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Passamaquoddy Bay & LNG

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2015 January 30

Passamaquoddy Bay

PDF fileHow much LNG might the US export? (2014 Nov 12) — World Gas Intelligence [PDF file; 1.02 MB]

In an exclusive report, WGI analyzes 23 proposed export projects in the US Lower 48 and ranks them according to their chances of success (p9). Four are all but guaranteed to go ahead, and two more are likely — and these six front-runners alone would add more than 70 million tons per year to global LNG supply by late this decade or early next. That has helped fuel concerns about a global surplus, recently prompting UK gas giant BG to delay a proposed LNG plant in western Canada amid fears of excess supply (WGI Nov.5’14). Another four projects are identified as possibles — and if these went ahead, too, US supply could swell to over 110 million tons/yr

WGI classes the projects in five categories, based on bottom-up analysis: Officially Underway (Sabine Pass trains 1-4 and Cameron LNG); On the Verge (Freeport LNG and Cove Point), with all the elements in place bar taking a final investment decision (FID); Quite Likely (Corpus Christi LNG and Sabine Pass trains 5 and 6), which means the projects are on a solid trajectory toward FID with experienced players and offtakers lined up; Wild Cards (Lake Charles, Golden Pass, and Jordan Cove and Oregon LNG), placed in this category either because project sponsors could lose interest through changes in broader global strategy or because of opposition in Oregon; and At the Margin (everyone else). [Colored & bold emphasis added.]

Webmaster's comment: Downeast LNG fits the "Beyond the Margin" category that the report neglected to include.


Islanders and propane haulers grapple with tighter ferry restrictions (Jan 26) — Mainebiz

The issue first came up in November. U.S. Coast Guard officials ordered vessels in the Maine State Ferry Service to stop transporting propane and passengers simultaneously, saying propane carried in bulk would have to be transported separately, either on a private vessel or by privately contracting with the ferry to run at off-hours.

Coast Guard Commander John Humpage says Coast Guard guidelines prohibit the transportation of passengers and propane at the same time, except for personnel directly involved with the transport, such as a driver and an assistant.

Webmaster's comment: This article counters LNG terminal supporters who claim there are no safety concerns about propane transport, so LNG should cause no concerns.


Report: Building liquid natural gas export terminal in NC unlikely —

Building a terminal in North Carolina to export liquefied natural gas would require the state to compete against more than two dozen planned and proposed LNG terminals in U.S. regions with existing pipelines and access to natural gas production.

The report states that currently only one LNG export terminal operates in the United States, and it was built in 1969 in Alaska; an LNG facility approved in 2011 in Louisiana is expected to begin operating this year.

Currently 16 LNG export terminals have been proposed and a dozen others in the Gulf Coast are potential sites identified by project sponsors, the report states. All are near extensive pipeline networks.

The report also notes that many planned LNG terminals are proposals to convert an existing terminal from importing natural gas to exporting it.


LNG — it's both 'if' and 'when' — The World, Coos Bay, OR

COOS BAY — While Coos Bay waits for Jordan Cove to get the green light or the ax, there's a larger dilemma hanging over the United States' energy industry: How will the U.S. shale boom impact LNG prices and supply on a global scale, and what if export terminals are doomed before they're even built?

[Art Berman, a petroleum industry expert with more than 30 years of experience in the energy industry,] worries that the ever-changing industry will be a completely different animal by the time U.S. LNG export facilities get all of their required permits and are built, which in total can take several years for each project. Only one is expected to be operational by 2016: Cheniere LNG.

“The folly of the U.S. model for LNG exports is that the world is holding its breath,” Berman said. “Well, guess what? The world has changed.”

There are currently 14 U.S. LNG export terminals proposed to FERC, which total 15.4 bcf of LNG per day.

In 2012, the EIA laid out five reasons why these projects would be difficult to complete:

  • They have to jump through a lot of regulatory hoops to even begin construction.
  • They cost a lot to get permitted and built, presenting a financial risk for sponsors (Veresen has already committed millions of dollars to permitting and expects Jordan Cove and the Pacific Connector Gas Pipeline will cost $7.5 billion to be built).
  • These projects typically require 20- or 25-year contracts in order to break even with high investment and construction costs.
  • Liquefaction plants and LNG trains take years to build, during which time any number of things could have shifted in the LNG industry and regulatory processes.
  • The industry's future is hazy and unpredictable, making investment risky when projected demand, competition and prices are not concrete.

Internationally, Berman said “there's more than enough natural gas to meet Asia and Europe's need for a couple of decades.

“Four [new LNG export terminals] are all but guaranteed to go ahead, and two more are likely — and these six front-runners alone would add more than 70 million tons per year to global LNG supply by late this decade or early next,” Energy Intelligence wrote.

Those six "front-runners" are Sabine Pass LNG trains 1-4 in Louisiana, Cameron LNG in Louisiana, Freeport LNG in Texas, Cove Point in Maryland, Corpus Christi LNG in Texas and Sabine Pass trains 5 and 6.

“If these guys want to spend all this money to export LNG, let them hang themselves,” Berman said. “We (the United States) get it wrong every time and it just seems like we're on track to do it again.”

Our View: We can't afford to wait on LNG [Editorial] — The World, Coos Bay, OR

Let's focus our economic recovery efforts on what's within our control

Today’s front page story on the fading likelihood of a liquefied natural gas export plant being built here anytime in the near future will be panned by some, welcomed by others.

Our communities need to craft plans for our economic future; without an LNG plant in those plans. Ideally, we should discipline ourselves and erase from our minds the possibility of an LNG plant.

Our opinion is based solely on the hard economic realities of the global non-renewable resource world, and the learned observations of experts in the field.

Let's get to work now on what we control. Let's carve "Jordan Cove" from those discussions. That way we'll be farther down the road if LNG comes.

And if it doesn't, we'll be glad we didn't wait to act.


PDF fileCanadian LNG projects: Key development and financing issues (Jan 26) — McCarthy Tetrault LLP [PDF file; 152.94 KB]

[This document does not provide details regarding proposed LNG export projects in the Atlantic Provinces.]

There have been 22 announced LNG export projects in Canada; 18 along Canada’s West coast in British Columbia (BC), eight of which have NEB export licences, and four along Canada’s East coast in Nova Scotia, one of which has an NEB export licence.

All of the projects are at various stages of project development, including in respect of siting, export licences, authorisations and environmental assessments, and formulation of their respective finance plans. The West coast projects are substantially ahead of any of the East coast projects. (See table below for detail on the West coast LNG export projects).

LNG liquefaction plant and pipeline construction in Canada may have labour and cost challenges unlike competitor projects in other parts of the world. Canadian gas assets are stranded and require significant pipeline infrastructure to reach liquefaction sites on Canada’s coasts. The LNG liquefaction plant sites themselves are often remote and present shipping access challenges.

LNG projects in Canada are most likely to look to finance construction through the project bond or project loan markets (most likely utilizing a mix of commercial bank and export credit agency debt). Key to any financing strategy will be securing long-term purchase agreements with creditworthy off-takers for the bulk of LNG that will be produced. This task is increasingly difficult and is likely to impact on the number of projects that will be able to obtain financing over the next few years.

Although demand for LNG continues to grow and the number of importing countries continues to expand (25 countries have plans to build their first regasification terminals by 2017, in addition to 39mtpa of new capacity that has been built in just the last four years), this is far outstripped by planned new supply sources. In North America alone, more than 190mtpa of new liquefaction capacity is planned. This has created a “buyers” market where there are multiple potential supply sources, particularly into North Asia where many of the key creditworthy off-takers are located.

LNG Export Facilities – West Coast

  • Discovery LNG (Campbell River, BC)
  • Douglas Channel Energy/ BC LNG (Kitimat, BC)
  • Kitimat LNG (Kitimat, BC)
  • LNG Canada (Kitimat, BC)
  • Pacific Northwest LNG (Port Edward, BC)
  • Prince Rupert LNG (Port of Prince Rupert, BC)
  • Woodfibre LNG (Squamish, BC)
  • Triton LNG (located TBD)
  • WCC LNG Ltd. (location TBD)
  • Aurora LNG (Grassy Point near Prince Rupert, BC)
  • Woodside Energy LNG (Grassy Point near Prince Rupert, BC)
  • Kitsault Energy Project (Kitsault, BC)
  • Canada Stewart Energy Project (location TBD)
  • WesPac Marine Terminal (Delta, BC)
  • Orca LNG (Prince Rupert, BC)
  • Cedar LNG Export (Douglas Channel, BC)
  • Steelhead LNG (Sarita Bay, BC)

[Colored & bold emphasis added.]

Webmaster's comment: Not mentioned or included is Canaport LNG's brownfield plan to add export capability, giving it a leg up over all Canadian eastcoast LNG export proposals, and over Downeast LNG's proposal that is just 60 miles from the existing Canaport LNG terminal.

United States

Plans for export facilities in doubt — The Advocate, Baton Rouge, LA

Eleven proposed Louisiana projects are among more than three dozen U.S. liquefied natural gas export facilities for which developers have filed federal permit applications. The nine that have yet to break ground could all be at risk, experts say.

“No matter how many permits the U.S. Department of Energy issues, probably no more than five or six LNG export plants will materialize in the United States through 2020,” Harvard researcher Leonardo Maugeri wrote in a December paper.

Of the 38 liquefied natural gas export projects planned across the country, only four are under construction, including Sabine Pass Liquefaction and Cameron LNG in Louisiana and one facility apiece in Maryland and Texas. Sabine Pass and Cameron LNG will have a combined cost of $24 billion. They promise a total of 540 permanent jobs, and at their peak will employ 7,500 construction workers.

…Sabine Pass and Cameron have key advantages most proposed competitors don’t, Remec said.

Most importantly, the two have signed long-term supply contracts with buyers for basically all of their LNG exports, which help secure financing for constructing the multibillion-dollar facilities.

Another advantage both share: They are being added to existing import terminals that were constructed years ago to bring LNG into the U.S., before advanced drilling techniques unleashed a glut of oil and natural gas production in this country and made importing gas unnecessary. Having most of the infrastructure needed in place lowers construction costs.

“Huge cost overruns, poor planning, changing market conditions and emerging skinny margins will likely kill many projects across the world, or postpone their materialization to an uncertain future,” he said. Canadian projects likely will be the hardest hit. Of the 15 proposed Canadian LNG export facilities, none have reached a final investment decision.

Maugeri also wrote: “Cheap shale gas makes U.S. export projects cost-competitive, but few will survive.”

Webmaster's comment: The future for ill-timed, ill-sited Downeast LNG gets bleaker and bleaker.

Commentary: US gas-based projects face reality — ICIS

The reality is sinking in. The longer crude oil prices stay low, the greater the risk to US gas-based petrochemical and other projects. Delays and cancellations could range from ethane crackers to on-purpose propylene plants, to gas-to-liquids (GTL) facilities and liquefied natural gas (LNG) export terminals. [Colored & bold emphasis added.]

LNG luster flickers as Congress acts (Jan 29) — Roll Call, Washington, DC

Wednesday the House passed a measure to expedite liquefied natural gas exports, a move that has been gaining political steam even as the underlying market basis has been eroding.

The future of a push for more terminal capacity depends on five factors including oil prices, Housley Carr writes:

  1. the outlook for future LNG demand, especially in Asia but also in Europe and Latin America;
  2. the effect of much lower oil prices on oil-indexed LNG supply deals;
  3. the higher capital costs associated with greenfield LNG projects that would be developed next;
  4. the costs and challenges of shipping LNG through the expanded Panama Canal;
  5. the likelihood of competing LNG export projects being developed elsewhere, including western Canada

Falling US LNG competitiveness threatening projects (Jan 28) — Hydrocarbon Engineering

US LNG, which had been sought due to its contract structure linked to Henry Hub prices as opposed to oil, will become less competitive with oil indexed LNG projects.

Major greenfield LNG projects, particularly those that have experienced significant cost overruns in Australia, will be far less profitable.

BMI expect terminals yet to get full export approval from the US authorities to struggle to find buyers to support investment. This could impact as many as 14 LNG project proposals in the IS [sic; US], with a liquefaction capacity of as much as 155 billion m3/y. Excelerate Energy has already put its export plans at Lavaca Bay on hold. [Colored & bold emphasis added.]

Natural Gas Monthly — US Energy Information Administration (EIA)

Data for November 2014

  • For the first time since 1996, the United States did not receive any liquefied natural gas import cargoes from our trading partners in November 2014.

House passes bill to speed up liquefied natural gas exports (Jan 28) — The Hill, Washington, DC

The House on Wednesday passed legislation to expedite the federal approval process for liquefied natural gas (LNG) exports.

It was approved 277-133, with 41 Democrats voting in favor of the measure sponsored by Rep. Bill Johnson (R-Ohio).

Under the bill, the Energy Department would have 30 days to review an application, starting from when the Federal Energy Regulatory Commission completes its environmental review for a project.

“The Department of Energy has already taken steps to modernize the LNG export approval process and ensure applications are looked at efficiently and expeditiously,” a White House official said. “This process is working well, and we don’t believe that legislation is necessary.” [Colored & bold emphasis added.]

United States: 2015 oil and gas regulatory outlook (Jan 26) — Mondaq

The U.S. government recently announced plans for a number of regulatory initiatives in 2015 that will affect the oil and gas industry.

  • VOC and Methane Emissions
    EPA & Department of Interior, Bureau of Land Management
  • Hydraulic Fracturing
    Department of Interior, Bureau of Land Management
    Proposed Rule

Europe & The World

Global gas prices converge (Jan 27) — The Maritime Executive

Global benchmark prices for natural gas have converged to their closest in five years, a trajectory created by a supply glut and an oil rout. That spells trouble for U.S. and Australian projects coming online this year.

Prices in the natural gas hubs of Europe and Asia are at their closest to the U.S. benchmark since 2010 after oil plunged below $50 a barrel and gas supplies from Australia and the United States created a surplus of cargoes.

Asian prices may fall further as new projects come online in Australia and the United States, adding to the glut and depressing markets to the point that some of the facilities may not be able to export profitably. [Colored & bold emphasis added.]

Webmaster's comment: Shall we start a Pepto Bismol donation program for Downeast LNG president Dean Girdis to treat the anxiety ulcer that must be growing while his investors get increasingly nervous?

Pull the plug now, Dean Girdis; you'll be healthier for it, and you'll save a pile of money.

Bomb threat interrupts Lithuania LNG terminal (Jan 28) — The Maritime Executive

Gas supply from Lithuania's liquefied natural gas (LNG) import terminal was interrupted on Wednesday due to a bomb threat that later turned out to be a hoax, the terminal's operator Klaipedos Nafta said on Wednesday.

The floating terminal, leased from Norway's Hoegh LNG , was opened last year and received the first commercial LNG cargo from Norway in late December.


2015 January 26

Passamaquoddy Bay, Maine & New England

Crushing the U.S. energy export dream [Op-ed] (Jan 23) — The Maritime Executive

[This article also appears under the United States heading, below.]

Exporting crude oil and natural gas from the United States are among the dumbest energy ideas of all time.

The U.S. imports almost half of the crude oil that we use. We import 7.5 million barrels per day. The chart below shows the EIA prediction that production will slowly fall and imports will rise (AEO 2014) after 2016.

This means that the U.S. will never be self-sufficient in oil. Not even close. [Colored & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis must be furious at geologist-author Arthur Berman. From Berman's website:

Arthur E. Berman is a geological consultant with thirty-three years of experience in petroleum exploration and production. He currently is consulting for several E&P companies and capital groups in the energy sector. He frequently gives keynote addresses for investment conferences and is interviewed about energy topics on television, radio, and national print and web publications including CNBC, CNN, Platt’s Energy Week, BNN, Bloomberg, Platt’s, Financial Times, and New York Times.

Region needs energy upgrades, including more natural gas pipeline capacity, says grid operator ISO New England —, MA

Environmental advocates say increasing natural gas pipeline capacity is wrong-headed. Katherine Eiseman, director of Mass. Pipeline Awareness Network (MassPLAN) notes that demand for electricity has not been increasing in New England, thanks to advances in energy efficiency.

"ISO New England should focus on measures that reduce peak demand, including fuller implementation of the Demand Response Program they have in place. Reducing peak demand is the best way to reduce unnecessary costs of expanding gas infrastructure," said Eiseman.

Rich Cowan of Dracut Pipeline Awareness maintains that a billion cubic feet of existing pipeline serving Massachusetts and the region is underutilized, and should be deployed before new capacity is built.

"Better use of the Portland Natural Gas and Maritimes & Northeast Pipelines, and more natural gas storage in the Maritimes, can solve the peak day problems if they recur," said Cowan. [Colored & bold emphasis added.]

ISO corrects its big mistake — and will count renewable energy — Conservation Law Foundation, Boston, MA

At the January 21, 2015 meeting of the ISO’s Planning Advisory Committee (PAC), the ISO made clear that – for the first time in its history – the ISO is going to count renewable energy Distributed Generation (DG) in calculating how much electricity capacity it buys in its annual “Forward Capacity Auction” (FCA). Although many details remain to be worked out, this is a big win for renewable energy – and one that CLF has been fighting for literally for years.

Once a year, the ISO runs a “Forward Capacity Auction” (FCA).…

For years, CLF (and others) have been arguing that, when the ISO calculates its annual ICR (Installed Capacity Requirement) figure, it needs to account for renewable energy DG (Distributed Generation) that is actually on the New England electricity grid or expected to be during the relevant period. The title on my October 15 blog post was: “The ISO’s big Mistake: Not Counting Renewable Energy.”

The good news now is that the ISO got the message that CLF, NESCOE, and FERC have all been sending. At the January 21, 2015 meeting of the PAC, ISO staff reported that they will include some renewable energy DG in the calculation of the ICR for FCA-10. While CLF is not completely satisfied with the methodology that the ISO proposes to use, this is nevertheless a huge step forward – because it means that we can now discuss how to account for renewable energy on the system rather than whether to account for it. [Colored & bold emphasis added.]

Gulf of Mexico

FERC releases schedule for environmental review of Trunkline LNG’s Lake Charles export project — LNG Law Blog

FERC has issued notice that on August 14, 2015 it will release its final environmental impact statement for Trunkline LNG’s proposed liquefaction and export terminal at Lake Charles La. Other federal agencies having jurisdiction will have until November 12, 2015 to finalize their review of the project.

United States

Crushing the U.S. energy export dream [Op-ed] (Jan 23) — The Maritime Executive

[This article also appears under the Passamaquoddy Bay heading, above.]

Exporting crude oil and natural gas from the United States are among the dumbest energy ideas of all time.

The U.S. imports almost half of the crude oil that we use. We import 7.5 million barrels per day. The chart below shows the EIA prediction that production will slowly fall and imports will rise (AEO 2014) after 2016.

This means that the U.S. will never be self-sufficient in oil. Not even close. [Colored & bold emphasis added.]

Webmaster's comment:Downeast LNG president Dean Girdis must be furious at geologist-author Arthur Berman. From Berman's website:

Arthur E. Berman is a geological consultant with thirty-three years of experience in petroleum exploration and production. He currently is consulting for several E&P companies and capital groups in the energy sector. He frequently gives keynote addresses for investment conferences and is interviewed about energy topics on television, radio, and national print and web publications including CNBC, CNN, Platt’s Energy Week, BNN, Bloomberg, Platt’s, Financial Times, and New York Times.


2015 January 25

New England

As cold sets in, region’s winter energy 'crisis' fizzles (Jan 24) —, Keene, NH

Now deep into winter, with many cold days behind us, New England’s electric market is faring much better than expected. Despite months of talk about a “crisis” of energy shortages and ever-higher prices, wholesale prices for electricity and natural gas are running well below last year, and power plants are getting the fuel they need to run, even in very cold weather. Households and businesses should see lower bills by summer at the latest. This reality should calm alarmed policymakers and encourage them to think more deliberately about our energy future.

So far, what happened last winter isn’t happening this winter. In December, New England wholesale electricity and natural gas prices were down 55 percent and 64 percent from last year, respectively. In January, we’ve seen some price increases on cold days, but much less than last year. In the bitterly cold weather earlier this month, we had enough natural gas to heat our buildings and serve power plants, without any more pipeline capacity than we had last winter. The market also appears to be taking the 2014 retirements of several large old power plants in stride.

Last week, two Maine utilities that avoided setting rates last fall set their 2015 prices, and their supply costs dropped to 6.5 cents per kilowatt-hour — less than half what many New Englanders are paying this winter.

With the winter energy crisis narrative fizzling before our eyes, New England has an opportunity to pursue more incremental, market-oriented measures to meet our energy needs at a reasonable cost, reduce our fossil fuel consumption and carbon pollution, and make better use of the infrastructure we have. In a market that can turn on a dime, these are smart moves, and they are already paying off this winter. [Colored & bold emphasis added.]

Webmaster's comment: Existing LNG infrastructure defeats Downeast LNG's import and export asperations, as it has even from Downeast LNG's 2004 beginnings.


David Kyler: 'Progress' that Georgia can do without [Opinion] (Jan 24) — Savannah Morning News, Savannah, GA

According to a survey that was reported in a recent newsletter of Georgia Sierra Club, more than 80 percent of Georgians are convinced that climate change is real, caused by humans and in urgent need of political action, yet state officials continue to ignore or deflect the issue.

  • Liquefied Natural Gas (LNG) is now proposed for distribution worldwide from a precarious coastal site at Elba Island east of Savannah, adjacent to a major shipping channel. In addition to the obvious public-safety risks, a problem ignored by our officials (state and federal) is that much of this gas now comes from fracking operations that release heat-trapping methane at dangerous levels. Per ton, methane is 30 times worse than CO2 in global warming effects.
    According to authoritative sources, the latest research concludes that so much methane escapes when fracking is done that it completely negates the carbon-reducing advantages of burning gas instead of coal or oil. Therefore, facilities like those proposed at Elba Island will add to climate-overheating problems, not reduce them.
    To be honest but cynical, federal policy could be used to rationalize this bad decision-making, since EPA now controls only new sources of methane pollution, not existing ones, which are the greatest part of problem. Again, unwise political concessions have led to weak policies.

British Columbia

Les Leyne: LNG moving target moves some more (Jan 24) — Times Colonist, Victoria, BC

There was a change of tone this week in Premier Christy Clark’s pronouncements on the liquefied natural gas front.

Her remarks to reporters in Victoria constituted an acknowledgment that the master plan her government has been pursuing for the past several years might have to change. [Colored & bold emphasis added.]

Premier adapts LNG planning, blames tough economy (Jan 22) — Times Colonist, Victoria, BC

Clark said falling oil prices and a tough economy have altered the government’s LNG playbook, making it more difficult to predict which plants will go ahead or how. “We are still on track to meet our goal of [getting] three LNG plants up and running by 2020,” she said. “But it probably won’t happen in the order that we had originally anticipated it would happen, and that’s about being adaptable to change.”

Woodfibre LNG finalizing $25m land purchase in Squamish (Jan 22) — Business in Vancouver, Vancouver, BC

Woodfibre’s 2013 purchase agreement with Western Forest Products for the 212 acres of waterfront land was dependent on remediation of the site and the granting of a certificate of compliance from B.C.’s environment ministry. That certificate was granted in November, according to Nathan Gloag, Woodfibre LNG’s project manager.

Environmental groups, including My Sea to Sky, have vigorously opposed the planned LNG processing and export facility set for about five kilometres southwest of downtown Squamish.

According to Rich Wildman, an environmental chemist from Quest University who is also on the district’s Woodfibre LNG Community Committee, the better questions are not being asked about the impact of the facility on marine life.

Wildman said global research has been conducted to make sure intakes and outtakes of water are relatively safe, but not enough research has been done on the acoustic impact of facilities such as Woodfibre’s proposed plant. [Colored & bold emphasis added.]

North America

Natural gas producers share pain of low prices (Jan 24) — Times Colonist, Victoria, BC

Oil prices are at five-year lows, and natural gas prices aren’t doing much better. And unless the winter gets very cold very quickly, that’s not about to change dramatically.

Natural gas prices at AECO averaged $3.18 per thousand cubic feet for 2013 and $4.47 last year. This month, the price has hovered around $2.82 per mcf.

According to FirstEnergy, U.S. domestic supply growth has been running between five and six billion cubic feet per day higher than it was a year ago, and there are no signs of a slowdown.

By the end of the winter, said Robert Ineson of IHS — who spoke at a Conference Board of Canada summit this week — natural gas storage in the U.S. will exceed the five-year average.

The story is no different in Canada, with 2014 the best year for growth in natural gas supply since 2001.

With prices so low, it’s no wonder the industry is looking hungrily to LNG [exporting] as an avenue that could eventually provide some uplift to natural gas prices. But that’s anything but a slam dunk.

According to FirstEnergy’s analysis, if the landed LNG price is $9 per mmBtu, and the cost of gas is $3, the netbacks at a 3.5 per cent royalty — post capital cost payout — is $1.21 per mmBtu. In other words, projects that were counting on a big netback are looking at an entirely different reality today.

Without robust LNG export capabilities, the North American market will remain a victim of its own success in terms of increasing natural gas productivity that saw 330 rigs boost production to record levels in the U.S. last year. [Colored & bold emphasis added.]


2015 January 23

New England

LNG better than pipe dream [Op-ed] —, Worcester, MA

…Various proponents claim that the projects will deliver cheap natural gas from the Marcellus Shale region in Pennsylvania into New England, solving everything from supply constraints on very cold days to high electricity prices year-round.

But state officials from across New England are proposing to pay for these projects — totaling some $5 billion to $6 billion collectively — through rate increases to be borne totally by homeowners and businesses across New England, 365 days a year for 15 to 20 years.

One might then also ask if these pipelines, built and paid for by consumers in New England, would ever be used to transport natural gas that would then be exported out of the country, adding profit for the pipeline companies but not the ratepayers who financed the infrastructure. One proponent recently confirmed that these pipeline projects proposed for New England could indeed be attractive conduits for export opportunities.

New England needs supplemental natural gas to meet peak demand during the coldest winter days. There's no doubt about it. But shouldn't a solution that addresses only peak demand be preferable to one involving an enormous expansion of costly pipelines? Why does it make sense to build and scale pipelines to meet demand peaks 30 to 40 days of the year? It only would if pipeline companies don't have to assume financial risk, but rather have consumers pay the costs.

A better solution? Continue to supplement existing pipeline gas with LNG to satisfy the demand peaks that occur 30 to 40 days of the year. It will be less costly and less disruptive than building expensive pipelines that consumers would pay for year-round and for many years to come. [Colored & bold emphasis added.]

Webmaster's comment: Continuing to rely on importing LNG is no solution. Distrigas of Massachusetts president Frank Katulak (Everett LNG terminal and now-out-of-service Neptune LNG offshore from Boston) omits one critical principle in his op-ed piece: LNG importing also has an ongoing cost to consumers — and to the entire planet — in the form of greenhouse gas and other pollution, not to mention the expenses to taxpayers for extraordinary security measures accompanying each LNG ship transit, and the accompanying stress to civilians subjected to the accompanying Hazard Zones. The best solution is to develop massive renewable capability, replacing as much hydrocarbon energy as possible.

British Columbia

Natural gas' impact on GHG emissions overstated, says Pembina — EcoLog

[This article also appears under the North America heading, below.]

“In the absence of strong climate policy, LNG simply feeds an increasing energy demand with additional fossil fuels,” said MacNab.


Peru ships more LNG to Mexico — LNG World News

According to Perupetro, the 173,600 cbm Castillo de Santisteban LNG carrier departed from Peru’s facility on January 16, with the exact destination of the vessel remaining unknown.

North America

Global LNG prices fall on lackluster demand — The Maritime Executive

Asian spot liquefied natural gas prices for March delivery fell sharply for a second week as traders said supply disruptions failed to derail the market's downward trajectory weighed by weak demand. [Colored & bold emphasis added.]

Natural gas' impact on GHG emissions overstated, says Pembina — EcoLog

[This article also appears under the British Columbia heading, above.]

“In the absence of strong climate policy, LNG simply feeds an increasing energy demand with additional fossil fuels,” said MacNab.


2015 January 22


Poliquin: Speed up the gas pipeline permitting process (Jan 21) — MPBN

WASHINGTON - Maine 2nd District Republican Congressman Bruce Poliquin is voicing support for legislation making its way through Congress that's designed to speed up the permitting process for natural gas pipelines.

The Natural Gas Pipeline Permitting Reform Act would give the Federal Energy Regulatory Commission 12 months to approve a project after receiving a completed application.

Other licensing agencies would have 90 days to issue their approvals. Failure to meet the deadlines would mean the project would automatically be approved.

Concerns have been raised that the measure would not give regulatory agencies enough time to complete thorough reviews. President Obama says he'll veto the measure in its present form. [Colored & bold emphasis added.]


Governors must reject LNG proposal [Editorial] —, Garden City, NY

It’s time for both Govs. Andrew Cuomo and Chris Christie to step up and put an end to Port Ambrose, the proposed liquefied natural gas terminal that Liberty Natural Gas LLC is looking to build 19 miles off the coast of Jones Beach.

Liberty Natural Gas’s proposal is the latest of several attempts to build a liquefied natural gas terminal. In 2010, after years of community opposition, a plan to develop a terminal 13 miles off Long Beach — nicknamed “Insanity Island” by its opponents — was shelved when the developer, the Atlantic Sea Island Group, backed away due to an uncertain economy and the widespread condemnation of the BP oil spill in the Gulf of Mexico.

Liberty proposed a similar terminal off the coast of New Jersey, but Christie vetoed the plan in 2011. In 2012, Liberty withdrew a revised application, again amid public criticism, but filed its current proposal months later. A heated meeting at the Allegria Hotel in Long Beach in July 2013 further illustrated public outrage over the plan.

The company maintains that the project would greatly reduce gas prices in our area, but a wind turbine farm has been proposed for the same area of the Atlantic, and many experts say that the renewable energy the wind would produce could do more to stabilize prices, create jobs and protect the environment. And the LNG port would connect to the existing Transco natural gas pipeline, which runs under Long Beach. Opponents contend that the terminal would create the potential for an offshore or onshore catastrophe, and would be vulnerable to a terrorist attack. Though Liberty insists that the project would be safe and would have little impact on our area, the possibility of a spill or other accident remains a risk that we cannot afford.


Quebec LNG project would depend on Canadian, U.S. natgas — Natural Gas Intelligence [Paid subscription]

The 23rd entry in the Canadian lineup to break into global trade in liquefied natural gas (LNG) plans to ship a blend of domestic and U.S. production out into the Atlantic from a new Quebec terminal.

Titled North Shore LNG, the scheme calls for a gas refrigeration and loading dock site beside the St. Lawrence River 150 kilometers (93 miles) east of Montreal at Becancour.

North Shore LNG stands out as a low-budget entry into the LNG arena. By far the smallest and cheapest entry into the Canadian project lineup to date, North Shore LNG is forecast to cost US$570 million.

Half the plant's capacity would serve remote markets in Quebec and the Atlantic provinces, which remain beyond the sparse eastern Canadian pipeline network, according to the NEB filing. The other half would go as opportunities arise to the United States, Europe and the Caribbean. [Colored & bold emphasis added.]

Webmaster's comment: North Shore LNG's site selection is exceedingly bay, requiring LNG ships to transit past Quebec City, violating LNG industry terminal siting best safe practices published by SIGTTO.


American LNG Marketing files DOE LNG export application — LNG Law Blog

American LNG Marketing LLC (American LNG) has filed an application with the U.S. Department of Energy for authority to export over a 20-year period up to 60,000 metric tons per year (3.02 Bcf) of LNG from a liquefaction facility under construction in Medley, Fla. American LNG proposes to export the LNG via ISO containers to Central American and Caribbean nations with and without a Free Trade Agreement with the United States. [Colored & bold emphasis added.]

Webmaster's comment: Such LNG container exports would not use LNG ships. This is the same method being used to ship LNG to Hawaii, for which FERC determined does not constitute an "LNG port"; thus, no FERC permitting was required to import LNG into Hawaii.

Gulf of Mexico

FERC intends to draw up EIS for Venture Global’s Calcasieu Pass LNG project — LNG World News

The scoping period opened with this notice will close on February 19, 2015.

Venture Global’s liquefied natural gas export facility will have an export capacity of ten million metric tons per year of LNG and will accommodate ocean-going vessels with an LNG carrying capacity of up to 185,000 cubic meters. The project site will include two full containment LNG tanks with approximately 200,000 cbm storage capacity.

British Columbia

Squamish council votes down LNG pipeline drill tests — Vancouver Observer, Vancouver, BC

In a showdown over fossil fuel development versus preservation of the environment, Squamish Council voted narrowly to deny FortisBC permission for test drilling for a natural gas pipeline that would feed the proposed $1.6-billion Woodfibre LNG export plant.

Newly elected Mayor Patricia Heintzman, and three other councillors rejected FortisBC’s permit application in a four-to-three vote Tuesday night. More than one hundred people crammed the council building to witness the ruling.

…[T]he proposed drilling did not meet Squamish District’s environmental guidelines for riparian areas, the mayor said. She added that Squamish’s standards are higher than the province’s guidelines.

Fracking and consumerism — The Squamish Chief, Squamish, BC

Asking the tough questions of LNG

The use of fractured gas is one of the common grounds for opposing Woodfibre LNG’s plan to build a liquefied natural gas export plant near Squamish.

Vaughn Palmer: Oil slide won’t wipe out B.C.’s bottom line, premier says — The Vancouver Sun, Vancouver, BC

…[Premier Christy Clark]: “When you look at declining oil prices, the script that we had for liquefied natural gas is not going to proceed, we don’t think, in the way we expected it to do. It could change every week … but it probably won’t happen in the order we originally anticipated it would happen.”

Dialogue paves way for future talks — Coast Reporter, Sechelt, BC

A dialogue panel to discuss the proposed Woodfibre Liquefied Natural Gas (LNG) export facility just outside of Squamish convened last Wednesday Jan. 14, at St. Hilda’s Church in Sechelt to talk about the pros and cons of LNG.

Moderated by business etiquette expert Margaret Page, panelists Dr. Eoin Finn, Jef Keighley, Lois Boxill and Richard (Hergy) Hergesheimer discussed their mostly concurrent opinions.

“B.C. has bi-legislation agreeing to reduce its [greenhouse gas] footprint by 20 per cent by 2020 — five years from now — and 80 per cent by 2050,” Finn said. “These LNG plans will burn about 10 per cent of their natural gas fuel, the carbon footprint of B.C. will not decrease by 20 per cent by 2020, but will actually increase by 33 per cent by 2020 — breaking our own laws.”

LNG in B.C. gets first final investment decision — kind of — Alaska Highway News, Fort St. John BC

Sales contracts have yet to be announced, regulatory work is far from being completed, no environmental assessments have been conducted for LNG facilities and no deals have been reached with local First Nations.

There’s no pipeline or export license, either.

Canada Stewart Energy delays final investment decision, in-service date — Alaska Highway News, Fort St. John BC

Don’t expect a final investment decision any time soon from liquefied natural gas (LNG) export proponent Canada Stewart Energy Group Ltd.

Their in-service has been pushed back the better part of a decade, to 2025 from 2017, according to a representative with the project. The representative could not say when a final investment decision, previously slated for 2014, can now be expected.

Stewart is a small community about 300 km north of Prince Rupert that was put on the LNG map when Canada Stewart Energy Group proposed establishing an LNG liquefaction and export facility there in March 2014.… [Colored & bold emphasis added.]

No local meeting for LNG project — Coast Reporter, Sechelt, BC

The Environmental Assessment Office (EAO) has accepted Woodfibre LNG’s application for an environmental assessment certificate and the public now has until March 9 to bring forward any concerns, but it looks like Coasters won’t get the opportunity to do so in their home town.

The EAO didn’t require Woodfibre LNG to hold a meeting on the Coast because the office felt the meeting in Vancouver was in close enough proximity for residents, a representative from the EAO told Coast Reporter this week.

“I emailed them telling them it’s either an unfortunate oversight or a deliberate attempt to deny constituents an opportunity to express their views on the project,” Simons said. “I sent it quite recently so I haven’t had a response. It’s absolutely ridiculous that they think this is a good process. It’s basically cheating the public of its right to participate.”


Learn strategies to fight LNG projects — The World, Coos Bay, OR

COOS BAY — The Coos Commons Protection Council will host a discussion on community rights and democracy in Coos County with a focus on the proposed Pacific Connector Gas Pipeline and Jordan Cove LNG export terminal.

"Learn how communities, in Oregon and other states, are changing the rules of the game, squaring up against pipeline corporations and their own government, and taking back their rights to health, resiliency, and greater democracy for people and nature."

Oregon stays Coastal Zone Management Act certification for Jordan Cove energy project and Oregon LNG terminals — LNG Law Blog

The Oregon Department of Land Conservation and Development (OLCD) has entered into agreements with Jordan Cove Energy Project and Oregon LNG staying the deadline by which OLCD must review those companies’ certification that their proposed LNG terminal projects are consistent with Oregon’s Coastal Management Program under the federal Coastal Zone Management Act. OLCD’s decision on Jordan Cove Energy Project’s Consistency Certification is now due by July 30, 2015. OLCD’s decision on Oregon LNG’s Consistency Certification is now due by April 27, 2015. [Colored & bold emphasis added.]


Record new LNG supplies to pull prices down further, boost demand: Bernstein (Jan 21) — Reuters

The next two years will see the biggest ever additions made to liquefied natural gas (LNG) supplies, almost all in Asia, putting further pressure on prices that have halved over the past year.

Not only are LNG volumes rising, the supply map is also changing. Australia, source of most of the new production, will move ahead of Malaysia as the world's No.2 LNG exporter this year, and by 2018 will become the biggest supplier ahead of Qatar, data from Wood Mackenzie shows.

"Spreads in gas price between Asian LNG and U.S. gas have fallen by 50 percent from $12 to 6 (per mmBtu). With liquefaction and shipping costs of US$6.50, arbitrage margins are now negative," Bernstein said. [Colored & bold emphasis added.]


2015 January 21

Passamaquoddy Bay

Bernstein sees U.S. LNG plants scrapped as buyers look elsewhere — Bloomberg Businessweek

[This article also appears under the United States heading, below.]

Most of the proposed liquefied natural gas plants meant to ship cargoes out of the U.S. will “never be built” as the collapse in oil prices damps global demand for the nation’s gas, according to Sanford C. Bernstein & Co.

“The LNG industry is suffering from an anxiety attack over falling oil prices and uncertainty around global growth,” said Beveridge. “We expect buyers’ appetite for U.S. LNG to be diminished as they reappraise supply options in a lower oil price environment.”

The U.S. has received 47 applications to export nearly 80 billion cubic feet per day of gas in its liquefied form, according to the Energy Department.…

U.S. LNG is only competitive in the Pacific if long-term Henry Hub gas prices are below $4 per million British thermal units and Brent crude is sold above $80 a barrel, according to Bernstein. So far in January, natural gas futures have averaged $2.97 in New York while London-traded Brent oil contracts are at $49.89 a barrel. [Colored & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis must be buying Pepto Bismol by the gallon.

Only two B.C. LNG projects to proceed as industry faces ‘anxiety attack': analyst — Financial Post, Don Mills, ON

[The article also appears under the British Columbia heading, below.]

Only two of the major liquefied natural gas projects proposed in British Columbia are expected to proceed as the global industry suffers from an “anxiety attack” due to low commodity prices, according to a new report.

Shell’s $40-billion LNG project is forecast to start-up by 2021 if a final investment decision is secured by 2016, according to Bernstein. Kitimat LNG, the other major project being sponsored by Chevron and new partner Woodside, will likely see first shipment by 2023, the bank estimates.

Projects with a total combined capacity of 103 million tonnes per annum have been proposed for Canada, in addition to the 278 mtpa in the U.S. Those exceed the current total global LNG demand by 50%.

“Near-term [supply-demand] fundamentals and low oil-prices can keep LNG prices low, but prices in an $8-$10 range make as yet unsanctioned LNG projects look overwhelmingly uneconomic, with even U.S. exported LNG to Asia and Europe uneconomical at current prices,” Citibank analyst Seth M. Kleinman said.

Most of the proposed U.S. export LNG plants will “never be built” due to the collapse in oil prices, Mr. Beveridge of Bernstein said. “We expect buyers’ appetite for U.S. LNG to be diminished as they reappraise supply options in a lower oil price environment.”

[A]t least eight new LNG projects in Australia are set to add a further 60 mtpa of global capacity over the next two years. [Colored & bold emphasis added.]

New Brunswick

Canaport LNG bird kill results in 2 more companies being charged — CBC News

Irving Canaport GP Company Ltd., and Repsol Canada Ltd., are now also facing charges in connection with thousands of migratory birds being killed at the Canaport LNG plant in 2013.

Canaport LNG Limited Partnership was previously charged with three offences in the incident, including two alleged violations of the Migratory Birds Convention Act and one from the Species at Risk Act.

But on Wednesday, the Crown withdrew the three charges against Canaport LNG and re-entered them with the addition of Irving Canaport GP and Repsol.

An estimated 7,500 songbirds were killed when they flew into a gas flare at the Saint John plant in September, 2013.

Irving Oil faces questions about pipeline at Canaport LNG — CBC News

CBC review shows Irving Oil is doing three times the business of the Canaport LNG terminal

Irving Oil Ltd. is facing more questions about its use of a pipeline that was built on the property designated for the Canaport LNG facility.

Irving converted the LNG wharf to receive oil last year. Since September 2014, six oil tankers have unloaded at the LNG wharf.

Complicating the issue, Irving Oil never actually got final permission to build the new oil pipeline.

The provincial legislation that created the tax deal says it applies to property "solely for receiving" LNG. There are discussions underway at Canaport to convert the facility to manufacture and export LNG instead.


Fracktivists fight liquefied natural gas terminal near NYC — Grist

New York state’s fracking fight has moved offshore. And now the key players include not just New York Gov. Andrew Cuomo (D) but also New Jersey Gov. Chris Christie (R).

New York’s famously dedicated anti-fracking activists, who last year helped push Cuomo to ban the practice entirely, have teamed up with coastal conservation groups to stop a proposed liquefied natural gas (LNG) terminal from being built 19 miles off the coast of Long Island and only 30 miles from New York Harbor, the nautical entry point at the heart of New York City. Environmentalists and residents of nearby communities, who have formed the No LNG Coalition to coordinate opposition to the project, fear gas leaks from the terminal could cause vapor clouds, fires, explosions, and damage to the ocean ecosystem. They also point out that it would be a ripe potential target for terrorists.

“The whole fight [against Port Ambrose] has been energized by the fracking movement in the last few years,” says John Weber, Mid-Atlantic regional manager for the Surfrider Foundation, an advocacy group that focuses on the health of oceans and coastal ecosystems.

And fracktivists oppose building any major fossil fuel infrastructure because they are committed to the broader fight against climate change. Why, they wonder, would we invest in exporting or importing natural gas, when we should instead be building clean energy capacity? “One thing that resonates with people is the availability and desirability of alternatives,” says Patrick Robbins, spokesperson for the Sane Energy Project, a New York-based grassroots anti–fossil fuel organization. Robbins notes that the Port Ambrose site is part of an area in which the federal Bureau of Ocean Energy Management is collecting proposals for an offshore wind farm. (Liberty says the LNG terminal would only require a small portion of the area being considered for wind farms.) [Colored & bold emphasis added.]

Plant foes plan big week (Jan 20) —

Lusby, MD – As the opponents of a $3.8 billion project in Lusby see it, resistance is an option. A group that has dubbed itself “We Are Cove Point” has outlined a weekend schedule to ramp up its campaign to fight the transition of a local gas importation plant to one that exports liquefied natural gas (LNG) to foreign countries.

The group is also planning to confront newly inaugurated Maryland Governor Larry Hogan Wednesday afternoon, Jan. 21 during an early afternoon state house reception in Annapolis. The purpose for attending the reception is to let Hogan know they oppose hydraulic fracturing—pejoratively known as fracking—in Western Maryland. The new governor has previously indicated he supports implementation of the drilling method for extracting natural gas from the state’s portion of the Marcellus shale.

We Are Cove Point has announced it will be training resistance volunteers for a door-to-door canvass of the area surrounding the plant and is already raising money.

The canvassers will have citizen complaint forms that they will be distributing to residents living within eight tenths of a mile radius of the Cove Point plant. Those people, said Eno, are at risk should a flash fire occur at the plant.

British Columbia

Only two B.C. LNG projects to proceed as industry faces ‘anxiety attack': analyst — Financial Post, Don Mills, ON

[The article also appears under the Passamaquoddy Bay heading, above.]

Only two of the major liquefied natural gas projects proposed in British Columbia are expected to proceed as the global industry suffers from an “anxiety attack” due to low commodity prices, according to a new report.

Shell’s $40-billion LNG project is forecast to start-up by 2021 if a final investment decision is secured by 2016, according to Bernstein. Kitimat LNG, the other major project being sponsored by Chevron and new partner Woodside, will likely see first shipment by 2023, the bank estimates.

Projects with a total combined capacity of 103 million tonnes per annum have been proposed for Canada, in addition to the 278 mtpa in the U.S. Those exceed the current total global LNG demand by 50%.

“Near-term [supply-demand] fundamentals and low oil-prices can keep LNG prices low, but prices in an $8-$10 range make as yet unsanctioned LNG projects look overwhelmingly uneconomic, with even U.S. exported LNG to Asia and Europe uneconomical at current prices,” Citibank analyst Seth M. Kleinman said.

Most of the proposed U.S. export LNG plants will “never be built” due to the collapse in oil prices, Mr. Beveridge of Bernstein said. “We expect buyers’ appetite for U.S. LNG to be diminished as they reappraise supply options in a lower oil price environment.”

[A]t least eight new LNG projects in Australia are set to add a further 60 mtpa of global capacity over the next two years. [Colored & bold emphasis added.]

CNOOC affiliate, Aurora LNG, files revised project description for proposed B.C. LNG terminal — LNG Law Blog

Aurora LNG, a joint venture among Nexen Energy ULC (an affiliate of Chinese energy company China National Offshore Oil Corporation (CNOOC)), INPEX Corporation, and JGC Corporation, has filed a revised project description with the British Columbia (B.C.) Environmental Assessment Office for a proposed LNG export terminal on Digby Island, near Prince Rupert, B.C. The terminal is anticipated to be constructed in phases, with the first phase consisting of two gas liquefaction trains with a production capacity of 10–12 million tonnes per year of LNG, and the marine terminal. The first shipment of LNG from the project is expected in 2023.

What's that? More pipelines? (Jan 20) — Terrace Standard, Terrace, BC

Area residents can expect a renewed round of pipeline talk as plans advance for two more large liquefied natural gas (LNG) projects near Prince Rupert.

Each would require a gas-carrying pipeline from northeastern B.C. to pass through the area on the way to the coast.

The project which could feed off a new pipeline proposal is Aurora LNG, majority owned by China’s CNOOC Ltd. through its Canadian arm called Nexen.

United States

Bernstein sees U.S. LNG plants scrapped as buyers look elsewhere — Bloomberg Businessweek

[This article also appears under the Passamaquoddy Bay heading, above.]

Most of the proposed liquefied natural gas plants meant to ship cargoes out of the U.S. will “never be built” as the collapse in oil prices damps global demand for the nation’s gas, according to Sanford C. Bernstein & Co.

“The LNG industry is suffering from an anxiety attack over falling oil prices and uncertainty around global growth,” said Beveridge. “We expect buyers’ appetite for U.S. LNG to be diminished as they reappraise supply options in a lower oil price environment.”

The U.S. has received 47 applications to export nearly 80 billion cubic feet per day of gas in its liquefied form, according to the Energy Department.…

U.S. LNG is only competitive in the Pacific if long-term Henry Hub gas prices are below $4 per million British thermal units and Brent crude is sold above $80 a barrel, according to Bernstein. So far in January, natural gas futures have averaged $2.97 in New York while London-traded Brent oil contracts are at $49.89 a barrel. [Colored & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis must be buying Pepto Bismol by the gallon.

Record new LNG supplies to pull prices down further, boost demand: Bernstein — Reuters

(Reuters) - The next two years will see the biggest ever additions made to liquefied natural gas (LNG) supplies, almost all in Asia, putting further pressure on prices that have halved over the past year.

Not only are LNG volumes rising, the supply map is also changing. Australia, source of most of the new production, will move ahead of Malaysia as the world's No.2 LNG exporter this year, and by 2018 will become the biggest supplier ahead of Qatar, data from Wood Mackenzie shows.

Also, a newcomer to LNG exports in 2015 is the United States, although the current low prices will make it difficult for [US] LNG to come to Asia.

Hearing to be held on bill seeking faster LNG exports — LNG World News

The Senate Energy and Natural Resources Committee said it will hold a hearing on the LNG Permitting Certainty and Transparency Act.

The bill specifically requires the Secretary of Energy to make a decision on any LNG export application within 45 days after the environmental review document for the project is published.

It would also provide an applicant with expedited judicial review if the secretary fails to act within 45 days or if the project is subject to a legal challenge and would require LNG exporters to disclose the country or countries to which LNG has been delivered and require the Secretary to make this information available to the public.


2015 January 20

British Columbia

Costly Canadian LNG projects suffer setbacks — Hydrocarbon Engineering

Business Monitor International (BMI) has downgraded its Canadian natural gas production forecast due to increasingly uncompetitive LNG project economics amid lower international oil prices, both of which will negatively impact the outlook for gas production. Furthermore, high operating costs, limited midstream infrastructure, and uncertain Asian demand for Canadian LNG will continue to disincentivise investment in the sector. First mover advantage and competitive costs will be crucial for new entrants in the Asian Pacific LNG market as it will grow increasingly crowded with available suppliers.

Rising equipment and labour costs are challenging the competitiveness of new LNG projects, particularly in an increasingly bearish energy price environment. Development costs at an average LNG terminal in Canada are as much as twice that of similar facilities in the US due to limited existing infrastructure and inadequate midstream capacity. This is discouraging the advancement of proposed LNG export facilities.

…Ultimately, the Canadian government’s recent attempts to improve the LNG regulatory framework will prove inadequate as increasingly unfavourable project economics will discourage producers from following through with proposed LNG projects. [Colored & bold emphasis added.]

United States

United States: Legal and practical issues associated with the growing US Environmental Justice movement (Jan 16) — Mondaq

A key EJ policymaker in recent years has been the US Environmental Protection Agency (US EPA). In 2011, after a public comment period, US EPA released an ambitious agency initiative called "Plan EJ 2014," which the agency refers to as its "roadmap" for infusing the concept of EJ throughout all the agency's programs, policies and activities. Among other things, Plan EJ 2014 sets out US EPA's vision for incorporating EJ into formal rulemaking, permitting and compliance and enforcement activities. In conjunction with Plan EJ 2014, US EPA has prepared a 120-page document called "Legal Tools" which, among other things, lists multiple statutory provisions of federal environmental laws (including the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, RCRA, EPCRA and CERCLA) that US EPA believes can be interpreted to incorporate its EJ efforts. [Colored & bold emphasis added.]

United States: Colette Honorable sworn in as FERC commissioner (Jan 19) — Mondaq

On January 5, 2015, Colette Honorable was sworn in as a FERC Commissioner. Commissioner Honorable's nomination was approved by the U.S. Senate Committee on Energy and Natural Resources on December 11, 2014, and confirmed by the Senate on December 16, 2014. Commissioner Honorable's arrival brings the number of FERC Commissioners to five, reflecting a full Commission by filling the vacancy created when former Commissioner John Norris resigned from FERC in August 2014.


Ukraine and Poland agree to build interconnecting LNG pipeline (Jan 19) —

KIEV, Jan. 19 - Ukraine and Poland agreed to build an interconnecting pipeline that will give Ukraine access to liquefied natural gas supplies via LNG terminals in the Baltic Sea, Prime Minister Arseniy Yatseniuk said Monday.

The agreement, signed by the national energy company Naftogaz Ukrayiny and Polish gas pipeline operator Gaz-System S.A., calls for building the interconnector with capacity of 10 billion cubic meters per year.


2015 January 19


LNG Port Ambrose fight heats up — The Rockaway Times, Rockaway, NJ

The fight against the Liberty LNG Port Ambrose project has started to catch fire. Hundreds of elected officials, community leaders and local residents met at a public hearing at the JFK Airport Hilton on Wednesday, January 7, to express their thoughts on the liquefied natural gas site proposed off the coast of Jones Beach.

Among those opposed were local officials Councilman Donovan Richards and Assemblyman Phil Goldfeder. Goldfeder expressed dissatisfaction over the limited time for the public to comment. MARAD and USCG only gave 60 days for public comment after releasing the DEIS. In addition to the January 7 meeting, the only other public hearing was held in New Jersey on January 8. The public comments were supposed to be due February 10, but according to Goldfeder, the period is being extended for an additional 30 days, in response to his request for more community involvement. An additional public hearing will be scheduled before the comment period is over.

Gulf of Mexico

APGA opposes two LNG export applications — LNG World News

APGA [American Public Gas Association] said it has filed motions to intervene in opposition to two LNG export applications [Texas LNG and Venture Global LNG].

In its filings, APGA communicates that the export of LNG will “increase domestic natural gas prices, burdening households and jeopardizing potential growth in the U.S. manufacturing sector, as well as the nation’s transition away from more environmentally damaging fossil fuels.” [Colored & bold emphasis added.]


Scientists say warm 2014 proves 'undeniable fact' of climate change: Oregon environment roundup — The Oregonian, Portland, OR

Two scientists say safety measures for the proposed liquefied natural gas terminal in Coos Bay are worse than insufficient, The Oregonian’s Ted Sickinger reports. Jerry Havens, a chemical engineering professor at the University of Arkansas, and James Venart, an emeritus professor of mechanical engineering at the University of New Brunswick, have fled public comment against the terminal. They argue the proposed terminal’s layout would actually increase risks during a leak and raise concerns that the plan of response in the event of an accident, natural disaster or terrorist attack is lacking. [Colored & bold emphasis added.]

Webmaster's comment: Many of the same problems would exist at the proposed Downeast LNG terminal in Maine.

United States

U.S. Department of Energy: Our forecasts aren't really forecasts (or are they?) — OilVoice

Put this in the category of things that can't be true, but that are nevertheless affirmed with a straight face: The U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy, does not issue forecasts, at least not long run forecasts.

Here is the bureaucratese from the letter: "Contrary to the presentation in the Nature article, EIA does not characterize any of its long run projection scenarios as a forecast." Long run projection scenarios....huh. What could those actually be if not forecasts? And, why is the deputy administrator making such a big deal of this? We'll come back to the second question later.

The words "forecast," "forecasts" and "forecasting" appear 49 times by my count in the EIA's most recent nonforecast, its Annual Energy Outlook 2014 with projections to 2040. Those instances include this laudable gem: "By law, EIA's data, analyses, and forecasts are independent of approval by any other officer or employee of the United States Government."

I'm making a big deal of this because practically the entire world of policymakers, of business and governmental leaders, takes the EIA's nonforecasts very seriously. These leaders make critical policy and business decisions based on the "projections" in the nonforecasts. The leaders often use the agency's so-called reference case as if it were a statement of fact verified by specially-trained EIA time travelers who visit the future at the end dates for the EIA's projections and then return to present-day Washington, D.C. with numbers for the agency's forecasts.

Art Berman, a petroleum geologist and consultant, points out one very important emerging policy based on the EIA's rosy forecast for U.S. shale natural gas production. The U.S. Environmental Protection Agency is, in part, basing its greenhouse gas emissions policies--which are leading to the retirement of many coal-fired electric generating plants--on the EIA's projection of growing domestic natural gas production through 2040. That gas will presumably fuel less climate-damaging natural gas-fired generating plants that will replace the retired coal-fired ones. But what if the assumption of growing gas supplies through 2040 is wrong?

And, of course, there's more. The Federal Energy Regulatory Commission is busy approving liquefied natural gas (LNG) export terminals, believing that America will be facing a growing surplus of natural gas, all based on--you guessed it--the EIA's most recent forecasts. [Colored & bold emphasis added.]


Asian LNG demand much lower than expected: Global study — Gas Today

Wood Mackenzie Principal Analyst – Global LNG Giles Farrer said: "Demand in emerging markets, like China, failed to grow to the extent anticipated and demand in the established South Korean market fell considerably."

Lower demand from Asia contributed to the crash in LNG spot prices last year – which fell from a peak of over US$20/million British Thermal Unit (mmbtu) on Valentine's Day to under US$10/mmbtu at Thanksgiving. Mr Farrer added: "Prices dropped in the summer as new supply from PNG LNG and reduced Asian demand left the Pacific basin long supply. Then fell further – as Brent oil tumbled from $110/bbl in August to below $60/bbl in December. [Colored & bold emphasis added.]

Platts: Feb spot LNG prices to Asia plummet — LNG World News

Prices of spot liquefied natural gas for February delivery to Asia plunged to a four-year low, averaging $9.911 per million British thermal units, according to the latest Platts Japan/Korea Marker data for month-ahead delivery.

The February JKM average registered a 47.3% year over year drop, the largest on record since Platts began assessing the JKM in February 2009. The JKM reached levels not seen since February 2011, when it averaged $9.854/MMBtu.

With Asian buyers still holding high LNG inventories, many of the larger Japanese, South Korean and Chinese buyers were absent from the spot market for February cargoes. In contrast, the market has seen an increase in supply from projects in Russia and Australia, in addition to those cargoes on offer from projects in the Atlantic basin. [Colored & bold emphasis added.]


2015 January 16


Maine manufacturers: more natural gas needed to lower energy costs (Jan 13) — Maine Public Broadcasting Network (MPBN)

BANGOR, Maine - One thing Democrats and Republicans in Maine agree on, at least in general terms, is the need to get more natural gas into the state, sooner rather than later. High energy costs, and ongoing efforts to bring more pipeline infrastructure here, were the main topics of a breakfast forum put on this morning by the Bangor Region Chamber of Commerce.

"We are looking at significant pipeline constraints that have led to scarcity pricing in natural gas markets," says Mark Vannoy, who chairs the Maine Public Utilities Commission. Vannoy says this imbalance between supply and demand has resulted in high electricity costs, especially in the winter months.

Over the long-term, [House Majority Leader Freeport Democrat Sara Gideon] says Maine needs a larger mix of renewable souces to become truly energy independent. But in the short term, she says Democrats stand ready to work with Republicans to bring more natural gas to Maine.

Webmaster's comment: There appears to be a disconnect between the opinions offered in this article as compared to statements from the 2015 Jan 15 Conservation Law Foundation's article that indicate natural gas volumes available to Maine in winter are adequate.


Officials rally against LNG plan in Long Beach —

A week after they criticized plans for an offshore liquefied natural gas terminal at a meeting in Queens, officials gathered on the Long Beach boardwalk on Thursday to call on Gov. Andrew Cuomo to veto the plan, citing environmental, economic and safety concerns.

At a press conference led by City Council President Anthony Eramo, council members Fran Adelson and Len Torres, U.S. Rep Kathleen Rice (D-Garden City), State Assemblyman Todd Kaminsky (D-Long Beach), County Legislator Denise Ford (R-Long Beach) and Legislator Laura Curran (D-Baldwin) joined forces to oppose a company’s plan to build “Port Ambrose,” a liquefied natural gas terminal in the Atlantic Ocean 19 miles southeast of Jones Beach and 29 miles east of Long Branch, N.J.

Rice, other officials voice opposition to offshore natural gas project (Jan 15) — Newsday, New York, NY

Lawmakers against a proposed liquefied natural gas transfer station 17 miles off Long Beach pressed Gov. Andrew M. Cuomo Thursday to speak up and join them.

A federal law allows a nay from either Cuomo or his New Jersey counterpart, Gov. Chris Christie, to kill the plan because the station is close to shore and new pipes would have to be laid in state waters.

Gulf of Mexico

Air monitor in Texas fracking-boom country is up and soon to track pollution — InsideClimate News

The first air monitor in the heart of the fracking-intensive Eagle Ford Shale region of south Texas has been installed and will be in operation following calibration tests to assess its accuracy.

Placing the air monitor in Karnes County follows a recent air-quality study that tracked hydrocarbon emissions on the fringe of the region, pressure from local officials, news reports and residents worried about the air they breathe.

The monitor's findings will be compared with TCEQ's chemical exposure guidelines, which are used to assess the risk to humans.

But a review of TCEQ's comparative values by InsideClimate News and the Center for Public Integrity found that nearly 60 percent of the TCEQ guidelines for outdoor air quality are less protective than similar numbers used by the Environmental Protection Agency and by California, whose guidelines are among the strictest in the nation.

An investigation by InsideClimate News, The Center for Public Integrity and the Weather Channel in February 2014 disclosed that the TCEQ knows little about air quality in the area. The series, "Fracking the Eagle Ford Shale: Big Oil & Bad Air on the Texas Prairie," found that from Sept. 1, 2009, through Aug. 31, 2013, there was a 100 percent increase statewide unplanned toxic air releases associated with oil and gas production and that companies were rarely fined, even when inspections revealed they were operating equipment improperly.


Scientists say public safety hazards at Jordan Cove LNG terminal in Coos Bay are underestimated — The Oregonian, Portland, OR

A pair of scientists told federal regulators this week that safety measures incorporated in a proposed liquefied natural gas terminal in Coos Bay actually increase the chance of a catastrophic failure and present far more serious public safety hazards than those regulators have analyzed and deemed acceptable.

Jerry Havens, a chemical engineering professor at the University of Arkansas, and James Venart, an emeritus professor of mechanical engineering at the University of New Brunswick, filed a public comment Wednesday outlining their concerns with hazard modeling for the proposed Jordan Cove Energy Project.

Havens and Venart have both researched and published extensively on the fire and explosive risks of LNG and other materials during the last 40 years. Indeed, Havens authored two of the models that the FERC formerly used to model LNG spills and vapor cloud dispersion.

In their public comments, they conclude that Jordan Cove's hazard modeling provides inadequate safety exclusion zones due to the ballooning size of LNG facilities in general, and export facilities in particular due to their use of other chemicals. Those include propane and ethylene used to purify and refrigerate natural gas. Those gases are more flammable than natural gas and subject to high order explosions.

Havens said Thursday that the risk of such an event is probably very, very low. But in the last decade alone, he said, there have been four major international incidents involving explosions that destroyed facilities using similar gases as Jordan Cove. [Colored & bold emphasis added.]

United States

EPA chief plays defense on methane regs and Keystone — InsideClimate News

Gina McCarthy, the EPA administrator since 2013, defended the plan, issued this week, against criticism by environmentalists that it is too cautious because regulations would apply only to new oil and gas sources. The industry argues that the new rules aren't needed because methane emissions have already been declining.

In the protracted permitting history of Keystone XL, the EPA has been highly critical of the State Department's environmental analyses for failing to account adequately for higher greenhouse gas emissions associated with tar sands development. The State Department's environmental impact statement issued in January 2014 concluded that Keystone XL project would have minimal impact on greenhouse gas emissions.

[McCarthy's] comments at the time seemed to align with the Obama administration's posture. But in more recent comments, Obama has hinted skepticism about the Keystone XL pipeline, maintaining that the project would provide few benefits for the U.S. On Friday, McCarthy walked back her earlier comments, too, suggesting they had been misunderstood.

Questioned repeatedly about the methane plan, McCarthy said the rules for new sources of methane from oil and gas would "send a signal" to the industry about the kinds of improvements it needs to make on existing facilities. If the industry delivers substantial cuts on a voluntary basis, there might not be a need for rules for existing sites, she said. [Colored & bold emphasis added.]

Obama's methane crackdown to come slow and easy (Jan 14) — InsideClimate News

Cautious approach to regulating oil and gas industry disappoints environmentalists, who regard the plan as a 'toe in the water.'

The methane plan calls for the Environmental Protection Agency to propose methane reductions at new oil and gas sites by summer 2015 and issue a final rule next year. The goal is to cut the industry's emissions 40 to 45 percent below the 2012 level by the year 2025.

Despite being an important expansion of greenhouse gas regulations under the Clean Air Act, the proposed rule would not address methane leaking from existing oil and gas wells and delivery networks. Rather, the administration said it would work with industry on voluntary efforts to cut methane from existing oil and gas sites, which studies have found to be riddled with leaks.

"While setting methane standards for the first time is an important step, failing to immediately regulate existing oil and gas equipment nationwide misses 90 percent of the methane pollution from the industry," said Conrad Schneider, advocacy director for the Clean Air Task Force, a Boston-based environmental group. "The Administration is proposing to fight methane pollution with one hand tied behind its back, not using the full range of powers under the Clean Air Act to cut these emissions."

EPA headquarters, for example, shut down three investigations in Pennsylvania, Wyoming and Texas into possible well-water contamination after its regional investigators identified possible links to nearby oil and gas development. A major EPA study of the possible effects on water from oil and gas development has grown more and more circumscribed under industry pressure.

Emissions from natural gas production have dropped because of a 2012 EPA rule to cut VOCs from gas sites, and the new strategy would extend the VOC reductions to new oil wells, too. The VOC rule shows that "regulations work," Schneider said. "We have decades of evidence to show collaboration with industry hasn’t worked. Nothing ever stopped them from taking the voluntary steps over the last decade but voluntary efforts haven't resulted in the cuts needed." [Colored & bold emphasis added.]

Obama Administration unveils new methane emission rules (Jan 14) — InsideClimate News

The plan, the details of which were leaked out on Tuesday, falls well short of the cuts that activists say are needed to reach the administration's international climate change pledges. But the rules, which are expected to be finalized in 2016, will leave the door open to further regulation of the powerful greenhouse gas. [Colored & bold emphasis added.]

Obama to call for increased methane regulation in State of the Union Address (Jan 13) — InsideClimate News

The new methane rules – expected ahead of the State of the Union speech next week – are the last big chance for Obama to fight climate change, campaigners said.

Methane is the second biggest driver of climate change, after carbon dioxide. On a 20-year timescale, it is 87 times more powerful as a greenhouse gas.

US officials acknowledge that Obama will have to cut methane if he is to make good on his promise to cut US greenhouse gas emissions 17% from 2005 levels by 2020, and by 26% to 28% by 2025. [Colored & bold emphasis added.]

Webmaster's comment: The LNG industry contributes in many ways to methane emissions into the atmosphere.

Senate to hold hearing on bill to expedite U.S. LNG exports — LNG Law Blog

On January 29, 2015, the U.S. Senate Energy and Natural Resources Committee will hold a hearing on S. 33, the LNG Permitting Certainty and Transparency Act, which among other things, requires the Secretary of Energy to issue a final decision on an application to export LNG to countries without a Free Trade Agreement with the United States within 45 days from the publication of the required environmental report.


Global LNG: Prices slide as new supply trumps weak demand — (Reuters) Business Recorder, Pakistan

MILAN/LONDON: Asian spot liquefied natural gas prices for March delivery fell nearly 10 percent this week as a burst of supply offered by Nigeria and Australia, mild weather and weak demand drove losses.

"You have continuing tenders, obviously North West Shelf is going at it hammer and tongs, there's also a Sakhalin tender and Papua New Guinea has a couple of cargoes it needs to get rid of as well," one trader said. Supplies should improve as BG Group's new Queensland Curtis liquefaction plant in Australia ramps up exports, followed later in the year by the start-up of three other Australian projects.

Deepening backwardation, a market structure wherein LNG gets cheaper further out in time, is encouraging buyers to use up stored supply and defer purchases, keeping a lid on demand.


2015 January 15

New Brunswick, Nova Scotia, Maine & New England

Repsol submits plans to develop Saint John LNG export terminal — Telegraph-Journal, Saint John, NB [Paid subscription required]

Spain’s biggest energy company takes first steps to file the project with the federal Canadian Environmental Assessment Agency. [Colored & bold emphasis added.]

Repsol seeking to secure gas supply — Telegraph-Journal, Saint John, NB [Paid subscription required]

Preliminary meetings with Maritimes and Northeast Pipeline officials can be seen as another tangible step Repsol has taken toward a liquefaction plant project in Saint John. [Colored & bold emphasis added.]

Canaport LNG's tax deal won't cover export, city lawyer says (Jan 14) — CBC News

Canaport LNG's property tax deal with the City of Saint John would not cover any future export activities, the city's solicitor says in an email leaked to CBC News.

"Legislation is clear, concession is only to facility for …"receiving and containment of lng … Amendment would be required to alter terms," John Nugent states in the email Tuesday to city manager Pat Woods.

The request [for legal opinion] came on the heels of a CBC report, which suggested a wrinkle in the wording of the 2005 deal could kill the 25-year arrangement if the liquefied natural gas terminal begins to export LNG.

[S]ale gas developments in the U.S. have flooded the markets, undercutting the need for imports. As a result, Canaport is exploring the feasibility of converting the facility to bring in cheap U.S. gas by pipeline, liquefy it and then load it onto ships for export to Europe and other destinations where prices are higher. [Colored & bold emphasis added.]

Mel Norton orders staff to probe Canaport LNG tax deal (Jan 14) — CBC News

Norton broke his silence on the issue on Tuesday following a CBC investigation that revealed John Nugent, the city solicitor, has advised Saint John administrators that the property tax break given to Canaport LNG in 2005 only applies if the site is used for importing liquefied natural gas.

Norton said his office learned on Tuesday that oil handling is now being performed on the LNG site.

…[D]ocuments filed with the Energy and Utilities Board show Irving Oil Ltd. has built a crude oil pipeline from Canaport as a backup to the offshore monobuoy, which has long been used by supertankers to offload cargo.

"But we do understand that there was some change and if that change is such that the property is no longer eligible for that tax deal then council would very much want to ensure that we collect the tax that's due and owing at law." [Colored & bold emphasis added.]

Canaport LNG tax deal shouldn't apply to pipeline: Norm McFarlane — CBC News

Former Saint John mayor says 2005 property tax deal was only intended to benefit the LNG facility

An architect of the 2005 tax deal between Saint John and Canaport LNG says the agreement should not apply to any new developments at the facility.

Norm McFarlane, who negotiated the property tax deal when he was mayor of Saint John, told city taxpayers in 2005 that nothing but liquefied natural gas would ever benefit from the discount rate.

An oil pipeline built for the Irving Oil tank farm on the Canaport LNG property last year is suddenly raising a lot of questions.

Irving Oil normally uses a monobuoy to transfer oil from tankers to shore, but it malfunctioned seven years ago. That caused a backup of ships in the Bay of Fundy, leading the oil company to develop a backup unloading facility at the LNG wharf.

Partners launch joint open season for New England, Atlantic Canada gas (Jan 14) — PennEnergy

Portland Natural Gas Transmission System (PNGTS), TransCanada PipeLines Ltd. (TCPL), and Iroquois Gas Transmission System LP (IGTS) have launched simultaneous joint open seasons for transport of as much as 300,000 dth/day of natural gas from the Wright Hub in Wright, NY, to New England, New Brunswick, and Nova Scotia, at a combined, fixed transportation rate of $1.37/dth, as early as Nov. 1, 2017.

The joint collaboration leverages existing pipeline assets, reducing the amount of new infrastructure that needs to be constructed. [Colored & bold emphasis added.]

As cold sets in, the New England winter energy “crisis” fizzles (Jan 14) — Conservation Law Foundation, Boston, MA

We’re reaching the end of our first major cold snap here in New England, so let’s take stock of how New England’s electric system and market are faring. In short, we are doing much better than expected, to the great surprise of the many “experts” who have said we are in a “crisis.”

Despite months of talk about energy shortages and ever-higher prices, wholesale prices for electricity and natural gas are running well below last year, and power plants are getting the fuel they need to run, even in very cold weather. After big power plant retirements, the system is working well, and the forward prices that will set future retail electric rates are also down. Unfortunately, many customers’ bills remain extremely high thanks to poorly timed energy buys by electric utilities, but rates are already falling. The new, calmer reality we are seeing this winter should force rational policymakers to dial back the energy crisis hysteria.

Even in the coldest weather, natural gas power plants are getting the gas they need to run. While December was somewhat warmer than last year, we’ve seen some bitterly cold weather in January, and there has still been enough gas to heat our buildings and serve power plants. And we don’t have any more pipeline capacity than we did last winter. In general, it appears that ISO-NE, power plants, and pipeline companies have learned lessons from last winter about timely communication, coordination, and fuel supply, something federal energy regulators are pushing as well.

If this is what is happening in the market, why are many customers paying so much for power this winter? The answer: profoundly terrible timing and insufficiently flexible buying practices on the part of utilities. The utilities charging the highest rates this winter locked in power buys last fall, at astronomical multi-month rates that in some cases doubled the previous supply rates in customer bills. The upshot: some retail customers are paying more for each and every kilowatt-hour of energy they use through the spring than the wholesale market prices on even this winter’s coldest days.

There are silver linings for even these electric customers: customer bills will return to earth when new rates are set. This week, two utilities that avoided setting rates last fall—Central Maine Power and Bangor Emera—set their prices for this year, and their supply costs dropped almost 15%, to 6.5 cents per kilowatt-hour—less than half what many customers in other New England states are paying this winter. Competitive energy suppliers also are beginning to offer lower prices, and retail choice may allow customers to find a lower rate even sooner. Other utility customers should see substantial drops when their rates change next, and most will have lower bills in time for summer and air conditioning season.

With the winter energy crisis narrative fizzling before our eyes, and new political leadership in several state capitals, New England has an opportunity to set a different course this year. We can craft incremental, market-oriented measures that help ensure we meet our energy needs at a reasonable cost, reduce our fossil fuel use and greenhouse gas emissions, and make full use of the infrastructure we have. In a market that can turn a dime, these are smart moves, and they are already paying off this winter. [Colored & bold emphasis added.]


Jacksonville LNG terminal plan gets boost from potential neighbors (Jan 14) — The Florida Times-Union, Jacksonville, FL

The terminal west of the Broward River near Drummond Creek is largely designed to export LNG to relatively small overseas markets such as Caribbean islands. It could also fuel ships traveling between East Coast ports and provide gas to businesses trying to switch to trucks that don’t need diesel or gasoline.

British Columbia

Tanking Asia gas prices makes BC LNG 'not viable,' expert says — The Tyee, Vancouver, BC

Natural gas already sold at 'bargain basement prices,' says former Alberta royalty advisor.

Jim Roy, a former royalty advisor to the Alberta government of Peter Lougheed and now a private Edmonton-based consultant, said the profitability of any liquefied natural gas industry in the province in truth depends on artificially high natural gas prices in China.

The natural gas price in B.C. needs to be less than half the price of natural gas in China for the nearly 24 proposed LNG projects in the province to be economic, but that differential is rapidly narrowing, Roy said.

Since the advent of falling oil prices, the spot price for natural gas -- the so-called Japanese Korea Marker -- has plummeted. Global LNG prices are tied to oil prices. [Colored & bold emphasis added.]

Fort Nelson optimistic after Apache sale — Alaska Highway News, Fort St. John BC

Although no final investment decisions were made in B.C.’s anticipated liquefied natural gas (LNG) export business before the close of 2014, Apache did announce that it would be selling its 50 per cent stake in the Kitimat LNG project to the Australian LNG company Woodside Petroleum Ltd., a deal that could very well have very a significant impact Northern Rockies Regional Municipality.

Kitimat LNG was once throught to be the front runner to make a final investment decision, but the project faced a major stumbling block when Apache was forced to sell its shares by activist investors last summer

Woodside has made other moves on LNG in B.C., filing another export facility project description with regulators in August of 2014. This facility would be located at Grassy Point, north of Prince Rupert. That project's fate is unknown\

Woodfibre LNG application review initiated — LNG World News

Canada’s Environmental Assessment Office said it has initiated the 180-day application review process for the proposed Woodfibre LNG project.

Woodfibre LNG, a Pacific Oil and Gas unit, proposes a project comprising the construction and operation of a processing and liquefaction facility to produce approximately 2.1 million metric tonnes per annum of LNG, with associated storage capacity of 250,000 m3 and export infrastructure. Natural gas will be supplied to the facility from western Canadian market hubs through expansion by FortisBC of the existing gas transmission system.


Science Matters - Energy shift requires shift in conversation [Opinion column] (Jan 14) — Yorkton This Week, Yorkton, SK

Abundant, cheap fossil fuels have driven explosive technological, industrial and economic expansion for more than a century. The pervasive infrastructure developed to accommodate this growth makes it difficult to contemplate rapidly shifting away from coal, oil and gas, which creates a psychological barrier to rational discourse on energy issues.

The ecological and true economic costs of energy use force us to scrutinize our way of living. And because our infrastructure doesn’t allow us to entirely avoid fossil fuels, we must face the contradiction between how we should live and constraints against doing so.

Canada has no national energy plan, other than governmental desire to be a fossil-fuelled energy-export superpower. Given the consequences of human-induced climate change already hitting home, you’d think the highest priority of governments at all levels would be to decide on the lowest-emission energy path. But politicians focused on election intervals have difficulty dealing with generational issues.

LNG should be labelled LFG: liquefied fracked gas. Hydraulic fracturing — fracking — requires pumping millions of litres of chemical-laced water deep underground to shatter shale and liberate embedded gas. It’s a short-term way to get energy with long-term ecological impacts on water and whatever organisms might be down there. (It was once thought life disappeared at bedrock, but we now know bacteria are found at least 10 kilometres down.)

If our leaders are serious about long-term health and prosperity, they need to stop focusing on short-term profits from rapid fossil fuel development and export and start engaging in serious conversations about our energy future. [Colored & bold emphasis added.]

United States

LNG prices a concern for exporters (Jan 12) — The Maritime Executive

With so much speculation surrounding the plummeting oil price, the state of the natural gas market has largely taken a backseat. However, gas prices are falling too, but the extent and impact of this varies around the world more than in the case of oil.

Even with long-term agreements in place, it will be exporters of natural gas, particularly LNG, that are most concerned. In Japan, the highest priced consumer, LNG prices are widely expected to fall to below $13/mmbtu in 2015. In this environment the arbitrage opportunity for Middle Eastern, American or African producers evaporates.

LNG spot trade is perhaps most-exposed and significant volumes are now traded as spot cargoes – amounting to some 30 percent of the total. Furthermore, Chinese importers have stated their preference for regional production and pipelined imports where the infrastructure is in place – and the infrastructure continues to grow. It’s the LNG exporters that face the most pressure in strenuous times. [Colored & bold emphasis added.]

PIRA: LNG supply pace to slow down in 2015 — LNG World News

Competing pressure from even lower oil prices will only add to the start-up delays that have long been set in motion in Australia over labor, infrastructure costs and other issues.

GOP pushes again to ease LNG exports — UPI

Rep. Bill Johnson, R-Ohio, introduced a measure that would put a 30-day deadline on the Department of Energy to issue a permit for LNG export facilities. If passed, the bill would bring certainty to federal processes and remove bureaucratic delays, he said.

Webmaster's comment: Rep. Johnson's bill does not impact the FERC permitting timeline.

More bills to expedite U.S. LNG exports introduced — LNG Law Blog

Senator Ted Cruz (R-TX) has introduced an amendment to the Keystone XL Pipeline Act (S.1), which according to the press release, would expedite U.S. LNG exports to World Trade Organization (WTO) members. Representative Mike Turner (R-OH) has reintroduced The American Job Creation and Strategic Alliances LNG Act, which the press release states is also intended to expedite U.S. LNG exports to WTO members. Representative Bill Johnson (R-OH) has introduced H.R. 351, the LNG Permitting Certainty and Transparency Act, which according to the press release, requires the U.S. Department of Energy to issue a final decision on LNG export applications within 30 days following the conclusion of the National Environmental Policy Act review of the related LNG facilities.

API sees no point in additional regulations on methane emissions — LNG World New

“As oil and natural gas production has risen dramatically, methane emissions have fallen thanks to industry leadership and investment in new technologies,” Gerard said. “And even with that knowledge, the White House has singled out oil and natural gas for regulation, where methane emissions represent only two percent of total greenhouse gas emissions.”

Webmaster's comment: API (American Petroleum Institute) apparently does not read current news regarding fugitive methane emissions from wells, pipelines, processing plants, and natural-gas/LNG vehicles. Does API's failure to see a point in methane emissions make the public want to trust them even more?


Peru dispatches LNG cargo to Mexico — LNG World News

Peru sent a cargo of liquefied natural gas on its way to Mexico, Perupetro reveals.

Perupetro did not reveal the exact destination of the LNG carrier.


LNG buyers should be wary of getting what they want: Russell — Reuters

Asian buyers of liquefied natural gas may come to view the plunge in oil prices as a case of be careful what you wish for, as you may get it.

For several years Asian LNG consumers have been keen to see an end to the long-standing practice of linking the price of the super-chilled fuel to crude oil, most often with a sliding scale referred to as a slope.

But with Brent crude down some 60 percent since the middle of 2014, and the prospect of weak prices for many years to come, oil-linked LNG isn't looking as bad an option as it was.

While buyers now enjoy the upper hand, they should be wary of shifting the market to more of a spot and short-term contract model.


2015 January 12

New Brunswick

Canaport LNG's tax deal may be killed by possible conversion — CBC News

Canaport LNG signed a 25-year property tax deal with the City of Saint John in 2005

A wrinkle in the wording of a property tax deal for Saint John's liquefied natural gas terminal may kill the arrangement if the facility begins to export LNG, a CBC News review of the tax deal's terms show.

The facility carries the highest property tax assessment in New Brunswick at $299.4 million.

Currently, it is in the tenth year of a 25-year deal with Saint John that allows it to pay a frozen annual property tax bill of $500,000 on that assessment.

That's a 91 per cent discount on the $5.3 million in annual property taxes the plant would owe Saint John without the deal, an arrangement that does not expire until 2030.

However, the tax deal's precise wording says it applies to property "solely for receiving" LNG and there are discussions now underway to convert the facility to manufacture and export LNG instead.

…[E]normous shale gas developments in New York, Pennsylvania and other states have flooded U.S. markets with natural gas and undercut the need for imports.

That has generated an interest in reversing Canaport LNG into an export facility that would bring cheap U.S. gas into Saint John by pipeline, liquefy it at the Canaport facility and load it on ships for Europe and other destinations where prices are higher. [Colored & bold emphasis added.]

New England

FERC agrees with CLF about the ISO’s big mistake, not counting renewable energy — Conservation Law Foundation, Boston, MA

On January 2, 2015, the Federal Energy Regulatory Commission, the governmental agency that regulates the ISO, issued an Order that agrees with CLF’s position, and tells the ISO to correct its big mistake when it decides how much electricity to buy for the following year, 2019–2020.

This is an important victory for renewable energy (and for common sense).…

The problem that both CLF and NEPOOL pointed out was that when the ISO calculates an ICR that totally ignores the ISO’s own distributed generation forecast, the resulting rates cannot, by definition, be “just and reasonable” within the meaning of the Federal Power Act, because the ISO is significantly over-procuring capacity. This yields unjust rates in at least two separate ways. First, ratepayers are procuring extra capacity that they don’t need. Second, the auction clearing price is likely to be higher than it should be because the demand side of the equation is improperly exaggerated. So it is a double whammy: procuring too much of commodity and at a price that is artificially inflated.

Over the coming year, CLF will use this language to push the ISO to correct its huge mistake for its next ICR filing in November 2015, for the next auction, FCA-10, to be held in February 2016. If the ISO does not listen to CLF – and to the overwhelming majority of NEPOOL members – on this issue, there is the very real possibility that next time FERC will reject the ISO’s flawed ICR calculation. [Colored & bold emphasis added.]


Idea for gas terminal off East Coast rankles fracking foes — Epoch Times, New York, NY

Liberty Natural Gas wants to build a deep-water port in federal waters 19 miles off Jones Beach, N.Y., and 29 miles off Long Branch, N.J.

…But environmentalists, fishing groups, and some elected officials say it is a dangerous, unnecessary project, given that America is awash in large supplies of domestically produced natural gas, much of which is produced in the Marcellus Shale formation just west of New York.

British Columbia

Exxon pledges to work with First Nations on B.C. LNG terminal — The Globe and Mail, Toronto, ON

The U.S. energy company’s proposal to spend up to $25-billion to export B.C. liquefied natural gas will hinge in part on having First Nations support the West Coast Canada LNG project, or WCC LNG, planned for Tuck Inlet near the community of Prince Rupert.

WCC LNG chose Tuck Inlet over potential spots such as Grassy Point, located north of Prince Rupert, and also eliminated four sites near Kitimat.

In the race to export B.C. LNG, the key players in the Prince Rupert region are Petronas-led Pacific NorthWest LNG, WCC LNG and BG Group PLC, while Kitimat is the proposed site for a project led by Chevron Corp. and another headed by Royal Dutch Shell PLC.

Webmaster's comment: This is yet another decidedly inappropriate terminal site. It would require LNG ships to unnecessarily pass close-by to the city of Prince Rupert.

WCC LNG outlines $25 billion spending plan for Northern B.C.; construction could begin in 2017 — Pipeline News North

Exxon, the world’s largest energy company, and its Canadian subsidiary, Imperial Oil, have proposed to develop the LNG project under a venture known as WCC LNG Ltd.

On Dec. 16, 2013, WCC LNG was granted a license to export 30 million tonnes of LNG per year for a term of 25 years.

WCC LNG waded into the environmental assessment process on Jan. 7 when B.C.'s Environmental Assessment Office notified the proponent that an environmental assessment certificate was required for the proposed project to move ahead.

Canada & United States

Oil markets are bleeding red — UPI

NEW YORK, Jan. 12 (UPI) -- Dim prospects for oil prices pushed key indices into negative territory Monday, with Brent and WTI both off more than 3 percent from the previous session.

Oil prices since June have lost more than 50 percent of their value as supplies outweigh demand in a weakened global marketplace. Decisions from Saudi Arabia, the tacit leader of the Organization of Petroleum Exporting Countries, to keep its output steady despite oversupplies are helping drive the price of oil downward.

Goldman Sachs sparked further pessimism in the crude oil market by trimming its six month prediction for Brent from $70 to $43 per barrel. [Colored & bold emphasis added.]


2015 January 10


PDF filePort Ambrose Fact Sheet: A Proposed Offshore Liquefied Natural Gas Facility (Jan) — Clean Ocean Action, NJ

LNG is Expensive. The intensive energy use required to liquefy natural gas and shipping costs makes LNG up to three times more expensive than domestic natural gas.

LNG is Dirty. It results in up to 40% more greenhouse gas emissions than domestic natural gas due to a lifecycle that requires super-cooling, transporting overseas in giant tankers, and heating back to gaseous form.

WHO is Liberty LNG?
Liberty Natural Gas is a foreign energy interest – the corporation may be licensed in Delaware with an office in New York City, but it is managed by an investment group in Toronto, Canada, and entirely owned by a bank account in the Cayman Islands. There’s no way of determining who is behind the company.

BAIT AND SWITCH—Port Ambrose Will Export US Natural Gas.
Port Ambrose is currently proposed as a facility to “import” natural gas from foreign sources. However, clearly there is no need; the United States has an abundance of natural gas. The real plan is that Liberty Natural Gas will flip this facility into an EXPORT facility to ship US domestic natural gas to Europe or to the highest bidder. This will dramatically increase the hydro-fracturing (fracking) of natural gas here in the US, and increase pressure to tap new sources, such as in the Marcellus Shale in New York.

Dominion outlines LNG construction details (Jan 9) —, MD

A temporary, 20-foot-high sound wall has been installed at the south and west ends of the property. Within the next few weeks, construction will begin on the permanent, 60-foot-high sound wall. Construction of this wall is expected to take 12 months.

Gulf of Mexico

Panama Canal to attract LNG players through agreement with Port of Lake Charles (Jan 9) — LNG World News

The Panama Canal Authority said it has signed a cooperation agreement with the Port of Lake Charles in Louisiana, which aims to attract new customers from the liquefied natural gas industry.


Industry trend analysis - downside to LNG on lower oil price - FEB 2015 (Jan) — Oil and Gas Insight

We have downgraded our Canadian natural gas production forecast due to increasingly uncompetitive LNG project economics amid lower international oil prices, both of which will negatively impact the outlook for gas production. Furthermore, high operating costs, limited midstream infrastructure, and uncertain Asian demand for Canadian LNG will continue to disincentivise investment into the sector. First mover advantage and competitive costs will be crucial for new entrants in the Asian Pacific LNG market as it will grow increasingly crowded with available suppliers. [Colored & bold emphasis added.]

United States

GOP leadership pushes natural gas developments (Jan 9) — UPI

WASHINGTON, Jan. 9 (UPI) -- Republican leaders in the House of Representatives say the federal government needs to pick up the pace with reviewing permits for natural gas pipelines.

If approved, [Rep. Mike Pompeo's] measure would require the Federal Energy Regulatory Commission to approve or deny applications for new projects no later than one year after receiving an application. House leaders argue gas pipeline infrastructure additions aren't keeping pace with increasing production.

Republican leaders from the other chamber introduced a measure this week meant to improve the approval process for exporting liquefied natural gas. A bill introduced by Sen. John Hoeven, R-N.D., would require a decision of an LNG export application within 45 days of a completed environmental review.

Webmaster's comment: Rep. Pompeo wants FERC to take no longer than one year to either approve or deny an application — even if that means a thorough, complete process is thrown out the window. Brilliant!

President Obama signs bill encouraging exports of LNG on U.S.-flagged vessels (Jan 9) — LNG Law Blog

President Obama has signed into law S. 2444, the Howard Coble Coast Guard and Maritime Transportation Act of 2014, which among other things, reauthorizes funding for the U.S. Coast Guard and Federal Maritime Commission, and encourages the use of U.S.-flagged vessels for LNG exports from the United States. Section 308 of the Act requires the Comptroller General of the United States to submit a report to certain House and Senate committees on the number of jobs, including vessel construction and vessel operating jobs, that would be created each year in 2015 through 2025 if LNG exported from the United States were required to be carried on U.S.-flagged and U.S.-built vessels.

US to launch LNG exports by end of 2015 (Jan 9) — RT, Russia

The US is expected to start deliveries of liquefied natural gas at the end of the year, a move aimed at loosening European dependence on Russian energy, said Amos Hochstein, US State Department Coordinator for International Energy Affairs.

The first shipments will be delivered to India and Japan, but other markets are likely to emerge in the near future, Hochstein said during a talk at the Atlantic Council on Thursday. He believes the plans will affect the situation in the global energy markets.

However, it doesn’t mean that European countries will be able to automatically substitute half of Russian gas imports, said Grigory Vygon, director of Skolkovo business school’s energy center, according to the Novaya Gazeta newspaper. Even if the US government issues export license for each of the applicants, it cannot force the companies to deliver all their production to Europe. Businesses are likely to choose the most profitable market for themselves, and Vygon believes that in terms of prices it’s going to be the Asia-Pacific region.


2015 January 9


Liberty Natural Gas deepwater port faces tough opposition (Jan 8) —Asbury Park Press, Asbury Park, NJ

EATONTOWN – Legislators provided resistance to Port Ambrose, a proposed deepwater port off the coast here for the import of liquefied natural gas (LNG), at a public comment session before federal agencies Thursday.

The port would consist of permanent, anchored buoys where tankers called regasification vessels would dock and vaporize the gas. A proposed 21 mile underwater gas pipeline would transport the gas from the port to an existing transcontinental pipeline (TRANSCO) at a point in lower New York Bay.

The application's Environmental Impact Study is before the U.S. Coast Guard and U.S. Maritime Administration for review. The Maritime Administration has the authority to grant a license for a deepwater port.

The Deepwater Act prohibits the U.S. Maritime Administration from issuing a license without the approval of the governor of each adjacent state.

In 2011, the same company tried to built an LNG port 16 miles off the coast from Asbury Park but Gov. Chris Christie vetoed the project. He said it would present unacceptable and substantial risks to the state.

At public hearing, little support for Port Ambrose L.N.G. project — Capial New York, NY

More than 500 people showed up on a frigid night in Queens Wednesday for a public hearing on the Port Ambrose liquefied natural gas facility, and of the roughly 70 people who spoke, the vast majority demanded the project be scuttled.

"Things are going very well on Long Island," utility spokeswoman Wendy Ladd told Capital Thursday. "Our system has been doing very well during these extreme temperatures. National Grid actually broke two all time records of gas delivery today in both the entire U.S. footprint and for Long Island."

…Governor Andrew Cuomo and New Jersey governor Chris Christie will have the option to veto the project. [Colored & bold emphasis added.]

Just say no — The Wave, Rockaway, Long Island, NY

They came from New Jersey, they came from Long Island and they came from Rockaway, all united in their efforts to make sure the proposed Port Ambrose Liquefied Natural Gas Facility never begins construction.

Governor Andrew Cuomo has the power to veto the proposed LNG offshore facility, and the assembled groups are all asking him to veto the project.

Assemblyman Phil Goldfeder says the Port Ambrose LNG project is “simply unacceptable.”

At Wednesday’s hearing, Goldfeder acknowledged the Governor’s recent decision to ban hydrofracking in New York State, adding that the Governor ought to make the same decision on Port Ambrose.

Existing LNG import facilities around the country are operating well below capacity due to the lack of demand for imported gas. [Colored & bold emphasis added.]

British Columbia

WCC LNG wades into environmental assessment process — Alaska Highway News, AK

WCC LNG waded into the environmental assessment process on Jan. 7 when B.C.'s Environmental Assessment Office notified the proponent that an environmental assessment certificate was required for the proposed project to move ahead.

Minister defends regulation to stop oil flowing in LNG pipelines (Jan 6) — BC LNG Information, BC

[Note: What is meant in the headline and article is pipelines that supply LNG terminals. There are no such things as actual "LNG pipelines" since LNG would warm up in a long pipeline, regasify, expand 600 times in volume, and rupture the pipe.]

Minister of Natural Gas Development Rich Coleman has defended a new regulation which prohibits the conversion of LNG pipelines for transporting oil amid claims it could be easily reversed unless it is legislated.

The B.C. government today enforced a new regulation forbidding companies from converting natural gas infrastructure to transport oil or diluted bitumen.

The new measure, established under the Oil and Gas Activities Act, prohibits the BC Oil and Gas Commission from approving LNG pipeline conversions.

Six proposed pipelines will be subject to the regulation….

MLA wants tougher rules on B.C. pipelines earmarked for LNG projects (Jan 7) — The Globe and Mail, Toronto, ON

A proposed network of pipelines from natural gas fields in British Columbia’s northeast to liquefied natural gas export plants in the northwest will not be permitted to pump oil and diluted bitumen, the provincial government says.

The Natural Gas Development Ministry said a new regulation prohibits the B.C. Oil and Gas Commission from allowing any conversion of a natural gas pipeline supplying an LNG facility.

But the Opposition New Democrats said the regulation is not tough enough.

Stikine, B.C., New Democrat Doug Donaldson said Tuesday he wants legislation instead to guarantee oil and bitumen won’t end up in the proposed gas pipelines. He said that, in the spring, he intends to reintroduce his private member’s bill from last year in an effort to ban oil and bitumen from the pipelines.

Canada & United States

Why low oil prices are bad news for natural gas too — The Christian Science Monitor

Without a rise in oil prices, 2015 is looking like a grim year for liquefied natural gas exporters.

Much of the global LNG trade occurs in Asia, where buying and selling occurs according to long-term fixed contracts that are indexed to the price of oil. As a result, when oil prices were high, so were LNG prices. That is exactly why there has been a rush along the U.S. Gulf Coast to begin exporting cheap American natural gas to take advantage of high prices in Asia.

…Now with oil prices hovering around $50 per barrel – less than half of what they were last summer – spot cargoes for LNG have seen their prices collapse as well.

Adding to the sector’s problems is the fact that new supplies are starting to come online. A massive build out of LNG export capacity is still underway, with earlier projects now reaching completion. Just as the shale boom led to oversupply and crashing prices, LNG markets are showing early signs of a similar bust. [Colored & bold emphasis added.]


Teekay confirms Magellan Spirit LNG carrier aground off Bonny — LNG World News

Teekay confirmed its fully loaded, 165,600 cbm LNG carrier, Magellan Spirit has run aground 6 miles off Nigeria.

According to the company’s spokesperson Jonathan Anthony the vessel grounded in soft mud while under pilotage exiting the Bonny Island LNG terminal in Nigeria, reports gCaptain.

Webmaster's comment: LNG developers want you to believe that would never happen!

Global LNG-prices resume slide as weak demand weighs — Reuters

LONDON, Jan 9 (Reuters) - Asian spot liquefied natural gas (LNG) prices slipped on Friday as well stocked buyers in the region remained mostly on the sidelines.

The spot price LNG-AS for February fell to around $9.90 per million British thermal units (mmBtu), down from around $10.10 the previous week.

LNG prices have … been in slow decline over this period with projects launched in recent years expected to have been particularly hit by the fall in oil. [Colored & bold emphasis added.]

In the US, Excelerate Energy will import liquefied natural gas (LNG) into its long-dormant Northeast Gateway Deepwater Port, marking the facility's first cargo since 2010.

Webmaster's comment: Northeast Gateway and Neptune LNG, both terminals offshore from Boston, have had no LNG imports in four years, demonstrating the general lack of need for LNG imports due to burgeoning supply of domestic natural gas in the Marcellus Shale near northeast US markets.

Takeaways from Northeast Gateway's pending cargo receipt:

  1. Northeast Gateway is already constructed and available, proving that Downeast LNG is not required for supplemental LNG imports during periods of pipeline constraints (restraints that are being resolved by plans to add pipeline infrastructure from the Marcellus to the Northeast);
  2. Neptune LNG is also already in existence and can receive LNG if more capacity is required during periods of pipeline constraint — further demonstrating a lack of need to construct Downeast LNG; and
  3. The article demonstrates Downeast LNG president Dean Girdis's lack of veracity with FERC in claiming that the two offshore terminals near Boston cannot acquire cargoes in the winter; this clearly shows that Dean Girdis's "truth" is — in truth — truth of convenience.

2015 January 8


Proposed LNG facility off N.J. coast draws criticism from hundreds - again —

EATONTOWN —Hundreds of people turned up the heat Thursday night on a proposed liquefied natural gas facility off the coast of New Jersey as they voiced their objections to a project they said would jeopardize security to the area while benefiting an industry that doesn’t need to import gas to the U.S.

Some of the state’s top lawmakers from both political parties expressed their frustration at having to revisit the topic barely three years after Gov. Chris Christie vetoed a similar proposal in 2011.

Asbury Park Councilman Joe Woerner said approval of the application would bring short-term economic gain to a private corporation at the expense of a clean coastal environment.

Legislators against Port Ambrose LNG project — LNG World News

In response to the proposed construction of the terminal off of New Jersey’s coastline, Senator Christopher J. Connors, Assemblyman Brian E. Rumpf and Assemblywoman DiAnne C. Gove have called upon federal regulative authorities to reject the proposal in light of public safety as well as environmental and economic concerns that have been consistently raised.

The 9th District legislators are prime sponsors of pending legislative resolutions, SR-21 and AR-17, which urge federal and State entities to take appropriate action to prevent the construction of the proposed Port Ambrose deepwater LNG terminal.

Marcellus-Utica Midstream Conference host anticipates great turnout —, TX

“As recently as five years ago, Marcellus was a minor player in the oil and gas business,” said Hart. “Now, the Marcellus and Utica account for one-fourth of all natural gas production in the United States.”

Hart says LNG facilities such as the Dominion-owned Cove Point will be a significant market for gas after it recently received approval of all their permits. The federally approved Cove Point project in Maryland allows an outlet for liquefied natural gas exports closer to the Marcellus and Utica shale fields than any other terminal on the drawing board. Hart says what midstream operators are focusing on now is how to get the gas out and how to get the gas liquids out to a number of potential markets. [Colored & bold emphasis added.]

Webmaster's comment: Cove Point LNG is closer to the Marcellus and Utica supply of natural gas than any other proposed LNG export project. They also are a brownfield project, as opposed to greenfield proposal Downeast LNG. The Maryland export terminal would have fewer environmental impacts per BTU of export, and would have a lower cost in obtaining the natural gas for its LNG export, since transportation distance from the Marcellus is shorter.


Fracking spurred Ohio earthquakes: some not surprised (Jan) — Public News Service, Boulder, CO

COLUMBUS, Ohio - Some environmentalists and energy-industry observers say they are not surprised by a new study that connects earthquakes to hydraulic fracturing in Ohio.

Dozens of quakes occurred in March 2014 in Mahoning County, including a magnitude-3 quake felt in neighboring areas. The study from Miami University concluded that the tremors were spurred by fracking activity.

…"These injection wells, they're proving - time and time again - ill-equipped to handle the volumes and the pressures that they're asked to take in." [Colored & bold emphasis added.]

Gulf of Mexico

26 earthquakes later, fracking’s smoking gun is in Texas (Jan 7) — The Daily Beast, New York, NY

After 11 quakes in the last two days – with one registering at a 3.6 – Irving, Texas’ sudden onset tremor problem might be the fracking industry’s nightmare.

There’s a monster lurking under Texas, beneath the sand and oil and cowboy bones, and it’s getting a little restless after a 15 million year nap. Shaking things up in the city of Irving, just slightly west of Dallas, where no less than ten earthquakes yesterday and today bring the total tremors to 26 since October in that town alone. Over 100 quakes have been registered in the North Texas region since 2008, a staggering uptick from just a single one prior that year.

The Balcones Fault Zone divides the Lone Star State in half, loosely following the route of Interstate 35 and passing under Fort Worth, Waco, Austin, and San Antonio. And it’s not just a huge amount of human populations that sit on top of it. There are also thousands of fracking wells boring down in to the earth’s crust, pumping millions of gallons of water down with the direct intent of breaking apart what lay beneath.

And it’s not just Texas. Poland Township in Ohio had 77 earthquakes happen last March that researchers have definitively linked to fracking, in a paper published just days ago. And British Columbia has the oil addiction shakes, too.

“With time, as an injection activity continues, so will the seismic hazard as measured by the maximum magnitude,” the US Geological Survey’s Art McGarr was quoted as saying by NPR. [Colored & bold emphasis added.]


Walker: Ousted board members had oily ties — Juneau Empire, Juneau, AK

The three Alaska Gasline Development Corporation board members removed from the governing body this week were unseated to make way for everyday Alaskans whose careers have not been intertwined with the natural gas industry, Gov. Bill Walker told the Empire on Wednesday.

Late Tuesday evening, Walker’s office announced the removal of former state Sen. Drue Pearce, former BP Alaska executive Al Bolea and Texas-based pipeline consultant Richard Rabinow from the seven-member board, which oversees the state-owned corporation invested in the Alaska Liquefied Natural Gas project, among others.

British Columbia

DAVID SUZUKI: Energy shift requires shift in conversation — BC Local News, BC

Canada has no national energy plan, other than governmental desire to be a fossil-fuelled energy-export superpower. Given the consequences of human-induced climate change already hitting home, you’d think the highest priority of governments at all levels would be to decide on the lowest-emission energy path. But politicians focused on election intervals have difficulty dealing with generational issues.

Sustainability requires conservation and abundant energy employed with minimal ecological upset. Yet the inability to consider the need to shift quickly from fossil fuels means governments and industry look to mega-technologies like carbon capture and storage to justify inaction on reducing greenhouse gas emissions, while dismissing solar and wind as impractical, too expensive or unable to meet energy needs.

Where’s the leadership? Once lauded for policies such as the carbon tax and energy agreements with California, B.C.’s political leaders have now embraced liquefied natural gas, claiming industry expansion will create hundreds of thousands of jobs and add billions of dollars to provincial coffers – never mind that no one in power now will be held accountable for these promises because they’re several elections from being realized. [Colored & bold emphasis added.]

Fracking caused 220 earthquakes in area: OGC — Alaska Highway News, AK

Fracking caused 11 earthquakes in the Montney basin area surrounding Fort St. John and Dawson Creek between August 2013 and October 2014 that could be felt on the surface, a new B.C. Oil and Gas Commission report states.

The amount of seismic events caused by oil and gas operations that could not be felt on the surface was much higher. There were about 220 seismic events in the Montney in those circumstances.

The earthquakes ranged from 1 to 4.4 on the Mercalli scale. The Mercalli scale, which is used in place of the Richter scale, measures earthquake magnitude.

The majority of the seismic events — about 84 per cent — came as a result of regular fracking well operations. The other 16 per cent were caused by disposal wells.

But the report stated that two disposal wells created 38 seismic events. [Colored & bold emphasis added.]

Webmaster's comment: The British Columbia government reported that fracking was the cause of the earthquakes.

Oil price drop 'hurdle' to B.C. LNG, says Harvard University study — CBC News

The plummeting cost of crude oil could hinder B.C.'s developing liquefied natural gas industry, according to a new study out of Harvard University.

The cost of a barrel of crude oil has sunk from $107 to less than $50 since last summer, largely due to oversupply from the U.S., which has flooded the market with shale oil.

"With the fall of oil prices worldwide, the delivery cost of the planned LNG plants for export will be inconsistent with the level of price existing in the main two markets for export, which are the European market and the Asian market," said Prof. Leonardo Maugeri in an interview produced by Harvard staff.

"Right now the cost, the planned costs, are in a very dangerous zone, and the collapse of oil prices will tend to make those costs too high to penetrate the system of price now existing in Europe and Asia." [Colored & bold emphasis added.]

Webmaster's comment: Downeast LNG is betting on the European market. The European market is not looking kindly at Downeast LNG.

Government expects decision on Squamish LNG plant in 2015 (Jan 5) — Alaska Highway News, AK

B.C.’s deputy premier expects a decision will be made about the Woodfibre LNG plant sometime in 2015.

The deputy premier would not provide odds on the LNG plant being built in Squamish, however. “No, I wouldn’t handicap these. There’s 18 of them,” he said of the proposed plants.

More First Nations signing on in support of LNG projects in northern B.C. (Jan 7) — The Vancouver Sun, Vancouver, BC

Eight northern B.C. First Nations have now signed revenue-sharing agreements with the B.C. government or benefit agreements with the companies proposing the projects, according to a review by The Vancouver Sun.

That accounts for support from about 40 per cent of the approximately 20 First Nations affected by the LNG plants on the northwest coast or along the pipelines that originate in northeast B.C.

However, none of the global energy players such as Shell, Chevron or Petronas has made a final investment decision. And environmental assessments for some projects continue.

Two First Nations — the Nadleh Whut’en and the Nak’azdli — recently filed a challenge in B.C. Supreme Court against the B.C. government over its approval of TransCanada’s Coastal GasLink pipeline.

A pair of Gitxsan hereditary chiefs and supporters briefly blocked Highway 16 on Dec. 6 to protest the approvals of natural gas pipelines by the B.C. government.

And the Unist’ot’en, a clan that is part of the Wet’suwet’en hereditary chief system, have set up a remote camp to physically block development of oil and natural gas pipelines.

Washington & Oregon

April 2014 blast at Plymouth natural gas plant costs $69 million in repairs (Jan 6) — Tri-City Herald, Kennewick, WA

A $69 million project to repair a ruptured storage tank and other damage caused by an April explosion at a liquefied natural gas facility in Plymouth is scheduled to be completed near the end of 2015, officials said.

The explosion at Northwest Pipeline in southern Benton County sent shrapnel into the 14.6-million-gallon tank, which caused natural gas to slowly leak into the air. It also injured five employees and caused the evacuation of the rural community.

The project will fix fractures to the outer shell of the ruptured tank and several buildings damaged by the blast, said Michele Swaner, spokeswoman for Williams. Workers already have repaired most of the buildings, including a control room, compression station and mechanic shop.

Repairs to the damaged tank are expected to be finished in April and the liquefaction process could be done by November, Swaner said. Officials estimate the tank repairs will cost $40 million.

A final ruling on the cause has not yet been released. The company plans a community meeting in the late spring or early summer to update residents, Swaner said. [Colored & bold emphasis added.]

Webmaster's comment: A pressure tank, probably required for the liquefaction process, exploded, throwing large chunks of metal as far as 300 feet, puncturing one of the LNG storage tanks in two places, breaking a valve on that LNG tank, causing the tank to leak LNG and LNG vapor for over 24 hours, and damaging a railroad track outside the terminal property. Downeast LNG's 2014 Dec 24 response to Scoping Comments claims that their proposed liquefaction facilities would present no hazards to their proposed regasification facilities that would sit adjacent to each other within the terminal property. The blast at Plymouth, Washington, demonstrates otherwise, while demonstrating Downeast LNG's lack of veracity.

Oregon LNG sues Army Corps of Engineers for rights to LNG terminal site — LNG Law Blog

The Oregonian reports that LNG Development Company, LLC (Oregon LNG) has filed a lawsuit against the U.S. Army Corps of Engineers (USACE) seeking to nullify a USACE land-use easement that could conflict with Oregon LNG’s rights to the site for its proposed import and export terminal in Warrenton, Ore. USACE responded by defending its rights to the easement and seeking to dismiss the suit.

Webmaster's comment: Oregon LNG apparently failed to check out details prior to selecting its project site — just as Downeast LNG failed to discover LNG industry's own best practices indicating fatal flaws in Downeast LNG's site, and the presence of Passamaquoddy religious and cultural assets on the site.

Gullible, desperate or studiously obtuse [Opinion] (Jan 7) — MGx, Coquille, OR

In recent decades the same people and the very same organizations now promoting the Jordan Cove LNG terminal have promised the citizens of Coos County literally thousands of jobs. None of these promises were kept, unfortunately, but were always made as part of a marketing campaign associated with any one of dozens of taxpayer funded or subsidized economic development boondoggles. In every case, the local paper acting in its role as the publicity arm of the Port of Coos Bay and the Bay Area Chamber of Commerce would publish quotes from self professed authorities expounding upon what our local economy needs.

The Coos County Right to a Sustainable Energy Future Ordinance seeks to “democratize” economic development by allowing an informed electorate to determine the county’s future, rather than the same small miserable band of potentates. Passing this ordinance will throw the Jordan Cove debate into an entirely different arena.

Canada & United States

Low oil price makes any new liquefied natural gas projects uneconomical (Jan 7) — Australian Broadcasting Company

The plummeting price of oil is hurting the nascent onshore liquefied natural gas (LNG) industry, as well as wiping millions of dollars in value off the share price of companies.

West Texas intermediate crude is currently $US47.86. Brent crude is $51.10.

As the gas price stands currently any new LNG projects wouldn't be economically viable.

"I think a lot of the projects coming on stream now, they've already got a lot of capital sunk into them, so on a pure operating basis they should be able to make some money," Daniel Hynes said.

"Certainly as we get into 2015 we're expecting to see gas prices fall from the $15 to $16 per million British thermal units (Mbtu) down to around the $10 to $11 level."

As the gas price stands currently any new LNG projects wouldn't be economically viable.

"But if you're looking at a fresh project, with the very high capital costs they incur, a price of $14 or $15 is needed.…" [Colored & bold emphasis added.]

Webmaster's comment: We'll buy poor Downeast LNG president Dean Girdis's bus ticket home.

LNG another casualty of low oil prices —

The oil industry is facing rising debt from collapsing oil prices, but there could be another sector that becomes a casualty of the low oil price environment: liquefied natural gas (LNG).

The practice of indexing LNG contracts to the price of oil was something that Japan, the world’s largest consumer of LNG, had hoped to change. High oil prices were inflicting an economic toll on Japan, which had radically increased energy imports after shuttering its nuclear reactors. However, oil-indexed contracts cut both ways. Now with oil prices hovering around $50 per barrel – less than half of what they were last summer – spot cargoes for LNG have seen their prices collapse as well. Japan is in no hurry to see the industry undergo dramatic reforms.

Not only are low oil prices pushing down LNG prices, but demand in Asia for LNG is much lower than anticipated. In fact, a new Wood Mackenzie analysis says that weak demand in China, Japan, and Korea helped push LNG prices below $10 per million Btu at the end of 2014, less than half of the $20/MMBtu spot cargoes were selling for earlier in the year.

Adding to the sector’s problems is the fact that new supplies are starting to come online. A massive build out of LNG export capacity is still underway, with earlier projects now reaching completion. Just as the shale boom led to oversupply and crashing prices, LNG markets are showing early signs of a similar bust.

Webmaster's comment: Just as Downeast LNG jumped late into the LNG import goldrush, so has Downeast LNG jumped late into the LNG export goldrush. Downeast LNG, Dean Girdis, and Downeast LNG's venture-capital investors Kestrel Energy Partners, and Yorktown Energy Partners come late to every party, it seems — and still haven't figured out that doing so is a losing strategy.

WoodMac: 2014 Asian LNG demand much lower than expected (Jan 7) — LNG World News

"…[T]he big surprise was that Asian LNG demand was much lower than expected. Demand in emerging markets, like China, failed to grow to the extent anticipated and demand in the established South Korean market fell considerably.” [Colored & bold emphasis added.]

Webmaster's comment: Downeast LNG's pipe dream is going up in smoke.

PIRA foresees uncertain 2015 for LNG projects (Jan 7) — LNG World News

Terms such as “postponement”, “cancelation”, and “cost cutting” will feature prominently in the 2015 LNG market. The ability of new LNG supply to move forward on the back of higher oil prices appears to be taking an extended holiday. The upstream and downstream implications will be wide ranging. On the upstream side, PIRA sees a world where announced LNG projects will begin to make official statements that moving ahead will no longer be economical. [Colored & bold emphasis added.]

Webmaster's comment: Can you hear LNG dream bubbles bursting?

‘No white knight coming': Distressed natural gas producers hunker down amid new energy reality — Financial Post, Don Mills, ON

Canadian natural gas prices fell 36% last year, in tandem with oil prices, due to a familiar pattern of high production and tepid demand, ending the year at US$2.46 per thousand cubic feet, having spent the year consistently below the US$3 level that causes producers to break into a sweat.

“This may also be the trend in the next few months as the market continues to grapple with what is quickly materializing as a large oversupply of gas in storage in both Canada and the United States,” Martin King, vice-president, institutional research at FirstEnergy Capital Corp. said in a note to clients.

Citibank says there is “no white knight coming” for distressed natural gas producers any time soon.

Meanwhile, liquefied natural gas exports and industrial demand are unlikely to rise sufficiently quickly. While British Columbia’s natural gas development minister Rich Coleman expects the province’s fledgling LNG industry to “take flight” in 2015, analysts are casting serious doubts over the prospects.

U.S. Senators introduce LNG exports bill [Press release] (Jan 7) — LNG World News

U.S. Senator Tim Kaine has joined Senator John Barrasso and six other colleagues to introduce the LNG Permitting Certainty and Transparency Act.

The bipartisan legislation will speed up the approval process for exports of liquefied natural gas to countries that do not have free trade agreements with the United States. It specifically requires the Secretary of Energy to make a decision on any LNG export application within 45 days after the environmental review document for the project is published.

Webmaster's comment: This proposed bill would deplete US natural gas resources more rapidly, reducing US energy independence.

Fracking's methane leakage to be focus of many studies this year (Jan 7) — InsideClimate News

The early years of the shale boom came with a widely held assumption that the vast quantities of natural gas liberated through high-volume hydraulic fracturing, or fracking, would help slow climate change by displacing coal-fired power plants and speeding the transition to a clean-energy future.

But that notion was seriously challenged as scientists began studying the life cycle of natural gas. Although natural-gas power plants emit fewer greenhouse gases than coal plants, the process of extracting, processing and transporting natural gas releases unknown amounts of methane into the air.

James Crawford, a research scientist at NASA’s Langley Research Center, said scientists generally agree the natural gas boom could accelerate the transition to renewable fuels if the nation's average leak rates are kept to less than a few percent. But it's hard to find an average rate—the percentage of methane lost through leaks and other unintended releases—for the entire industry when emissions at each site vary based on factors like operator practices and state regulations, he said.

Bought and sold (Jan 7) —

Coal, Oil and Gas Companies Spent More than $721 Million to Set the Anti-Environment Agenda of the New Congress

In addition to more than $64 million in election contributions to candidates and political parties, the fossil fuel industry directly spent more than $163 million on television ads across the country, and paid almost $500 million to Washington lobbyists in the two years leading up to the November 2014 elections.


2015 January 6

Maine & New England

Maine and Vermont’s Yankee connection: Nuclear shutdown, natural gas, dry casks (Jan 1) — Bangor Daily News, Bangor, ME

After a 42-year run, the Vermont Yankee nuclear reactor stopped sending electricity into the region’s grid on Monday.

The reactor’s shutdown has implications for Maine’s electric ratepayers since it accelerates New England’s growing dependence on a single source — natural gas — for electricity, a phenomenon that has meant higher electricity prices this winter. And as attention shifts to the long decommissioning process that lies ahead at the reactor site in Vernon, Vermont, the shutdown also highlights the failure of the federal government to follow through with a permanent solution for storage of nuclear waste.

More gas-powered electricity means lower prices for consumers when the fuel is readily available and cheap, but just the opposite during the winter months when heating-related demand for gas is greater and its availability for electricity generation is more limited.

Webmaster's comment: This is all the more reason to develop more renewable energy capacity.


Public hearing on proposed liquid natural gas port set for Jan. 8 (Jan 2) — WordontheShore, Long Branch, NJ

EATONTOWN: A proposal to build a Liquefied Natural Gas (LNG) port 28 miles off the coast of Monmouth Beach will have its only public hearing next week.

The developers of the proposed Port Ambrose, which would be located in the federal waters of the New York Bight, will have a public hearing on Jan. 8 at the Eatontown Sheraton, 6 Industrial Way, Eatontown from 6-8 p.m.

During a 45-day timeframe after the public comment period has ended New York Governor Andrew Cuomo can notify MARAD of his approval or disapproval of the application or suggest license conditions to make the application consistent with state programs related to environmental protection, land and water use, and coastal zone management.

PIRA: LNG spot prices at all time lows despite cold weather (Jan 5) — LNG World News

NYC-based PIRA Energy Group reports that LNG demand growth lags new supply increases; spot prices suffer.

The last best hope for price support, colder than normal weather, has failed to emerge in a sustainable fashion in Asia, Europe or North America for a sustainable period of time, driving down spot prices to all time lows. [Colored & bold emphasis added.]

Coast Guard to host hearing on proposed Long Beach pipeline — Newsday, New York, NY

The U.S. Coast Guard and Maritime Administration will hold a public hearing in Queens Wednesday night about a proposed natural gas pipeline off the coast of Long Beach.

[Long Beach Council] members are opposed to the project and are urging Long Beach residents to sign a petition asking the governor to veto construction of the port. Residents can sign the petition in person at Wednesday's meeting or at City Hall at 1. W. Chester Ave. The petition also can be signed online at the city's website. [Colored & bold emphasis added.]

Southeast & Caribbean

Three companies sign pacts for new Florida LNG facility —

JACKSONVILLE – Jan. 6, 2015 – Pivotal LNG, Inc. (Pivotal LNG), a wholly owned subsidiary of AGL Resources Inc., and WesPac Midstream LLC (WesPac) today announced they have signed a long-term agreement with TOTE, Inc. (TOTE) to provide liquefied natural gas (LNG) to fuel TOTE’s two new state-of-the-art containerships. Pivotal LNG and WesPac are addressing the growing demand for LNG in the southeast by constructing a new natural gas liquefaction facility in Jacksonville, Fla.

“This announcement marks the beginning of long-term, sustainable relationships that support the growth of LNG as a clean alternate fuel in and around the Jacksonville area,” said Steve Cittadine, president of Pivotal LNG. “The combination of this new LNG facility in Jacksonville and our existing portfolio of LNG assets positions us well to serve the fueling needs of our current and future customers in the southeast, Puerto Rico, the US Virgin Islands and potentially the broader Caribbean market.”

TOTE’s new dual-fuel ‘Marlin-class’ containerships, the first in the world, are expected to be delivered to Jacksonville in late 2015 and early 2016 and will operate between Jacksonville and Puerto Rico. Operating these new LNG-powered containerships will result in significant emissions reductions, making them the most environmentally friendly ships in the world. Both ships, powered by dual-fuel LNG engines, greatly surpass the requirements of the U.S. Environmental Protection Agency’s clean air regulations. [Colored & bold emphasis added.]

Eagle LNG Partners Jacksonville files Draft Resource Reports — LNG Law Blog

Eagle LNG Partners Jacksonville LLC (Eagle LNG) has submitted to FERC Draft Resource Reports 1 (General Project Description) and 10 (Alternatives) for its proposed LNG production, storage, and export facility on the St. Johns River in Jacksonville, Fla.

Gulf of Mexico

FERC approves another Gulf Coast LNG project (Dec 31) —

Although doubts have been raised about the future of liquefied natural gas (LNG), the Federal Energy Regulatory Commission (FERC) has approved another LNG export project. According to Natural Gas Intelligence, FERC has given the green light to the Corpus Christi Liquefaction LLC export project and its accompanying pipeline, which is set for Texas’ coastline

The terminal, proposed by Cheniere Energy Inc., is the fifth LNG facility to receive the nod of approval from FERC. However, the Corpus Christi project still needs final funding approval by Cheniere, which is expected to come early next year.

The outlook of LNG has dimmed in recent months. Low oil prices and LNG demand has already caused one company to back out of its planned facility. Excelerate Energy announced this week that it is putting its LNG project planned for Texas on hold. [Colored & bold emphasis added.]

Webmaster's comment: The more LNG export projects receive FERC approval, the lower theprobability of Downeast LNG ever achieving permitting completion.Several other LNG export projects that are out-competing late-comers like Downeast LNG.

Uncertain global economics prompt Excelerate to shelve US LNG export plan (Jan 2) — Platts

Citing recent, dramatic changes in global economic conditions, Excelerate Liquefaction Solutions has placed a liquefied natural gas export project in Texas on hold, according to a regulatory filing.

Putting the regulatory proceeding on ice "would help to prevent the unnecessary expenditure of resources by both Excelerate and the commission during the first quarter of 2015," the company said in the filing.

The plans called for two floating liquefaction, storage and offloading units near an LNG import terminal originally proposed by Calhoun LNG, which was approved but never built. The two new, floating terminals would have a combined peak LNG production capacity of 10 million mt/year, according to the application.

But things have changed, the company told FERC, pointing to "uncertainty regarding the economics of the project" driven by "a steep decrease in the price of oil" and other global economic shifts.

Excelerate also operates the Northeast Gateway Project, an LNG import facility offshore Boston, and owns and operates LNG facilities in Argentina, Brazil, Israel and the UK.

Webmaster's comment: Northeast Gateway Deepwater Port offshore from Boston has had no LNG imports for over 4 years, plus shelving the Gulf of Mexico export project portend the doom faced by ill-sited and ill-timed Downeast LNG.

Texas expands ports, despite Panama delays (Jan 5) — The Bond Buyer, New York, NY

DALLAS - Texas will add capacity to its seaports in 2015 despite mixed signals from the energy sector and delayed expansion of the Panama Canal.

A new set of Panama Canal locks to accommodate larger ships is expected to begin service in 2016; Panama's plans are a key driver of plans to export natural gas to Asia and increase the number of containers arriving and departing from Texas ports.

The Sabine Pass LNG terminal between Texas and Louisiana is the first, scheduled to open this year. At a projected cost of $12 billion, the plant will be the largest LNG producer in the nation. Cheniere was the first in the nation to win government approval to broadly export LNG.

Heretofore, natural gas in the U.S. has priced as a regional commodity, its market limited to domestic customers served by pipelines, trucks and trains. Oil, on the other hand, is priced in a global market. The LNG process allows natural gas produced in the U.S. to find buyers overseas. However, Texas producers will compete with those in Australia who have already signed customers.

"Falling crude oil prices threaten the economic viability of U.S. LNG export projects because of tandem decline in oil-linked gas prices in destination markets, primarily in Asia," said Robert McNally, president of The Rapidan Group, an energy research firm in Bethesda, Maryland. "Moreover, sustained low oil prices would negatively impact investment in U.S. shale oil projects."

DOE issues Tolling Order on rehearing of Freeport LNG export authority (Jan 5) — LNG Law Blog

The U.S. Department of Energy (DOE) has issued a tolling order, which extends indefinitely the time by which DOE will act on Sierra Club’s request for rehearing of DOE’s prior orders authorizing LNG exports from the proposed Freeport LNG terminal on Quintana Island, Texas to nations without a free trade agreement with the United States.

Sabine Pass LNG files monthly Construction Status Report — LNG Law Blog

Sabine Pass LNG filed a report with FERC covering construction activities through November 2014 at its LNG export terminal in Cameron Parish, La. Stage 1 (liquefaction trains 1 and 2) engineering and procurement are 100% complete, and subcontract and direct hire construction work are 52.8% and 53.4% complete, respectively. Stage 1 overall project completion is 79% against the plan of 80.2%. Stage 2 (liquefaction trains 3 and 4) engineering is 92.9% complete, procurement is 72.6% complete, and subcontract and direct hire construction work are 31.2% and 13.6% complete, respectively. Overall project completion for Stage 2 is 49.8% against the plan of 50%. Sabine Pass LNG reports that project progress supports the scheduled substantial completion dates for trains 1 and 2 of February 2016 and June 2016, respectively. The substantial completion dates for trains 3 and 4 are April 2017 and August 2017, respectively.


Against the grain: Minnesota's long slog toward dealing with frac sand — InsideClimate News

As oil-and-gas producers' demand spikes for frac sand, a key ingredient used in hydraulic fracturing, there's mounting concern about the industry's air emissions. Toxic dust kicked up when the sand is produced and transported is a known trigger of lung disease.

In the last five years, the U.S. frac sand industry has jumped from a dozen or so mines and processing sites to hundreds in order to support growing demand from frackers—which use 10,000 tons of silica sand to frack a single well. Fracking is the controversial process of pumping sand, water and chemicals down a well to crack open bedrock and extract oil and gas reserves.

British Columbia

Blue skies ahead for B.C. economy, analysts predict — Business in Vancouver, Vancouver, BC

Risks to the B.C. economy include the continuing question mark hanging over the province’s efforts to establish a liquefied natural gas (LNG) industry.

Two potential LNG proponents, BG Group Canada and Petronas, have recently said they will delay final investment decisions because of questionable market conditions.

“The latest announcement [from Petronas] suggests there is a higher level of uncertainty than there was before,” Pastrick said.

[D]on’t be surprised to see more LNG investment decisions delayed in 2015, wrote Business Council of British Columbia economists Jock Finlayson and Ken Peacock in a December 29 commentary. [Colored & bold emphasis added.]


Engineer raises safety concerns over ferry operator's LNG conversion plans — Ship & Bunker

A Chief Engineer for Washington State Ferries' (WSF) has raised safety concerns over the company's plans to convert six vessels to run on Liquefied Natural Gas (LNG), local media reports.

Alex Zecha, Chief Engineer of the ferry Klahowya, said that classification society Det Norsk Veritas had a conflict of interest when it concluded that WSF's proposal was "inherently safe with risks as low as reasonably practicable," following a study into the proposed conversions.

Zecha claimed that plans to house LNG tanks on the vessels' top decks was a potential danger to passengers as the design of the vessels means they would be the first things hit in a collision.

The vessels also do not feature a refuge area for passengers to use in the event of a fire, according to Zecha, who also criticised the fact that WSF does not plan to install gas detectors in the passenger cabins. [Colored & bold emphasis added.]

Webmaster's comment: Another serious hazard is that, should an LNG tank be breached, it would leak -260°F cryogenic LNG and heavier-than-air LNG vapor, spilling down from the upper decks, presenting a fatal freeze-burn and asphyxiation hazard to passengers and crew at the level of the LNG release and on decks below.


Shareholder derivative suit closely follows utility’s indictment on Federal charges following September 2010 pipeline explosion (Apr 22) — Safety Litigation

In what has become a typical play for plaintiffs’ lawyers following investigations of high profile incidents, an investor filed suit yesterday against current and former officers and directors of a utility for breach of fiduciary duty, alleging the defendants harmed the company by creating a corporate culture that “emphasized profits over customer safety” and contributed to a pipeline explosion in September 2010 that killed 8 people, injured 58 others, and damaged or destroyed more than 100 homes.

The derivative action was filed three weeks after a federal grand jury returned a 12-count indictment against the utility alleging multiple violations of the Natural Gas Pipeline Safety Act of 1968 stemming from the pipeline explosion, and one day after the utility was arraigned on these charges. The indictment alleges that the utility knowingly and willfully violated the Pipeline Safety Act and its regulations between 2003 and 2010, including by failing to identify and evaluate threats to its transmission pipelines, violating pipeline “integrity management” practices and failing to address recordkeeping deficiencies with its natural gas pipelines despite knowledge that their records were inaccurate or incomplete.

Webmaster's comment: Developers of natural gas pipeline and LNG terminals like to tell the public that since disasters are contrary to their business interests, they'll operate safely. This incident demonstrates the flaw in such industry claims.

Canada & United States

Oil price: stocks dive as US oil falls below $50 a barrel — The Week UK

Falling oil price may be good for consumers but could 'really hurt' energy companies, experts say

Stock markets around the world fell sharply yesterday as the price of US oil dipped below the symbolic threshold of $50 a barrel.

Investors are concerned that the combination of weak demand for oil and a growing global glut will cause prices to continue their downward trend. [Colored & bold emphasis added.]

2015 may clarify US LNG exports (Jan 5) — Hellenic Shipping News, Hellas (a.k.a., Greece)

Four LNG export terminals are now being built in the contiguous US, with a contractually guaranteed combined capacity of 41.4mn t/yr, equivalent to 5.7 Bcf/d (161mn m³/d) of gas, and potential peak capacity of 51mn t/yr, equivalent to 7 Bcf/d of gas.

Construction at the Sabine Pass LNG project in Louisiana started in 2012 and the facility is expected to send out its first test cargo in late 2015, with commercial operations to begin in February 2016. Construction at Cameron LNG in Louisiana, Freeport LNG in Texas and Cove Point LNG in Maryland started in 2014, and those projects are slated to come on line from late 2017 to late 2018.

A number of other projects are scheduled to make final investment decisions (FIDs) and start construction this year, but falling oil prices could delay such projects by making US LNG exports less competitive compared with oil-indexed supplies. Last month, Excelerate Energy became the first company to suspend its US LNG export plans because of falling fall crude prices. It asked the US Federal Energy Regulatory Commission to put on hold the construction approval process for the project in Lavaca Bay, Texas, until 1 April 2015, when it would update the agency on the status.

The US has a much larger labor pool to draw from than Australia, which faced labor shortages for its LNG projects, [Sempra LNG president Octavio Simoes] said. Expansions at existing US LNG terminals will have advantages over greenfield US LNG projects because of cost savings, he added. The Cameron LNG export project is being built at the site of an existing import facility and Sempra is considering adding two more liquefaction trains, in addition to the three already being built. [Colored & bold emphasis added.]

Webmaster's comment: There will not be an unlimited number of LNG export projects permitted by the US DOE and FERC. There are several projects already far along in the permitting and construction — while ever-late Downeast LNG languishes in FERC Pre-Filing, years behind the front runners.

Survival of the fittest for US LNG projects (Jan 5) — Interfax Global Energy

The US Federal Energy Regulatory Commission (FERC) has approved Cheniere Energy’s second LNG export plant at Corpus Christi in Texas, but the fate of dozens of other projects in early regulatory stages is increasingly uncertain.

The FERC decision on the 59.5 million cubic metre per day (MMcm/d) plant brings the regulator’s approval for liquefaction capacity to 243 MMcm/d at five projects – well into the 170-340 MMcm/d range many analysts have long warned is the limit of world market demand for LNG from the United States. More than 57 MMcm/d of additional capacity could be authorised in 2015 under current regulatory schedules.

The Corpus Christi decision came on 30 December, just a week after deteriorating world LNG prices produced the first public indicator of cold feet among prospective US LNG operators. On 23 December, Excelerate asked FERC to suspend work on its application for a 39 MMcm/d floating liquefaction facility at Port Lavaca, Texas until at least 1 April – citing economics.

…[F]ollowing the decline in global LNG prices in late 2014, it is increasingly uncertain whether US LNG projects will be able to attract the long-term customer commitments and billions of dollars in financing they need, even with FERC and DOE approvals in hand.

As sagging LNG prices signal shrinking demand worldwide, US projects face what Harvard scholar Leonardo Maugeri calls “Darwinian competition” and analysts expect many projects to go little further. [Colored & bold emphasis added.]

Webmaster's comment: Expect Downeast LNG to go the way of the dinosaur.

Interior secretary criticizes fracking bans (Jan 2) — The Hill, Washington, DC

Interior Secretary Sally Jewell criticized local and state bans on hydraulic fracturing, saying they create confusion for the oil and natural gas industries.

The Obama administration is currently in the final stages of writing regulations that would, for the first time, regulate fracking on federal land by companies leasing it.

Senators introduce bill to speed natural gas exports — The Hill, Washington, DC

The bill from Sens. John Barrasso (R-Wyo.) and Martin Heinrich (D-N.M.) follows a series of unsuccessful attempts last year to set time limits on the Energy Department’s consideration of export applications.

“If the U.S. does not aggressively market LNG abroad, many of these countries may have no choice but to purchase energy from Russia or other nations that are not aligned with our own national interests.”

The Obama administration said last year it would support the measure if the clock started after FERC’s review.

Webmaster's comment: The Department of Energy and FERC have already approved sufficient natural gas export volumes to meet world demand — and possibly so much that US LNG exporters add to driving the price to unprofitable levels. Using Russia as an artificial reason to profit the hydrocarbon industry is folly and is proving to be counter-productive: Russia is able to sell natural gas via pipeline much cheaper than LNG imported from the US — and is bargaining with China to do just that, killing US prospects to sell LNG to China.


Converted LNG cars banned in China over safety concerns (Jan 4) — Want China Times, Taiwan

The Chinese government has banned conversion of gasoline vehicles into LNG (liquefied natural gas) vehicles, citing safety concerns, a decision which immediately elicited opposition, according to Guangzhou's 21st Century Business Herald.

In reply to the inquiry, the GAQIQ defended its decision, citing concern over legality, safety, capability of car-conversion service providers, and lack of certification and supervision for conversion devices.

Webmaster's comment: Civilian automobiles running on LNG is an exceptionally bad idea, since LNG is always releasing LNG vapor that must be either burned or released into the atmosphere. Parked vehicles would be contributing a powerful greenhouse gas and presenting a fire/explosion hazard. Imagine an LNG-fueled car near a barbeque grill family outing.


Global LNG Update (Dec 16) — Platts

Jan JKM averages $10.06/MMBtu, down 47% on year amid weak LNG demand

December 16, 2014 - The Platts JKMTM for January-delivery cargoes averaged $10.06/MMBtu over the November 17-December 15 assessment period, down 47% year on year, as increasing spot supply weighed on sentiment resulting in the largest year-on-year drop in prices since Platts began assessing the JKM in 2009.

Rapidly falling crude prices also weakened LNG demand. With ICE Brent futures for January delivery hovering around $60/b, LNG contracts linked to oil, as well as oil itself, were becoming more competitive. [Colored & bold emphasis added.]

Webmaster's comment: This is bad news for any LNG proposal that does not already have contracts locked in with customers — such as unfortunate Downeast LNG that is years away from completing FERC permitting and Department of Energy export approval.


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