LNG import project. The filing states that the Environmental Impact Statement prepared for the project in 2005 is "fundamentally out of date," noting that "critical factors were not evaluated in that document and that other factors have changed since that review was conducted." [Red emphasis added.]
Weaver's Cove LNG submitted a Request for Rehearing addressing FERC's recent findings that project developers have not satisfied thermal exclusion zones required for the project. Weaver's Cove LNG argues that FERC erred by concluding that the Commission could not determine the true owner of the so-called "Wedge Lot" parcel of property that has prevented Weaver's Cove LNG from securing control over the required exclusion zone. [Red emphasis added.]
22 November 2010
HOUSTON -(Dow Jones)- The U.S. Department of Energy said Thursday [2010 Sep 9] it has granted approval to Cheniere Energy Partners LP's bid to export liquefied natural gas produced in North America from a terminal in Louisiana.
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.
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. [Red bold emphasis added.]
The companies said Gulf Coast LNG import terminals are currently significantly underutilized due to low natural-gas prices in the U.S. relative to global LNG markets. As such, "the price differential has opened up an opportunity to make the U.S. a leading exporter of natural gas."
Freeport LNG--whose investors include Dow Chemical Co. (DOW) and ConocoPhillips (COP)--expects to file for an export license with the Department of Energy in December and shortly thereafter start the approval process with the Federal Energy Regulatory Commission. The new facilities are currently expected begin operation in early 2015. [Red bold emphasis added.]
The announcement by Macquarie's North American energy marketing and trading arm of the addition to an existing Texas import facility comes less than two weeks after a subsidiary of Cheniere Energy said it was working toward a deal to supply liquefied natural gas from its Sabine Pass terminal in Louisiana to one of China's largest independently owned natural gas companies.
The move further underscores the revolution that has shaken up North American natural gas production in the past decade, as producers unleashed vast onshore gas reservoirs trapped in rock formations called shales, creating a glut of supply in the US.
"While forecasts that natural gas prices will remain relatively low in the US do not bode well for import terminals, the price differential has opened up an opportunity to make the US a leading exporter of natural gas," a Macquarie statement said. [Red bold emphasis added.]
The companies said import terminals of Gulf Coast LNG are currently underutilized due to low natural-gas prices in the U.S. relative to global LNG markets, creating "an opportunity to make the U.S. a leading exporter of natural gas." [Red bold emphasis added.]
NEW YORK – Freeport LNG and Macquarie Group aim primarily to supply high-paying Asian markets from their proposed liquefied natural gas export plant in Texas, plans for which they announced late on Sunday.
"We have a (natural gas) resource that will allow us to have ample reserves for US needs for the next hundred years," Freeport LNG chief executive and chairman Michael Smith said during the same interview. US gas producers have shown interest in supplying to the project, he said.
Five-plus years ago, there were widespread predictions that U.S. natural gas supplies would prove insufficient to meet rising demand. Therefore, America would have to rely on more imported foreign gas, transported here in liquid form via tankers and then turned backed into a gas at liquefied natural gas (LNG) facilities on U.S. coasts.
But that [was] before domestic natural gas production and long-term reserves ballooned as a result of big "unconventional" gas plays, such as the Barnett Shale in North Texas, that benefited from advanced horizontal drilling and hydraulic fracturing techniques. Now, there are forecasts of an ample domestic supply for perhaps 100 years.
That explains Monday's announcement by Macquarie Group Ltd. and Freeport LNG of plans to build a new $2 billion LNG export terminal near Freeport on Texas' Gulf Coast, where an underused LNG import terminal already exists. [Red bold emphasis added.]
Yet another bump in the road for the Calais Liquefied Natural Gas Terminal project. The project has lost its right to the 250-acre parcel of land required for the project pushing the LNG proposal to the close to collapse.
Calais LNG has failed to renew it's option to the purchase agreement with the Board Of Environmental Protection and the land owners are asking the board of environmental protection to suspend the application. [Red, yellow & bold emphasis added.]
With respect to shale gas production in the U.S., which the author hypes along with LNG, U.S. gas production in 2009 was still four percent below the 1973 gas production peak. The U.S. is still a net gas importer via pipeline from Canada and via LNG from many countries. Despite the hype of people like Aubrey McClendon, the CEO of shale gas producer Chesapeake, who was recently featured on 60 Minutes, and who testified before Congress that U.S. gas production could increase by 50 percent or more in the next decade, the realities of shale gas make this unlikely. Shale gas wells have very high decline rates, between 65 and 85 percent in the first year, are high tech and hence expensive, utilize large amounts of water, and have environmental costs that are now becoming evident. The EPA has begun an extensive investigation of the environmental issues surrounding “fracking,” upon which shale gas production depends.
21 November 2010
The U.S. may have long since reached its peak production of petroleum. But technological advances in drilling and extraction have led to a new boom in another fossil fuel: natural gas. More and more companies are using and perfecting the controversial method known as fracking—deploying ultrahigh--pressure water streams to blow apart rocks underneath the earth and release natural gas. The upshot: America’s reserves of natural gas, which burns cleaner and produces fewer emissions than coal, have risen 30 percent in the last few years. “Shale gas has brought in a flood of supply, and the question is now, what do you do with it?” says Bill Cooper, president of the Center for Liquefied Natural Gas in Washington, D.C. Earlier in the decade, companies began to build facilities that would allow for the importation of liquefied natural gas (LNG). Now the U.S. may have the capacity to become an exporter of natural gas.
…Cheniere Energy Partners this summer applied to the Department of Energy to add liquefaction capabilities to its Sabine Pass LNG facility in Louisiana, just over the Texas border. Earlier this month Cheniere signed a memorandum of understanding with a Chinese firm, ENN Energy Trading, in which ENN “intends to contract 1.5 million tonnes per annum…of bi-directional LNG processing capacity.” Translation: if Cheniere gets the necessary approvals and installs the necessary equipment, the Chinese company will consider importing natural gas. The Department of Energy and the Federal Energy Regulatory Commission are reviewing Cheniere’s proposal. If things go according to plan, Cheniere could be piping gas onto slow boats to China in 2015. [Red bold emphasis added.]
Another challenge to the gas industry is shale gas production in the United States, and the negative impact of this new type of gas in the international gas trade, as it has led to short-term reductions in gas prices, and has given the United States the opportunity to begin exporting gas to Europe, having been a gas importing country itself until recently. [Red bold emphasis added.]
The project, which could cost up to $2bn, highlights how gas extracted from US shale has overturned the country’s import requirements for liquefied natural gas. Just a few years ago, developers were building LNG import terminals to supplement flagging domestic supplies. There are now 10, with two more under construction.
Projects, such as Freeport and Sabine, could have repercussions for global LNG markets. The shale boom has made the country the world’s biggest natural gas producer, with 57bn cu ft a day of output, according to Nikos Tsafos of PFC Energy, the consultancy. If the US exported just a 10th of its gas last year, he says, it would have been the world’s top LNG exporter. [Red bold emphasis added.]
… The problem for New England is that the pipelines that could transport this natural gas to the region are at maximum capacity from November to March. Even if we do in fact have a 100-year supply of natural gas in the U.S., there is no way to bring this gas to New England when we need it most.
… The only solution to meet incremental gas demand in New England and Maine is with a new land-based LNG facility. [Bold brown emphasis added.]
Webmaster’s Comments: Girdis does not want the public to know that Canaport is operating well below capacity since there is not sufficient demand in Maine and New England. If Girdis were correct, then Maine would need more Peakshaving storage, not an import terminal.
Webmaster’s Comments: The proposed Liberty LNG receiveing facility would be around 17 miles offshore away from civilian populations; however, there is no need to import the LNG due to the US natural gas glut.
The American Press says the Lake Charles port bought 200 acres in Cameron Parish near Hackberry to dump sediment dredged from the Calcasieu Ship Channel, leasing part of the property for a liquified natural gas plant.
Khaalis Rolle told Tribune Business that the Bahamas needed to stop "playing and toying" with industries such as liquefied natural gas (LNG), which could provide totally new avenues of economic opportunities, and focus just as much on the potential benefits they might bring as opposed to the negatives.
"There are risks associated with LNG, but those risks, particularly in this area, are minimal," Mr Rolle told Tribune Business. "We need to stop playing politics with these things, and make some hard decisions."
Webmaster’s Comments: Ocean Cay, the man-made island that has been considered for an LNG terminal, consists entirely of industrial use, and appears to be over seven miles away from the nearest island. There are environmental concerns regarding the required undersea pipeline(s) delivering natural gas to Bahamian islands and Florida.
But no matter how well PG&E behaves now (and it has yet to clean up its pipeline-maintenance act), one long-term consequence of San Bruno will almost certainly be the death of any and all plans to bring more liquefied natural gas (LNG) to California.
Even before San Bruno, proposals to build other receiving terminals in Humboldt County, Ventura County, Long Beach, Mare Island in Vallejo and near Camp Pendleton in San Diego County had all died or atrophied. But plans for two terminals in Oregon, at Astoria and Coos Bay, are still alive.
And the questions about PG&E's maintenance of its existing pipeline network that arose immediately after the San Bruno disaster and still remain have done nothing but harden opposition to building anything that will tie into PG&E's network.
19 November 2010
The shale boom has made some analysts predict that no more LNG capacity will be built in the US. On the public front, New Jersey and New York politicians have fought the terminals. [Red bold emphasis added.]
Webmaster’s Comments: The scrapped project was known as Blue Ocean Energy LNG.
U.S. gas prices have fallen more than 30 percent since the beginning of the year, pressured by a surge in North American gas production which has also reduced U.S. LNG imports to minimal contracted volumes, while UK prices have been rising since September. [Red bold emphasis added.]
Re-exports offer idle US terminals the chance to turn a profit by sending surplus LNG to higher-paying markets in Asia or South America, but shipping contraints and cooling demand in those markets at the time made Europe the next best destination.
US re-exports are growing in number, with just Sabine Pass and the Texas-based Freeport currently holding the right to do so. Sempra's Cameron terminal is awaiting regulatory approval to start re-exporting.
Cheniere Energy, Inc. (LNG) delivered the first cargo in 50 years of US LNG to the UK. This is the third LNG cargo to be shipped to Europe after a decision by the US government to allow re-export of LNG cargoes from the US. Cheniere shares rose more than 27% today on more than five times normal volume. [Red bold emphasis added.]
Members voted 354 to 25 in favour of a lease agreement that will allow reserve land to be used for the construction and operation of the proposed $3 billion Kitimat LNG terminal. The project will allow the province to export natural gas to overseas market by tanker.
18 November 2010
U.S. output is surging as companies increase drilling for gas from shale formations. Marketed production of the fuel will rise in 2010 to the highest level in 37 years, the Energy Department in Washington said Nov. 9. U.S. imports through pipelines, 99 percent of which come from Canada, will fall 11 percent to a net 7.33 billion cubic feet a day this year compared with 2008, the lowest amount since 1994, it said.
“Imports from Canada will likely see further deterioration, given the simultaneous growth of low-cost U.S. shale production and large-scale pipeline projects that will enable these supplies to compete head-on with Canadian production,” said Teri Viswanath, a director of commodities research at Credit Suisse Securities USA in Houston.
Rising U.S. production is encouraging energy companies to turn to export markets for customers, requiring the construction of liquefaction plants to cool the fuel into a liquid that can be put onto ships.
Second, the gas industry appears to be in the midst of a wide-ranging structural transformation due to the large-scale development of unconventional sources in the United States -- an event dubbed the "shale revolution" by industry analysts. This has led to a global gas glut, whose most significant consequence for Europe has been the diversion, especially by suppliers in Latin America and Qatar, of liquefied natural gas (LNG) deliveries initially meant for the U.S. market. [Red bold emphasis added.]
"…Natural gas is and will remain a piece of our state's energy puzzle, but liquefied natural gas has not been shown to be a viable and needed piece of New Jersey's energy plan, nor will it necessarily result in lower price for New Jersey families," said Governor Christie. [Red bold emphasis added.]
Domestic production was off by 0.7 percent, accounting for the bulk of the decline. One contributing factor was the shut-in of the Independence Hub in the Gulf of Mexico over the weekend for planned maintenance. The facility typically flows about 0.5 Bcf per day and resumed operations on Tuesday, November 16. Other contributing supply sources also decreased during the week. Canadian imports were off by 11.1 percent and remain 20.3 percent below year-ago levels. Things were no better in the LNG arena where imports remained 25.7 percent below last year. LNG sendout fell below its 5-year (2005-2009) minimum and last Wednesday reached a new recorded daily low, since BENTEK started tracking the volumes. [Red bold emphasis added.]
McClendon told the prime-time audience that US shales hold the natural gas equivalent of two Saudi Arabias worth of oil while veteran correspondent Leslie Stahl failed to ask him how that factoid translates into refined gasoline for our cars. [Red bold emphasis added.]
Webmaster’s Comments: McClendon was apparently referring to T. Boone Pickens' plan to fuel heavy trucks with natural gas, reducing dependence on gasoline and OPEC.
The shale gas revolution in the US has unexpectedly pushed the nation to the top of the gas producers' league and pushed LNG targeted at the US into other markets, especially Europe. [Red bold emphasis added.]
Damien Gaul, an economist and LNG specialist at the U.S. Energy Information Administration, said the decision to cancel the $750 to $900-million Maple LNG terminal planned for Goldboro – about 200 kilometres east of Halifax – was “not really that surprising.”
“The market opportunity is no longer as strong or as big as it was in the past,” he said in a phone interview. “There’s enough capacity on the East Coast of North America to handle our expected imports of LNG for the next couple of decades,” he added, noting that forecasts for large increases in LNG shipments to North America turned out to be wrong. [Red bold emphasis added.]
The revelation by the IEA should have significant implications for Jamaica, as the country seeks to shift a significant portion of its energy consumption to that source in a bid to lower increasing costs and increase the viability of local businesses to expand and generate new employment. Of added interest is the projection that the United States, Jamaica's largest trading partner, might become a net exporter of gas soon.
The story notes that "even rising global gas use, which will increase faster than any other fossil fuel, won't overcome a production surge that is emerging from shale gas resource development in the United States, and in Canada."
Recent technological developments have facilitated the extraction of gas from shale reserves that hitherto were uneconomic to mine, greatly increasing the availability of gas. "Already, there are some signs of that change in the works. In the past month, more than 19 billion cubic feet of liquefied natural gas were shipped out of the Gulf of Mexico, about half the amount that will be imported to the region for the month of November," according to Waterborne Energy, a Houston research firm. Given that just a year ago LNG terminals in the region didn't have the ability to re-export the LNG they took in, this is a major turnaround.
As of late last week three tankers were waiting in the Gulf of Mexico outside Sabine Pass to load up with LNG that had previously been offloaded at Sabine Pass, Waterborne noted. [Red bold emphasis added.]
Some of the cargoes bound for Argentina and Brazil were sourced as re-loads in the United States. With increased domestic shale gas production and the attendant price slump on Henry Hub, the US Gulf region is rapidly becoming a filling station, where traders with demand elsewhere can purchase a cargo on an FOB basis either in Sabine Pass or Freeport. The number of applications for re-export licenses is growing fast as traders with capacity in the United States are looking to take part in the dynamic re-load trade, which was previously almost exclusive to importers at Belgium's Zeebrugge terminal. Some would argue that the United States could become a regional trading hub, creating extra levels of liquidity and flexibility in the Atlantic basin.
FERC requested additional information yesterday from Downeast LNG and Calais LNG addressing the U.S. Pipeline and Hazardous Materials Safety Administration's recent guidance on flammable vapor-gas exclusion zones.
Webmaster’s Comments: FERC's request indicates that Downeast LNG and Calais LNG still have not satisfied FERC technical requirements related to safety.
Webmaster’s Comments: Hess Energy is wasting millions on a project that violates LNG industry terminal siting best safe practices, and is unneeded surplus to grossly-overbuilt import capacity in New England and the US. (See LNG Terminal Siting Standards Organization for an abbreviated list of industry terminal siting best practices.)
"New Jersey opposes Liberty's proposed deepwater port, which is a crucial piece of their proposed project," Martin said. "Governor Christie has repeatedly expressed his steadfast opposition to LNG facilities off New Jersey's coastline, including his intention to use his veto authority under the Deepwater Port Act to prevent construction off our shore. Without the deepwater port, the onshore pipeline is a bridge to nowhere. Its potential environmental and economic impacts on New Jersey are unacceptable." [Red bold emphasis added.]
President Roger Whelan said in a telephone interview the submersible port 16 miles offshore Asbury Park, New Jersey, will weather low gas prices and hostile politicians because of: "location, location, location."
Webmaster’s Comments: Liberty Deepwater Port president Roger Whelan's problem is that his project has not been explained (and cannot be explained) in a way that shows it complements Marcellus Shale; it is an unneeded surplus to Marcellus Shale — even as indicated by the U.S. Energy Information Administration, and by Northeast LNG import data.
MARAD announced in today's Federal Register that it has determined that Liberty LNG's application to construct and operate a deepwater port offshore New Jersey contains the information necessary to begin processing the application. The next step is for the agency to hold public hearings on the project within 240 days and render a decision on the application within 330 days.
Texas-based El Paso Corp. has announced that it will sell its full ownership of Southern Liquified Natural Gas Co. - which owns the Elba Island LNG import terminal here - as well as its ownership of the El Paso Elba Express Co. to El Paso Pipeline Partners LP.
"This is basically a financial transaction in which earnings will now accrue to a different segment of the company," said El Paso spokesman Scott Langston. "As far as operations are concerned, there will be no changes in personnel or jobs."
Separately, NATS [subscription required] reported yesterday that a second commissioning cargo, carried aboard the Q-Flex class vessel Al Oariq, has arrived at the Sabine Pass waterway en route to the Golden Pass LNG terminal.
Investors in the proposed Jordan Cove liquefied natural gas terminal on Coos Bay's North Spit may know within 60 days whether they'll also build a natural-gas-fired power plant nearby, Jordan Cove's manager said Tuesday.
16 November 2010
With the gas glut turning into a more permanent energy fixture in North America, the market will progressively become (even more than currently) one in which production will primarily meet regional needs, with contract swaps acting to offset differences between regions.
Already in operation, Cove Point is the largest LNG facility on the U.S. east coast. As the need collapses for LNG imports into the United States – another result of our ongoing gas surplus – don't be surprised if this terminal begins reversing operations to export volume. This is tailor-made to provide a major outlet for additional production from the Marcellus. [Red bold emphasis added.]
A major opponent of the proposed Fall River LNG facility is appealing to Boston’s Fidelity Investments, State Street Corp. and Wellington Management to pressure Hess Corp. to drop its controversial development plan.
"Management has badly miscalculated its estimation of the time and expense required to obtain the necessary permits for this project, has misjudged how quickly competing projects would come on line, and underestimated the resolve of the citizens of Massachusetts and Rhode Island," writes Stone in his letter to Hess shareholders.
Citing a variety of permitting, political and economic reasons for abandoning their plans, Stone concludes, "In the parlance of the energy industry, Hess Corporation's Fall River terminal project is a dry hole. Your money is being wasted."
Save The Bay sent the letters to 68 people at 17 companies representing major shareholders at Hess. It also spend $6,600 for an advertisement bearing a version of the letter in the Wall Street Journal.
Jonathan Stone, Save The Bay's executive director, has previously worked as a portfolio manager and founder of a hedge fund. It is because of that background, he said, that he feels shareholders would want to know when management is spending their capital the way they should.
Webmaster’s Comments: Talk about bad luck… Hurricane Katrina damaged the in-progress construction, delaying completion. And now, the natural gas glut. Where will this terminal's LNG go, if not re-exported?
According to data released by the New York Times, in the past five years alone nearly 70 people have been killed and hundreds others injured in natural gas-related explosions. That number includes the more than 50 injuries and seven fatalities resulting from a late-September blast in San Bruno, California. Less than a week later, a similar explosion in Richfield, Minnesota, destroyed one home and damaged others close by.
Amazingly, a New York Times review of PHMSA [Pipeline and Hazardous Materials Safety Administration] data shows that a whopping one-third of the enforcement actions started in the past eight years are still pending, and that the number of fines issued by the PHMSA fell a staggering 40 percent between 2004 and 2009. Even some unresolved enforcement cases from the early 1990s have fallen through the cracks and have lingered open.
15 November 2010
EOG's Mark Papa says shale plays have permanently and dramatically altered US energy supply and security.
The true impact of unconventional drilling in unconventional rock formations is the most underreported event in the mainstream press today, according to Mark Papa, chairman and chief executive of EOG Resources Inc. The enormity of the boost to the US economy is entirely overlooked, he said.
"There is clearly sufficient North American gas supply to last for a bunch of years, 50 years at least. And there is clearly no need for us to import liquefied natural gas for multiple years to come."
"Talk about stimulus and ways to boost the economy," Papa said. "One of most significant ways the economy has been boosted is in not having to pay an extra $50 billion a year for energy." [Red bold emphasis added.]
Some projections show that Eagle Ford producers could give their gas away for nothing and still make a positive return on shale wells selling the liquids. Across the liquids-rich sections of this play, returns on drilling investment can be as high as 200% at $4 per million British thermal unit (MMBtu) gas, according to Colorado's Bentek Energy. The break-even gas price for such wells is an astonishing $2.04.
"Vera's persistence in ensuring that the decision-making process was open and responsive to the grassroots constituency resulted in a landmark ruling giving rights to tribal members themselves, not just the tribal governing body," added Houston. "This ruling, acknowledging that tribal people as individuals have standing, set an international precedent and gives voice to those whose concerns may otherwise be silenced."
Francis accepted the award "with great humility" and noted, "[Houston] said 'You should have a vision'. I would only add, not only should you have a vision. You need to hang onto it tightly because it's only when you lose sight and when we lose touch with vision, when inappropriate industrial complexes can be proposed for a pristine [and] a cultural and ceremonial gathering grounds, for lands that are attached to one of the largest Native American populations in New England, there's only in those kind of moments that that can be proposed."
In a letter to Quoddy Bay President Donald Smith, Dean White, the acting director of the BIA's Eastern Region, states that he has determined that he will not reconsider his April 23, 2010, decision that the lease was cancelled. Previous to that decision, White had issued in February a notice of lease violation to Quoddy Bay, asserting that Quoddy Bay's failure to make certain lease payments to the tribe and its failure to pursue a license from the Federal Energy Regulatory Commission constituted a breach of the lease. Quoddy Bay had been given 10 days to remedy or dispute the violation or request additional time. The BIA, though, did not receive a reply from Quoddy Bay, so White cancelled the lease. His decision could have been appealed to the Interior Board of Indian Appeals, but Quoddy Bay instead chose to write directly to the BIA seeking reconsideration of the decision. No appeal of the lease decision was filed, though.
Webmaster’s Comments: Quoddy Bay LNG has requested an Interior Board of Indian Appeals (IBIA) review of the BIA's cancellation of the lease. On November 1 the IBIA issued Docket Number IBIA 10-138 for that review; however, in its notice of docket creation, the IBIA notes that it did not receive a timely appeal from Quoddy Bay LNG. The IBIA has previously indicated that Quoddy Bay LNG has provided no evidence that it appealed the BIA decision in a timely fashion.
Note about IBIA Docket Proceedings: The Save Passamaquoddy Bay webmaster learned on November 15 that the BIA Office of Hearings and Appeals Interior Board of Indian Appeals does not post ongoing docket proceedings to an accessible website until the final decision. Only the final decision is posted to the publicly-accessible website.
Plus, any tribal government, member of a tribe, or the general public who is not a party to the proceedings, is required to file a FOIA* request to obtain proceedings information. In other words, the IBIA makes it as difficult as legally possible for the public to access these documents to which tribal members and the general public should have free access.
* FOIA — Freedom of Information Act.
El Paso Pipeline Partners LP (EPB) said Monday that it plans to pay $1.13 billion to El Paso Corp. (EP) for the remaining 49% interest in Southern LNG Co. LLC and El Paso Elba Express Co. LLC. The deal also includes an additional 15% interest in Southern Natural Gas Co.
After the transaction, El Paso Pipeline Partners will own 100% of Southern LNG and Elba Express and a 60% interest in Southern Natural Gas. El Paso Pipeline Partners will fund the deal with $415 million in cash from its flotation of common equity in September. It may also issue public securities and a promissory note to El Paso Corp.
The biggest uncertainty is that which hangs over the big gas pipeline project. Open seasons were held this summer for both competing projects, the TransCanada/ExxonMobil group and the BP/ConocoPhillips Denali pipeline.
Southcentral Alaska gas and electric utilities are exploring the feasibility of importing liquefied natural gas to Cook Inlet in an effort to be prepared if regional gas supplies continue to decline and a plant on the Kenai Peninsula that now exports LNG closes after a federal license expires in 2013.
ConocoPhillips and Marathon Oil Co., which own the LNG plant, were recently given a two-year extension of an LNG export license by the U.S. Department of Energy. The new expiration date is March 2013.
Webmaster’s Comments: The US Department of Energy has allowed the Kenai Peninsula LNG plant to export since the 1960s. Now that significant amounts of the domestic natural gas supply has been exported, Alaskans will have to import LNG to heat their homes — at a higher cost than domestic natural gas. How is that exporting decision by FERC in the public interest?
Forecasted imports of LNG average 1.23 Bcf/d in 2010, a slight decline from 2009 levels. Nevertheless, EIA expects LNG imports to grow slightly in 2011 to 1.32 Bcf/d, a 7% increase. On total natural gas consumption, the report projects increases of 4.6 % and 0.1% in 2010 and 2011, respectively. Moreover, consumption of natural gas in the industrial and electric power sectors make up the bulk of the year-over-year increase in consumption in 2010.
Webmaster’s Comments: A 10% increase in LNG imports would still maintain US average LNG imports at below 20% of capacity.
14 November 2010
The U.S. is starting to supply gas to Europe. The surplus of domestic production and the active procurement of LNG in Qatar allowed the country to re-export gas using the so-called arbitrage transactions which means transferring purchased gas to new buyers. The first gas transport will come to the UK this weekend.
The U.S. is the largest producer of shale gas in the world. In one year, gas production from unconventional sources, mainly from shale deposits, has jumped by 30 billion cubic meters. America's need in the imported liquefied gas has dropped sharply, and its price has dropped more than two-fold.
The closure of the U.S. gas market for imports hit the producers in other countries. In February of 2010, Gazprom has postponed the project for the production of LNG from the giant Shtokman field in the Barents Sea, including the fact that the U.S. target market is no longer in need of additional supplies. [Red bold emphasis added.]
"There is clearly sufficient North American gas supply to last for a bunch of years, 50 years at least. And there is clearly no need for us to import liquefied natural gas for multiple years to come."
… Assuming that gas prices are at least $2 lower than if the industry never learned to extract gas from shales, then U.S. consumers of natural gas benefit by some $50 billion less burden of energy cost.
Horizontal shale-gas drilling has "dramatically and permanently" changed the U.S. natural gas supply picture for a long, long time. Papa says he is not of the camp that believes this production is going away in five years because of high decline rates from shale-gas wells. "I've seen enough of the specificity of what EOG has in its inventory. What's happened is clearly a game changer." [Red bold emphasis added.]
[Red bold emphasis added.]
Capacity Expected Origin Terminal Maersk Marib 165,000 Nov. 10 U.A.E. Isle of Grain Al Gharrafa 216,200 Nov. 12 Trinidad Dragon 1 Al Mafyar 261,043 Nov. 13 Qatar South Hook 2 Al Ghuwairiya 257,984 Nov. 16 Qatar South Hook 2 Maersk Meridian 163,285 Nov. 18 U.S. IIsle of Grain Al Thumama 216,235 Dec. 9 Qatar Isle of Grain
Last month, Cheniere Partners received permission from the US Department of Energy to export LNG produced in North America from its Sabine Pass terminal. The company had already received permission to re-export imported LNG that it couldn’t sell.
The reason Cheniere Partners can’t sell imported LNG is because the US is awash with natural gas from the shale gas wells of Texas, Arkansas, Pennsylvania, and elsewhere. In late 2008, it appeared that both Cheniere Partners and Cheniere Energy might be headed for failure due both to the financial crisis and the booming supply of domestically-produced natural gas. [Red bold emphasis added.]
U.S. energy companies, before the shale gas boom changed everything, thought the U.S. would need to import natural gas. So the U.S. has about 10 LNG import terminals and two more in the works. Now, with a natural gas glut in the U.S., these terminals are pretty much useless.
[P]ut together Callahan's data on exports and imports with the glut in the U.S. and the lack of export terminals. I think it's pretty clear we'll see more export terminals in the U.S. It's too big of an opportunity to ignore. The U.S. could become the leading exporter of natural gas in the next decade. [Red bold emphasis added.]
In a Nov. 9 BDN article, Kevin Raye asserts, “common-sense solutions are what have been missing in Augusta.” He also said, “I intend to lead by example.” If those two statements are true, then Sen. Raye needs to get off the LNG train.
All applications now before federal and state regulatory boards are stalled due to lack of completion on the part of the developers. There is ample evidence of a domestic natural gas supply for the next 100 to 200 years; in other words, there is a natural gas glut. [Red bold emphasis added.]
Webmaster’s Comments: The US is so flush with its own domestic supply of natural gas, imported LNG to the US is now being re-exported from two LNG import terminals, and a third import terminal has obtained a FERC permit to construct an LNG liquefaction and export terminal, and plans to export US-souce LNG to China for 20 or more years.
Downeast LNG and Calais LNG began their projects 5½–8½ years too late. There is already a gross overbuild of LNG import terminals — so much so that terminals are operating at a mere fraction of their capacity. Even the two new terminals offshore from Gloucester, Massachusetts, are running at below 20% of capacity. The projects simply are not needed.
The corporate retreat, which cost a fraction of the $1.5 billion Sempra spent on its LNG plant 15 miles north of Ensenada, is now front and center in a whistle-blower lawsuit by a longtime Sempra executive.
“Michelon repeatedly questioned the propriety of the manner in which the CEO was directing Casa Azul, as well as the manner in which Casa Azul would be used for nonbusiness related purposes, but was repeatedly told that he was to stop asking such questions if he wanted to keep his job,” according to a complaint filed Nov. 4 in San Diego Superior Court.
The utilities are regulated by the California Public Utilities Commission, which told The Watchdog it will track the litigation to see whether the utility wrongly billed customers for costs associated with Casa Azul.
Michelon provided the Union-Tribune with copies of e-mails that indicate the company directed him to "have cash" to pay Mexican authorities who were evicting a man from land to which he claimed ownership -- land now occupied by the massive Costa Azul project.
Rodolfo Michelon, terminated in March after five years as controller for Sempra Global in Mexico, said he was directed to bribe government officials, approve improper spending and overlook his ethical obligations as a certified public accountant.
“Sempra regularly required Michelon to transfer funds, and account for illegitimate expenditures that boiled down to bribes of government officials,” states the wrongful-termination suit, filed in San Diego County Superior Court.
Michelon's lawsuit is the second high-profile complaint related to the terminal. In the first, Sanchez Ritchie, a rancher who lived nearby, said he had been improperly evicted from his land to make way for the terminal. Property ownership remains in dispute.
“Mr. Michelon’s claim that utility ratepayers had to pay directly or indirectly for the construction of Casa Azul is patently false. Customers of San Diego Gas & Electric and Southern California Gas Co. – Sempra Energy’s two California utilities -- had no part in the funding of the facility.
“Mr. Michelon also has made unfounded allegations about bribery in Mexico that are absolutely false. The company has complied with all applicable laws in its business dealings on both sides of the border.
“Responding to allegations made by Mr. Rodolfo Michelon, earlier this year, the Sempra board of directors ordered a thorough and independent investigation into this matter. The Sempra board is satisfied with the results of the independent investigation that the allegations made by Mr. Michelon are without merit.”
Although past exploration in the region focused primarily on finding oil, large volumes of gas were also encountered during that drilling effort. A resulting excess supply of stranded natural gas drove the construction of LNG and fertilizer plants at Nikiski on the Kenai Peninsula and has enabled the residents of highly populated Southcentral Alaska to enjoy cheap gas for heating and electricity generation.
Industrial facilities such as the Nikiski LNG plant underpin the Cook Inlet gas industry by providing a large and relatively stable market for the gas. And, as part of the state’s deal with the LNG plant owners at the time of the LNG export license renewal, the owners agreed to allow gas producers other than themselves to supply some of the gas used by the plant.
Local gas and power utilities are the other main purchasers of Cook Inlet natural gas. But these utilities constitute quite a small market, with a gas demand that fluctuates widely between warm summer days when gas usage is relatively low, to frigid winter conditions when gas usage, especially for space heating, soars.
"Lets bring together everybody from energy developers, to home owners to ranchers to environmentalist folks," said Wyden. "And that's why I feel so strongly about getting it out of Washington D.C., where these special interest lobbies for oil and gas get to call all the shots, and getting it home." [Red emphasis added.]
12 November 2010
A subsidiary of Cheniere Energy Inc. ( LNG | PowerRating) said Thursday that it is working toward a deal to supply liquefied natural gas from its Sabine Pass terminal in Louisiana to one of China's largest independently owned natural gas companies.
Cheniere originally built its Sabine Pass terminal, the largest regasification facility in the world, with the aim of importing LNG to the U.S. But the glut of natural gas that has come from domestic shale formations in recent years has turned the U.S. natural gas market upside down--and seems to make massive importation of LNG unnecessary.
The U.S. Department of Energy granted Cheniere permission in September to begin annually exporting up to 16 million metric tons of liquefied gas, culled from shale formations in Texas, Oklahoma, [and] Arkansas … through the Sabine Pass terminal. However, the company needs to build the exporting infrastructure first. [Red bold emphasis added.]
Cheniere Energy Partners, L.P. announced today that its subsidiary, Sabine Pass Liquefaction, LLC, has signed a memorandum of understanding ("MOU") with ENN Energy Trading Co., Ltd., under which ENN Energy Trading intends to contract 1.5 million tonnes per annum of bi-directional LNG processing capacity at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.
Under the MOU, ENN Energy Trading and Sabine have agreed to proceed with negotiations of definitive agreements for ENN Energy Trading to contract capacity for a primary term of 20 years with mutually agreed extension terms, subject to certain conditions precedent, including but not limited to Sabine's receipt of regulatory approvals and making a final investment decision to construct the liquefaction facilities, and ENN Energy Trading reaching a final investment decision to construct an LNG receiving terminal.
ENN Energy Trading is a subsidiary of ENN Energy Holdings Ltd. ("ENN Energy") (2688.HK) (formerly known as XinAo Gas). ENN Energy is one of the largest independently-owned natural gas operators in the People's Republic of China.… [Red bold emphasis added.]
Cheniere is planning to take a final investment decision (FID) for its proposed liquefaction facility at Sabine Pass in the US between the summer and autumn of 2011, Jean Abiteboul, president of Cheniere Supply & Marketing told Gas Matters Today on the sidelines of the European Autumn Gas Conference on Wednesday. [Red bold emphasis added.]
Webmaster’s Comments: The natural gas price in China is higher than the US break-even price, and the US has a natural gas resource glut. Cheniere intends to make money selling US-source LNG to China.
It could not be clearer — more US LNG import infrastructure is not needed. Downeast LNG and Calais LNG are lost causes.
For the first time in almost five decades, the United States shipped exported LNG to Europe. [Red bold emphasis added.]
The reason energy companies are able to extract monster gas levels from a single well is technology. Horizontal drilling, longer laterals (extending the horizontal leg of a well by thousands of feet to access more gas) and multi-stage fracturing have vastly upped the volumes yielded by an individual well. And in the last decade -- and especially the last several years -- operators have been recovering more and more gas, and also oil, from their wells.
Even when gas prices sank below the $4/Mcf threshold, these wells still were economic. That is why producers have flocked to shale and unconventional plays and continue to drill away despite relatively low gas prices. So if you ever wondered why the US has a gas surplus that keeps the price tamped down and is projected to remain that way for the next year or so, now you know why. Blame the monsters. [Red bold emphasis added.]
10 November 2010
The International Energy Agency tells Reuters the world will be swimming in natural gas for another decade as U.S. domestic production surges and other nations ramp up their abilities to export gas as LNG.
Despite the risk, companies are starting to move forward with plans to actually turn those LNG import terminals into true export terminals with the ability to turn domestically produced natural gas into LNG.
Johnson said he believes the Freeport LNG terminal south of Galveston is also working up similar plans. The rumblings are that all the natural gas expected to be produced out of the Eagle Ford Shale in South Central Texas could be directed toward Freeport for export, he said. [Red bold emphasis added.]
Awash with domestic shale gas and with little need to import extra fuel, the United States has started re-exporting LNG cargoes, which firms had previously imported under contract, to countries where gas prices are much higher.
U.S. shale gas has already forced many LNG producers that had hoped to supply the North American market to find alternative buyers, with many cargoes ending up in Europe and driving spot gas prices below the price of oil-indexed Russian gas.
U.S. LNG imports have fallen to contractual minimums as gas prices have sagged, forcing importers whose terminals are sitting idle to change strategy and re-export to make the most of higher prices overseas.
All IEA scenarios forecast gas demand will increase, but it said that demand would take until 2020 to absorb swelling global gas supplies, which are due largely to a surge in North American shale gas and liquefied natural gas production (LNG).
"The glut of global gas supply capacity that has emerged as a result of the economic crisis ... the boom in U.S. unconventional gas production and a surge in liquefied natural gas capacity could persist for longer than many expect," the IEA said in its World Energy Outlook 2010 published on Tuesday. [Red bold emphasis added.]
Citigroup Energy Inc. exported an LNG cargo to Spain from Sabine Pass in February, according to the Energy Department. JPMorgan exported another cargo from the port in June to South Korea. [Red bold emphasis added.]
EIA expects gross pipeline imports of 9.1 Bcf/d in 2011, an increase of 1.4 percent compared with 2010 imports. Projected liquefied natural gas (LNG) imports average 1.27 Bcf/d in 2010, a 2.3 percent increase from the 2009 levels. High domestic production and low U.S. prices relative to European and Asian markets have discouraged LNG imports into North America. However, LNG imports grow slightly in 2011 to 1.32 Bcf/d, a 4.5-percent increase from 2010 levels.
At the end of the winter heating season (March 31, 2011), EIA expects 1,776 Bcf of working natural gas will remain in storage, about 114 Bcf higher than the end of March 2010. This is an upward revision of more than 70 Bcf from last month's Outlook because of the current higher-than-expected stock level and upward revision in the production forecast. [Red bold emphasis added.]
Working gas in storage sets a new all-time record. Despite smaller injections than last year through much of the summer, high production combined with relatively mild fall weather has enabled storage levels to meet and surpass last year’s record level of 3,837 Bcf. Exceeding last year’s record level is particularly notable, because the new record resulted in large part from robust domestic production throughout the refill season, and was set despite increased total U.S. natural gas consumption in 2010, driven largely by gains in gas-fired electric power generation.
Webmaster’s Comments: It is worth noting that US overall natural gas demand has not been in decline, even with the drop in the US economy. Although LNG imports have increased in the low single digits, greater LNG imports have been staved by growing domestic natural gas production. Natural gas consumption would have to increase exponentially to even begin employing the vastly-overbuilt US LNG import infrastructure.
The report also said the junior oil and gas firm has very thick shale running underground the expanse of the Rosevale Block property where the E-08 well is located, notable since the Frederick Brook shale has been estimated to contain massive amounts of gas on nearby property where Halifax-based Corridor Resources Inc. (TSX:CDH) has partnered with Apache Canada to look at development.
"Unconventional gas, or shale gas, certainly appears to be where the industry is going and so knowing that we've got a shale gas formation that essentially runs through the whole property is going to be very important going forward," he said.
“The LNG issue goes back to 2004 in Washington County,” he said. “Here we are, six years later, and we are still limping along through a regulatory morass, despite both Robbinston and Calais overwhelmingly favoring LNG development. Meanwhile, the Irving Corporation in New Brunswick already has their facility up and running.” [Bold brown emphasis added.]
Webmaster’s Comments: What does Sen. Raye's cryptic statement mean regarding Augusta disrespecting property rights in the LNG debate?
Sen. Raye is angry that Canaport LNG is up and running before the Passamaquoddy Bay proposals, even though Canaport filed its formal permits 5½–8½ years before the proposals in Passamaquoddy Bay.
Sen. Raye has advocated shutting down the Maritimes & Northeast Pipeline that sends natural gas from New Brunswick to Maine, New Hampshire, Massachusetts, and Connecticut, because Canada prohibits LNG transits into and through Passamaquoddy Bay. Such a suggestion is advocating cutting off one's nose to spite one's face. The common sense solution would be to locate the LNG projects outside of Passamaquoddy Bay — and probably offshore — where Canada would have no objections and no ability to prevent the transits, and where the project sites could finally comply with LNG industry terminal siting best safe practices. (See LNG Terminal Siting Standards Organization for more about safe terminal siting best practices.)
Sen. Raye is bent on fighting an unnecessary battle with another country — a country that is the largest importer of Maine products — reducing Maine's and New England's energy security and risking economic reprisals, rather than employing a common-sense, responsible solution.
MASSACHUSETTS ALREADY has one major storage facility for liquefied natural gas too close to a built-up area. Given the risk at that site in Everett, the state doesn’t need another such hazard in Fall River.
Unlike the Gloucester facilities, Weaver’s Cove — like Everett — could store LNG to supply tanker trucks servicing the state’s gas utilities in the winter. But if the region needs more such storage capacity, it should be at a site safely away from any homes, and it should be big enough to replace Everett at the same time. This is the natural-gas project that energy entrepreneurs should be considering — not another tank depot cheek by jowl with homes and businesses.
Webmaster’s Comments: In reality, the Weaver's Cove project is unneeded.
Responding to a previous inquiry from Sabine Pass LNG, L.P., FERC said yesterday that pre-filing procedures are not required for the proposed installation and operation of spare gas pipeline compressors at the Sabine Pass LNG terminal.
“Our concern is that these contracts are long term and while it is true that we have an oversupply situation at the moment, we are talking about 20-year contracts. We have to study whether we will be able to support further expansion,” Seepersad-Bachan said.
And here is a partial list of what Campbell intends to see develop through this ministry: the Site C dam, a province-wide network of new mines, forest tenures, liquefied natural gas production and export facilities, new independent power projects, and all the roads, power lines and pipes needed to connect them. [Red emphasis added.]
Leaders split 4-1 on approval, but demand emergency plan
The county has said it won't grant development permits for the construction of "any portion of the Pipeline" until the plan is submitted to the county, and has been reviewed by the county's Emergency Management Division and assessed by an independent consultant.
January cannot come soon enough for turnover at the Clatsop County Commission. Last week's ruling by the Oregon Court of Appeals reminded Clatsop County voters and taxpayers just how wrong-headed and wasteful some incumbent and former commissioners have been over the past four years. The appeals court ruled the county commission was wrong in saying that the Bradwood liquefied natural gas terminal project was minor and that it would protect salmon.
Under the chairmanship of Richard Lee, the commission loaded the county planning commission with people who would disregard reality and bend to Bradwood's will. Thus the planning commission turned aside staff recommendations in order to clear the path for the Bradwood LNG terminal. Continuing the pattern of corruption, the commission made its ruling, including two breathtaking statements: that the project was not large and that it would protect salmon.
The appeals court issued a ruling Nov. 3 upholding a decision by the Oregon Land Use Board of Appeals that found fault with two elements of the county's original approval for the project, a liquefied natural gas terminal and pipeline proposed for Bradwood 20 miles east of Astoria.
EPA's action for the oil and gas sector requires annual reporting of methane, carbon dioxide and nitrous oxide emissions from flaring, equipment leaks, offshore petroleum and natural gas production, onshore production facilities, liquefied natural gas imports and exports, and onshore transmission and distribution. EPA, however, has not completed final rules for the gathering lines and boosting stations at onshore natural gas and petroleum processing and production operations.
"For far too long the public has been kept in the dark about the large volumes of pollution released from facilities in the oil and gas sector," said Emma Cheuse, an attorney at Earthjustice. "EPA's action will strengthen public accountability for this major source of global warming pollution."[Red emphasis added.]
8 November 2010
The United States is set to supply gas to Britain for the first time in half a century, with a liquefied natural gas (LNG) tanker expected to arrive from Louisiana in late November.
U.S. gas prices have fallen more than 30 percent since the beginning of the year, pressured by a surge in North American gas production which has also reduced U.S. LNG imports to minimal contracted volumes.
Yemen LNG, a liquefied natural gas venture led by French oil major Total, will divert 35 cargoes originally meant for U.S. markets to Asia next year because of higher prices there, an official said on Sunday.
"Today our strategy at Yemen LNG is to exploit the difference of prices between the U.S. and Asia, and to deliver to Asia the cargoes which were originally meant to be delivered in the U.S. to enjoy better price," Francois Rafin, general manager of Yemen LNG, told a news conference in Sanaa.
A new technology developed by a Canadian company aims to remove carbon from natural gas before it’s burned, cutting carbon dioxide emissions by as much as 40 percent and capturing solid carbon — known as carbon black — a substance that can be used in making tires, laser printer toner, and other products.
The firm, Atlantic Hydrogen Inc. of Fredericton, New Brunswick, has formed a partnership with the utility National Grid, which has about 1.2 million customers in Massachusetts and is considering developing a pilot plant in Boston to help prove the technology on a commercial scale. If it works, a National Grid executive said, it could reduce carbon dioxide emissions at a cost that is up to 80 percent less than postcombustion methods that capture greenhouse gases and pump them underground.
Analysts expect natural gas to play a large role in the US energy mix as the nation makes the transition to alternative sources of power, such as wind, solar, and fuel cells. Natural gas is not only the cleanest-burning of fossil fuels, which include oil and coal, but also found in abundance in North America. Improved drilling technology has recently unlocked massive new supplies in US shale deposits. [Red bold emphasis added.]
Connecticut’s reliance on foreign LNG will plummet — just like it has in the rest of the nation — as the benefits of newly available domestic natural gas in the Midwest are fully realized; but because New England is at the end of the country’s transmission system, those benefits will be slower coming.
Because of the widespread use of domestic shale natural gas, the amount of foreign LNG used in the country is far less than predicted, said Damien Gaul, economist with the U.S. Energy Information Administration. Natural gas coming from foreign sources hit a 15-year low nationally in 2009. [Red bold emphasis added.]
Cheniere Energy Partners, L.P. announced today that its subsidiary, Sabine Pass Liquefaction, LLC, has entered into a non-binding memorandum of understanding with Morgan Stanley Capital Group Inc. in connection with the potential acquisition by Morgan Stanley of certain import capacity and approximately twenty percent of a proposed 7.0 million tonnes per annum (mtpa) of LNG liquefaction capacity at the Sabine Pass LNG terminal located in Cameron Parish, Louisiana.
As currently contemplated, the liquefaction project would be designed and permitted for up to four modular LNG trains, each with a peak processing capacity of up to approximately 0.7 Bcf/d of natural gas and an average liquefaction capacity of approximately 3.5 mtpa. [Red bold emphasis added.]
TRENTON — Environmental groups on Monday ramped up opposition to a federal permit application by Liberty Natural Gas to build an ocean pipeline and connect it to a proposed gas storage facility 16 miles off the coast of Asbury Park.
The plan calls for the liquefied natural gas pipeline [sic] on land to run through Perth Amboy, Woodbridge, Carteret and Linden, "one of the most densely populated areas of the state, putting people in harm's way for unnecessary reasons," said Jeff Tittel, executive director of the Sierra Club of New Jersey. Tittel contended that U.S. energy markets are already "awash in gas." [Red bold emphasis added.]
6 November 2010
In past the rat race for building LNG Termnials in US with anticipation of huge demand for Gas in USA has resulted in net loss to the company who has invested in such infrastructure. The gas prices are expected to be further squeezed and these company will come under more pressure to float above the bottom line.
In last 5 years if one checks the utilization of the LNG terminals in USA it would be an eye opener. The amount spent on building and maintaining these terminals, if not spent would have given much better returns just by sitting in the banks and giving the added liquidity to the company for profitable ventures, which has otherwise already spent these amount. [Red bold emphasis added.]
McClendon, whose Oklahoma-based company is the second-largest gas producer in North Texas' Barnett Shale, said he thinks the current glut in the U.S. domestic gas supply "should balance itself out" by the middle of this decade. He said the U.S. by then could have in place an infrastructure for conversion of natural gas to liquid form, potentially for use as a motor fuel, and for export to foreign countries as liquefied natural gas (LNG). [Red bold emphasis added.]
The difference between LNG in Japan, Asia’s biggest gas importer, and the average monthly U.S. Henry Hub price rose to $7.19 a million British thermal units in September, the most recent month for which customs data is available. That’s 48 percent higher than a year earlier and the biggest gap since January last year.
Global gas prices are diverging as U.S. customers switch to cheaper, domestically produced gas from shale deposits, while Asian importers continue to pay prices linked to oil. Shale gas will account for 34 percent of U.S. production by 2035, compared with 18 percent in 2008, Energy Department estimates show. [Red bold emphasis added.]
Senators from Massachusetts and Rhode Island want to block federal regulators from using taxpayer dollars to authorize construction of any liquefied natural gas terminal or related infrastructure within 5 miles of Fall River.
Without the money, it would be impossible for the Federal Energy Regulatory Commission to assess the application from Weaver’s Cove Energy for the floating terminal. The senators’ aim is to kill a plan that has been widely opposed in Rhode Island and Massachusetts on grounds that it would damage the environment, disrupt boating and pose a safety hazard. Weaver’s Cove maintains that the project is safe and that shipments can be made without having a negative effect on Narragansett and Mount Hope bays.
In an effort to protect communities in Massachusetts and Rhode Island, U.S. Senators John Kerry (D-Mass.), Scott Brown (R-Mass.) Jack Reed (D-R.I.), and Sheldon Whitehouse (D-R.I.) sent a bipartisan letter to the top members of the Appropriations Subcommittee on Energy and Water Development urging them to prohibit the Federal Energy Regulatory Commission (FERC) from using federal funds to approve a liquefied natural gas (LNG) terminal in the city of Fall River, Massachusetts.
The next meeting of the Coalition for Responsible Siting of LNG Facilities is Thursday, Nov. 11, at Calvary Temple Assembly of God, at 4321 North Main St. at 7 p.m. Area residents and business people are encouraged to attend to support the ongoing fight against the Hess LNG facility proposal.
Webmaster’s Comments: The Nikiski LNG plant is exporting LNG to Japan, even though there is insufficient natural gas for Alaskan consumers and industrial users.
The utility told analysts during its third quarter earnings conference call that it had signed a memorandum of understanding for Williams Northwest Pipeline to become a part owner in the project and to consolidate the respective companies' efforts to build more cross-Cascades gas capacity.
The project is still tentative, but if the companies can drum up enough shippers, their cooperation would breathe new life into a controversial project that has been hamstrung by the bankruptcy of its biggest shipper and fierce opposition among landowners and environmentalists.
5 November 2010
SUSIE GHARIB: Energy independence is always a hot button issue when it comes to politics. But tonight's commentator says few people realize the U.S. has become a big energy exporter. He's Daniel Gross, columnist and economics editor at Yahoo! Finance.
Just a few years ago, companies were building terminals along the coast to facilitate the importation of clean- burning liquefied natural gas or LNG. But thanks to huge new discoveries and new drilling techniques, the U.S. now has abundant supplies of its own. In September, the Department of Energy approved the application of one of those import terminals in Sabine Pass, Texas, to convert to an export facility. It turns out the U.S. still produces plenty of what the world needs, including energy. I'm Daniel Gross.
U.S. Senators Jack Reed (D-RI), Sheldon Whitehouse (D-RI), John Kerry (D-MA), and Scott Brown (R-MA) sent a bipartisan letter this week to the top members of the Appropriations Subcommittee on Energy and Water Development, urging them to prohibit the Federal Energy Regulatory Commission (FERC) from using federal funds to approve a liquefied natural gas (LNG) terminal in Fall River.
“Finally, New England already has access to ample supplies of natural gas. In fact, an analysis by the Massachusetts Department of Energy Resources asserted that it is “unclear to what extent, if any, Weaver Cove’s LNG supply is needed to meet the region’s gas supply needs ...” Within this past year two new or expanded LNG facilities – Canaport LNG and Neptune LNG – were completed, creating a combined new capacity over twice that of the proposed facility. With the large excess of supply already in the natural gas market, combined with these new facilities, it is unclear why there would be demand for additional LNG infrastructure.” [Red bold emphasis added.]
“Both of our states will be negatively impacted by this proposed LNG terminal and we strongly encourage you to include language in the final appropriations bill that would prohibit the use of federal funds to support this ill-advised project,” the letter read.
The City of Savannah has taken the lead on questioning the safety of a proposal by Southern LNG to truck up to 58 tank loads of LNG daily from Elba Island to interstate highways, using a crosstown route that includes DeRenne Avenue.
To its credit, the city has hired consultants to get at the facts, but not just about moving LNG. They want to know the current risks of trucking gasoline and other hazardous substances on local roadways. Those risks already exist, but draw no protests.
Webmaster’s Comments: Gasoline trucks do not pose as great a hazard as LNG trucks. Also, the LNG proposal is to send as many as 58 LNG trucks per day on a busy highway through town — certainly more than the number of gasoline trucks taking that route in one day.
- Compared to gasoline, LNG is more flammable; burns at a higher temperature; and produces little masking smoke, so is a significantly higher thermal-radiation burn hazard at distance.
Liquefied natural gas… The city is concerned of its safety and what where to happen if there was (sic) an explosion. But the Savannah Chatham County School Board turned down a resolution to oppose the plan.
“I was hoping that the board would at least file a protest to oppose the trucking of LNG, but that doesn’t mean it won’t happen near our schools. Hopefully we will get more information and the board members will feel comfortable opposing the trucking of LNG near our schools.”
Issue may be reconsidered after staff investigates safety risk
"Have we done any study on the risks?" Board Member Greg Sapp asked. "If the board is being asked to make a policy position, it should be based on some work the school board does. I'm a little reluctant to make a decision based on what you've read in the paper and heard in public forums."
Southcentral Alaska gas and electric utilities are exploring the feasibility of importing liquefied natural gas to Cook Inlet in an effort to be prepared if regional gas supplies continue to decline and a plant on the Kenai Peninsula that now exports LNG closes after a federal license expires in 2013.
One company that has expressed interest in supplying LNG to the region is Shell, which now ships liquefied gas to Asia and North American markets from Sakhalin [Island in Russia], said Jim Posey, general manager of Anchorage's city-owned Municipal Light and Power, one of the utilities engaged in the import study.
A state of Alaska team is doing engineering and cost estimates for a small 24-inch pipeline to bring North Slope gas to southern Alaska, but it would be 2018 or 2020 before the system could be built and operating, they concede.
ConocoPhillips and Marathon Oil Co., which own the LNG plant, were recently given a two-year extension of an LNG export license by the U.S. Department of Energy. The new expiration date is March 2013.
The cost of building new or reconfigured LNG facilities to handle imports could range from $150 million to $300 million, Posey and other utility managers have estimated. Regional consumers will have to pay these costs on top of new costs for natural gas storage that is now planned to be built about the same time. [Red & bold emphasis added.]
Webmaster’s Comments: Here's an area that is running out of natural gas for use by residents, but FERC repeatedly extends the Kenai LNG facility's license to continue exporting to Japan. Exactly how is that "in the public interest" or enhancing US energy security? It isn't — but it sure helps the company make more money in spite of the cost US citizens.
Southcentral Alaska depends heavily on gas for heating and for power generation, but gas production from the aging oil and gas fields of Cook Inlet has been steadily declining for a number of years. And, although Enstar is in the process of building a new gas line to the southern Kenai Peninsula, to ship gas from a new gas field at North Fork, that field is unlikely to come on line before the spring, Starring said.
In a worst case scenario during a cold snap, supplies to gas-fired power stations might need to be curtailed, to ensure the maintenance of adequate gas pressure in utility gas lines. That would lead to rolling power blackouts in the Southcentral region.
Enstar and other utilities have been investigating the possibility of importing LNG into Southcentral, to supplement local gas supplies. In addition to talking to potential suppliers, the utilities are participating in a study of the LNG import concept, Starring said. [Red emphasis added.]
Webmaster’s Comments: An area that is currently exporting LNG is considering importing LNG to meet local natural gas requirements.
Clatsop county should not have classified the project as small- to medium-sized based solely on the amount of dirt that would be moved for the port facilities, the court ruled. It should have also taken into account dredging in the river.
Though Bradwood's backers have already declared bankruptcy and abandoned their efforts, opponents worry that another entity could resurrect the project by purchasing the development rights out of bankruptcy.
The court's decision said "mitigation" efforts weren't the same thing as "protection." Protection, it said, "means inhibiting development that causes significant adverse impacts on the protected resource." [Red emphasis added.]
The appeals’ court decision upholds two big objections to the project: that the terminal would be too big for the local zoning and that mitigating for salmon habitat destruction isn’t the same as “protecting” it.
LUBA had remanded the issue of the approval of the proposed LNG plant back to Clatsop County after a review showed its members believed the commissioners failed to properly consider the impacts of dredging 46 acres of the Clifton Channel. This leads into the Columbia River and would be needed to create a turning basin for deep-draft gas tankers that deliver LNG from overseas to the terminal. Also at issue was where the dredge spoils would be dumped, according to court records. Opponents said the proposed dredging would take place in "critical salmon habitat."
An investigation by the Associated Press into [liquefied natural gas] pipeline crisis plans has found that the federal government has withheld access from local first responders.
The report indicates that if Clatsop County fails to require detailed emergency response plans, including a funding plan, before approval, the first responders of all the jurisdictions affected will not be able to review or even maintain copies of the plan.
LAWMAKERS must give gas producers fair and open market access if the US is to advance a supply revolution that has transformed its energy outlook, says the boss of one of the country's largest developers.
Webmaster’s Comments: Apparently, the air-quality exemption granted under 40 C.F.R. 60.14 or 40 C.F.R. 64.2 to natural gas developers isn't enough "level playing field."
2 Nov 2010
The following link will access a large PDF file; 4.1 MB.
While natural gas remains the dominant fuel within New England‘s electric power generation sector, the region‘s diversity and expected reliability of natural gas supply has improved. This is the result of the new Canaport LNG terminal that went into commercial operation in 2009 and the Neptune LNG facility that went operational in 2010. In addition, new pipeline expansion projects have been designed to improve the ability to deliver LNG and other sources of natural gas to the region.
Nov. 1 (Bloomberg) -- Qatar, the world's biggest liquefied natural gas producer, may divert more cargoes away from the U.S. to emerging markets in Asia and South America, Energy Minister Abdullah al-Attiyah said.
Gas production in the U.S., which has been boosted by unconventional sources such as shale rock, depressing prices amid lower demand, will average 61.3 billion cubic feet a day this year, according to the Energy Department, the most since 1973. Output will be 2.2 percent higher than last year.
The U.S. used 10 percent of its 100 million tons a year of LNG import capacity last year, Malcolm Brinded, executive director for international exploration and production at Royal Dutch Shell Plc, said at the conference. Spare capacity at U.S. LNG import facilities was six times China's total import capacity for the fuel, he said. [Red bold emphasis added.]
Canada is preparing to export LNG out of Kitimat, British Columbia. They see what the All Alaska Gas line advocates like Bill Walker and Ethan Berkowitz see. The best value for Alaska's gas is found by placing it in the premium, world markets. The 250 trillion cubic feet of estimated North Slope reserves are worth over $3 trillion if sold on the world markets -- and worth less than a third of that value if sold in the depressed U.S. market (if the massive transportation costs and other problems are discounted). [Red bold emphasis added.]
Using novel new technologies normally associated with interplanetary deep space navigation and missile guidance systems, the technology is designed to transmit data to and from downhole equipment in real time, enable surface processing of downhole sensor data, and control downhole tools directly from the surface. The technology allows the system to successfully operate at greater depths than other EM systems and to propagate signals through formations that typically weaken electromagnetic waves.
DOE's Deep Trek Program was established in 2002 to develop "smart" systems to address the needs of U.S. producers drilling to depths of 15,000 feet and deeper, where more than 125 trillion cubic feet (Tcf) of untapped natural gas is estimated to be in place. For comparative purposes, DOE’s Energy Information Administration estimates technically recoverable U.S. natural gas resources at 2,119 Tcf, with proved reserves of 238 Tcf. [Red bold emphasis added.]
With the gas glut turning into a more permanent energy fixture in North America, the market will progressively become (even more than currently) one in which production will primarily meet regional needs, with contract swaps acting to offset differences between regions.
In the Marcellus, wells are coming in cheaper than anticipated. The average well spud this year will come in profitable, at less than $3.60 per NYMEX contract, with a rising percentage coming in significantly below that level. Unlike western Canada, the Marcellus has the advantages of much closer proximity to end users and an increasing network of pipelines to serve both throughput and storage.
Already in operation, Cove Point is the largest LNG facility on the US east coast. As the need collapses for LNG imports into the US – another result of our ongoing gas surplus – don’t be surprised if this terminal begins reversing operations to export volume. This is tailor-made to provide a major outlet for additional production from the Marcellus.
Welcome to North America: the new Saudi Arabia of energy. [Red bold emphasis added.]
Webmaster’s Comments: Mark Maddox illustrates America's new natural gas energy independence, but advocates stifling debate on shale gas best practices. Best practices and proper regulation require thoughtful discourse, not slam-bang facilitation of lack of process.
"Shale gas is not only competitive but in the US [shale gas] is the lowest-cost gas--now it's cheaper than conventional gas and is seeing many technological refinements," [said Francisco de la Flor Garcia, director of regulation for Spain's Enagas].
LNG market developments have played a significant role in the gas glut, with the US set to become an LNG exporter and Spain capable of exporting an excess in LNG of up to 20 billion cubic meters per year, said de la Flor Garcia. [Red bold emphasis added.]
The U.S. Department of Energy's (DOE) Office of Fossil Energy has decided that it will review an application submitted by Sabine Pass Liquefaction, LLC to export LNG to member nations of the World Trade Organization (WTO) under section 3(a) of the Natural Gas Act (NGA), which requires DOE to examine the complete application and determine whether the proposed LNG export scheme is in the "public interest."
[See related article immediately below this one.]
Several billion dollars in regas terminal assets are relatively idle along the U.S. Gulf Coast. All of these terminals were built with the objective to bring LNG into markets to improve gas supply, lower energy costs and preserve jobs. Now, with some terminal owners proposing to reverse flow and export gas, David’s presentation will address… [Red bold emphasis added.]
[See related article immediately above this one.]
It is widely understood that unconventional gas producers in North America have expanded their reserves to such an extent that U.S. prices have fallen to only a small fraction of world prices. Some analysts believe that North America now has sufficient reserves to last it for 100 years at current demand levels.
For this reason, entrepreneurs, including owners of U.S. Gulf Coast regasification terminals, such as Cheniere, aim to offer liquefaction and export services. This workshop will examine the economic merits and implications of their propositions. [Red bold emphasis added.]
The request states that in light of the U.S. Pipeline and Hazardous Materials Safety Administration's new guidance for exclusion zones surrounding an LNG facility, the method used by Weaver's Cove Energy to calculate its exclusion zones is no longer acceptable. [Red emphasis added.]
Last month Liberty Natural Gas, LLC submitted an application to FERC to construct the onshore portion of its natural gas pipeline system connecting to a proposed LNG deepwater port to be located offshore New Jersey.
Southern LNG announced in August its plans for the truck-loading facility on Elba Island, where it imports liquefied natural gas. That fuel - methane that's supercooled and therefore condensed - currently comes in by ship as a liquid and leaves as a vapor in pipelines.
An ensuing spill and fire could trigger an evacuation of up to a mile around it, a difficult proposition in the congested DeRenne corridor, they told city council and repeated at a town hall meeting last month.
WASHINGTON--(BUSINESS WIRE)--Maritime Administrator David T. Matsuda on Friday signed the Record of Decision approving the deepwater port application submitted by TORP Terminal LP for a license to own, construct and operate the Bienville Offshore Energy Terminal, an LNG regasification facility located in the Gulf of Mexico, 63 miles south of Dauphin Island, Alabama, in a water depth of 425 feet.
Webmaster’s Comments: This will make the 12th US LNG import terminal, adding around 10% more over-capacity to an already-overbuilt import infrastructure.
An official with ExxonMobil told Platts LNG Daily [subscription required] yesterday that commissioning of the Golden Pass LNG terminal has begun. The official also noted that the process is expected to take between two and three months.
A (sic) LNG re-gasification facility to receive Venezuelan-sourced LNG is currently being planned for the southern coast port city of Cienfuegos by CuvenPetrol, a joint venture between Venezuela’s PdVSA (51%) and Cuba’s Cupet (49%). Two 1-million-ton re-gasification trains are planned for 2012 at a cost of over $400 million. The natural gas is destined as fuel for that city’s thermoelectric power plant, and as a feedstock (hydrogen) for the Cienfuegos refinery and future petrochemical/fertilizer plants.
Natural gas will provide fuel to the refinery as well as hydrogen for the upgrading units scheduled to be completed by 2013. Natural gas will also be used as a feedstock for a planned $1.3 billion petrochemical complex which will include ammonia and urea producing facilities which will provide Cuba with much needed fertilizers for its agricultural sector.
The National Energy Policy, now before Parliament, calls for a minimum of 20 per cent of the island's energy to come from renewables, "which means that Jamaica will be at 1,400 megawatts (Mw) of installed capacity and at least 300 Mws of that will be coming from renewables", Minister Robertson informed.
Focus is being placed on LNG, which is a cleaner-burning and more cost effective alternative to fossil fuel. [Bold brown emphasis added.]
Webmaster’s Comments: Jamaica's Minister of Industry, Investment, and Commerce, Hon. James Robertson, clearly does not understand what LNG or methane is — or he knows but is intentionally misleading the Jamaican public. LNG is a fossil fuel. It certainly is not "renewable" or an "alternative to fossil fuel."
Anchorage’s city-owned Municipal Light & Power and Chugach Electric Association, the two largest Southcentral Alaska electric utilities and Enstar Natural Gas, the regional gas utility, are together studying the possibility of LNG imports after 2013, when regional gas production is forecasted to fall short of local demand. Studies mainly center on the cost of facilities needed to regasify and store any LNG to be imported.
A state of Alaska team is doing engineering and cost estimates for a 24-inch pipeline to bring North Slope gas to southern Alaska, but it would be 2018 or 2020 before it could be built and operating, they concede.
Most LNG carriers today are larger, so the dock would have to be modified. The cost of building new or reconfigured LNG facilities to handle imports could range from $150 million-$300 million, utility managers have estimated. Regional consumers will have to pay these costs on top of new costs for gas storage now planned to be built about the same time.
"The dispute is about how the shales are going to perform," he said. "What's the decline curve going to look like, especially in those out years, is it really going to flatten out? There's a lot of focus on initial decline rates.
"(But) if you're starting from (20 mmcf per day) for your initial production rate and you have a 75% first-year decline rate, at the end of that year, you've still got a pretty darn good well on your hands." [Red bold emphasis added.]
Can Oregon and Clatsop County afford to lose the Clatsop and Tillamook forests without compensation? Can the Clatsop County Commissioners in good faith send in first responders without training, equipment and detailed plans of dealing with a pipeline related crisis? Can private timberland owners and other industrial users of the forests be expected to pay for costs associated with the increased fire danger from the proposed pipeline, or limit their activities according to the Oregon Forest Practices Act when Oregon LNG is refusing to do so?
Commissioner Dirk Rohne was the only dissenting vote to a motion that affirmed a decision drafted by county-hired Hearings Officer Peter Livingston, allowing the Oregon Pipeline LLC project to move forward.
Anti-LNG group will meet Nov. 8
An Oregon Citizens Against the Pipeline (OCAP) meeting is slated for 6:30 p.m. Nov. 8 at the Woodburn Grange Hall, 891 N. Settlemier Ave. The meeting is open to those seeking updated information concerning liquefied natural gas (LNG) terminals/natural gas pipelines being proposed in the area.
Both Oregon and California regulators would most likely go along with [LNG imports] happily – if there were a need for the gas. But as early as six years ago, a federal Energy Information Agency report indicated no gas shortage was likely in California until 2030 at the earliest.
LNG is a natural for coastwise shipping, less so for trans-oceanic vessels. American start-ups including Coastal Connect, American Feeder Lines, and Intermodal Marine Lines see a role for natural gas in powering the modern vessels planned for marine highway service.
Now there are obvious regulatory and distribution issues to be addressed. But sitting there, surrounded by a US industry group that knows little of shipping and a lot about natural gas, I realised that comparatively smaller US maritime shipping sector could have a major lobbying partner to advance innovative US-flag shipping if we only were willing to engage. What do you say, Mr. Pickens? What do you say, Washington?
Webmaster’s Comments: Such a plan would necessitate large LNG storage and fueling facilities at existing ports, perhaps too near civilian populations — a condition warned against by the LNG industry, but ignored by US regulators. (See more about LNG best safe practices at LNG Terminal Siting Standards Organization.)