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"For much of the state of Maine, the environment is the economy"
                                           — US Senator Susan Collins, 2012 Jun 21


News Articles
Passamaquoddy Bay & LNG

2010 June

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2010 Jun


30 June 2010

Hearings ahead for Calais liquid natural gas project — Bangor Daily News, Bangor, ME

Calais LNG is in the permit process with the Federal Energy Regulatory Commission and, in late January 2010, filed its permits with the Maine Department of Environmental Protection.

Some of the intervenors expected to provide testimony at the first hearing — scheduled for 8:30 a.m. Monday, July 19, at Calais High School — include the city of Calais, Maine State Chamber of Commerce, Save Passamaquoddy Bay, Conservation Law Foundation, Sierra Club, Downeast LNG, the National Park Service and the Roosevelt Campobello International Park Commission.

If necessary, that hearing will be continued throughout the week [befinning at 8:00 a.m.] until Friday, July 21. The entire hearing is open to the public.

BEP has set another session for 6:30 p.m. Tuesday, July 20, at Calais High School to accept testimony from the general public. A second hearing for the general public will be at 6:30 p.m. Thursday, July 22, at a site yet to be selected. [Red emphasis added.]

State holding public hearings on Liquefied Natural Gas terminal — WLBZ-TV, Bangor, ME

The Board will hold hearings starting on Monday, July 19 at 8:30 a.m. at Calais High School. The hearings will continue Tuesday at 8:00 a.m. and continue [as many days] as necessary, starting at [8:00 a.m. each morning].

There will be an evening session that's open for for public comment on Thursday, July 22nd. That session starts at 6:30 p.m. at Shead High School in Eastport. [Red emphasis added.]

US natural gas could serve as bridge fuel to renewables. — PennEnergy

The US could get a running start at curbing its greenhouse-gas emissions by shifting its energy mix more rapidly towards natural gas inthe next few years, allowing renewable energy sources like wind and solar time to gain ground. This is according to a new Massachusetts Institute of Technology (MIT) study released on June 25. Such a finding represents a big shift from just a few years ago.

Back then, natural gas prices were spiking, and proposals to buildterminals to import LNG seemed likely to make the US reliant on one more imported fossil fuel. Both of those issues cast doubt on arguments that natural gas could serve as a carbon-light "bridge fuel", substituting for coal until more renewable energy arrived. But new techniques for extracting "unconventional" natural gas locked in massive US shale formations have changed the picture, says the MIT report. [Red, yellow & bold emphasis added.]

Lawmakers celebrate new anti-LNG law (Jun 29) — The Providence Journal, Providence, RI

The legislation, which passed without Governor Carcieri’s signature Friday, increases minimum-height clearances to 30 feet under the Mount Hope and Pell bridges and would exclude large LNG tankers.

Plug pulled on gas terminal off Long Beach (Jun 25) — Newsday, New York, NY [Paid subscription required]

It was to be built on an island in the Atlantic, about 13.5 miles south of Long Beach and 19 miles east of the New Jersey shore. The liquefied natural gas terminal was to handle an average of 1.5 billion cubic feet of gas a day.

But it does not appear the terminal will be producing any gas at all.

Cheniere Marketing assigns Sabine Pass LNG terminal use agreement (Jun 28) — LNG Law Blog

Cheniere Energy, Inc. announced this morning that Cheniere Marketing, LLC has assigned its terminal use agreement at the Sabine Pass LNG terminal to Cheniere Energy Investments, LLC and also has entered into a variable capacity rights agreement with Cheniere Energy Investments.

LNG drama raises more questions than answers (Jun 27) — Jamaica Observer, Kingston, Jamaica, West Indies

Controversy swirls around the bid process and questions are being asked of all concerned parties. The minister of energy and mining James Robertson has been on a quest to extol the virtues of LNG, claiming it will save the country somewhere in the region of US$900 million. However, he was not totally forthcoming in announcing that the former chairman of the PCJ Ian Moore is a major shareholder of Caribbean LNG (Jamaica), part of the Exmar Consortium.

Pipeline safety sparks concern (Jun 28) — The Daily Astorian, Astoria, OR

Clatsop County staff have recommended complete denial of Oregon Pipeline LLC's consolidated land use application and Livingston will have until August 20 to issue his decision. The public hearing for the proposed LNG pipeline closed Friday night, but people can still submit testimony and evidence in favor of or against the project. Livingston will take it all into consideration.

Backdoor LNG plans proceed as in-state efforts fade (Jun 29) — Ventura County Star, Camarillo, CA

There’s … good news for California consumers in the forecasts of both the U.S. Energy Information Agency and several leading private natural gas consultants indicating there will be no need for LNG anytime in the foreseeable future.

And yet, there’s still some potential bad news out there for California gas customers worried about the high cost of LNG. It comes from Oregon, where a plant at Coos Bay is well along in the approval process.

Why should that concern consumers? Because each specially-built LNG tanker costs more than $1 billion and it takes at least six to keep any receiving plant supplied. The plants that first turn natural gas liquid and then turn it back to an invisible gas cost more billions. Those costs are inevitably included in the price consumers pay for whatever gas they use that stems from LNG, raising them substantially.

Californians have paid an estimated $40 billion less in gas bills over the last 30 years than they otherwise would have [for LNG-source natural gas] — and there have been none of the shortages the big utilities predicted. [Red, yellow & bold emphasis added.]

Peru LNG sends commissioning cargo to Mexico’s Costa Azul terminal (Jun 27) — Gas Matters, London, England, UK [Paid subscription required]

The commissioning cargo of Peru LNG is on its way to the Costa Azul terminal in Mexico, Spain’s Repsol said in a statement.

Webmaster’s Comments: Since the Mexican Government has ordered Energia Costa Azul to shut down, it will be interesting to see how this plays out.

Energy: Mexican appeals court sides with Sempra LNG (Jun 29) — North County Times, Escondido, CA

A Mexican appeals court said Sempra LNG can continue to run at its Baja California natural gas terminal, Sempra announced Tuesday.

A breather for Sempra Energy (Jun 29) — Yahoo Finance

Sempra LNG, a subsidiary of Sempra Energy received a breather on Mexican federal appeals court revoking the June 17 district court order. The earlier court order directed Mexican regulatory agencies to suspend authorization for the operations of Sempra LNG's liquefied natural gas terminal near Ensenada, Mexico.

Court revokes suspension of Sempra LNG terminal (Jun 29) — Yahoo Finance

Sempra's subsidiary, Sempra LNG, was required to include additional property around the terminal as a buffer zone, but the company said the layout of the terminal was sufficiently modified to eliminate the need for more property.

Sempra Energy falsely states that the order to close its Mexican LNG unit 'Energia Costa Azul' is revoked, states landowner — PR Newswire

Judge Only Granted Sempra the Right to be Heard on the Matter, Matter is Still Active

SAN DIEGO, June 30 /PRNewswire/ -- In a press release dated June 28th Sempra Energy misrepresented the terms of a court order relating to the closure of its Mexican LNG Unit, "Energia Costa Azul."

This statement is inaccurate in that the recent decision only gave Sempra the right to be heard on the matter relating to the Provisional Suspension, states Sanchez Ritchie. The "Grievance" which was filed and won by SEMPRA, only succeeded in allowing them to add a "peritaje" (certain specialist/expert analysis), regarding the "Definitive Suspension" prior to the court hearing and ruling over the revocation and cancellation of Energia Costa Azul's operating permits. [Red emphasis added.]


24 June 2010

Controversy over LNG threat panel — The Jamestown Press, Jamestown, RI

Council member Bob Bowen said that an upcoming “Congress of Councils” is intended to bring together voting quorums of Narragansett Bay-area councilors for the purpose of building a coalition against the LNG facility, adding that this gathering – which will be held in late July – will provide Jamestown with a venue in which to work together with other towns on the issue.

Creating awareness through surfing — LI Herald, Garden City, NY

Foundation hosts annual event to promote clean beaches and protest LNG

This year, the event was aimed at creating awareness about a proposed liquified natural gas island to be built 13 miles off the coast of Long Beach. According to the city’s website, in 2006, developers announced plans for a 53-acre, liquified natural gas deepwater terminal, to be created 13.5 miles off of the Long Beach shoreline. City officials and City Manager Charles Theofan are opposed to the project, and said that any benefits would be outweighed by negative environmental and safety issues.

Sempra Energy's Mexican LNG unit 'Energia Costa Azul' inappropriately removes key provision in Environmental Impact Document to continue its operations, states landowner Ramon Eugenio Sanchez Ritchie [News release] — MarketWatch, New York, NY

SAN DIEGO, June 24, 2010 /PRNewswire via COMTEX/ -- After a victorious court battle against Sempra Energy to regain ownership of his land from Sempra Energy, landowner Ramon Eugenio Sanchez Ritchie today uncovered transgressions by the company that have allowed it to operate out of regulatory compliance in accordance with Mexican law. The removal of this provision would allow the company to continue to operate its LNG plant "Energia Costa Azul" without an area set back cushion that is required by environmental and safety standards.

"The plant is at risk of not only closing but also of permanently losing all of their entitlements associated to the LNG plant, because of their questionable handling of their environmental compliance issues," states C.E. Cortes, Sanchez Ritchie spokesperson. [Red, yellow & bold emphasis added.]

President Obama, what would your mother say? — Counterpunch

Starting this year, BP is scheduled to start shipping super-cooled gas [LNG] from [Tangguh in West Papua New Guinea] to North America where it will be piped into the homes of millions in California, Oregon and other westerns states.

The American public is starting to reign in the irresponsible behavior of companies like BP that have created domestic disasters. American must also reckon with the foreign entanglements of the companies supplying the U.S. natural resources and should question the politicians who have led the United States into a series of environmental catastrophes and debacles on foreign soil.

Thomas D. Elias: LNG efforts continue as in-state needs fade away (Jun 23) — Press-Telegram, Long Beach, CA

There's further good news for California consumers in the forecasts of both the U.S. Energy Information Agency and several leading private natural gas consultants indicating there will be no need for LNG anytime in the foreseeable future.

And yet, there's still some potential bad news out there for California gas customers worried about the high cost of LNG.

[E]ach specially-built LNG tanker costs more than $1 billion and it takes at least six to keep any receiving plant supplied. The plants that first turn natural gas liquid and then turn it back to an invisible gas cost more billions. Those costs are inevitably included in the price consumers pay for whatever gas they use that stems from LNG, raising them substantially. No matter how piously companies like PG&E, Southern California Gas and San Diego Gas & Electric (SoCal Gas and SDG&E are both fully-owned by Sempra) deny that LNG will increase rates, the sheer amounts invested in LNG facilities guarantee it.

Consultant Ben Schlesinger, who has worked for Exxon Mobil, BP, Shell Oil, Tokyo Gas, Nigeria LNG and other industry giants, is one who predicts the glut of American gas coming on-line in the next several years will create an oversupply of gas not only here, but also in Europe - which imports almost all its energy.

[T]he greater the glut, the lower the price of all natural gas worldwide. If the price gets too low, there will be little incentive for building any new LNG plants. [Red, yellow & bold emphasis added.]

The alternative to the alternatives — Oil Online, Houston, TX

At current natural gas use, the IEA estimates suggest a supply that could last almost 300 years. If one only just fantasizes any future contributions from the orders-of-magnitude larger resource in the form of natural gas hydrates, it is easy to see how natural gas is almost certainly to evolve into the premier fuel of the world economy. The step-leap in natural gas will happen when it contributes substantially as a transportation fuel either directly in compressed natural gas (CNG) vehicles, promoted recently by, among others, T-Boone Pickens, or indirectly, by electrifying transportation.

Proliferation of LNG liquefaction and regasification facilities, abundance of transporting vessels and the enormous new gas reserves from shale formations (some even have suggested the hitherto outrageous possibility of the US exporting LNG to Western Europe) will propel the world gas trade into a realm never imagined before.

The shale gas story in the US, in addition to all other issues, is a spectacular display of technological deployment and the intimate connection with what confuses the public more than any other: the transition from resources to recoverable reserves. A table compiled in February by Greg Wrighstone of Texas Keystone (left), shows the evolution of the estimates of the Marcellus Shale recoverable gas. From about 1tcf only five years ago it has grown to over 500tcf and ranks as the number two contiguous accumulation of natural gas in the world behind the combined Iranian South Pars and Qatari North fields. The Haynesville Shale, only a year ago thought to contain just 30tcf but now estimated at 300tcf, is at number three. [Red, yellow & bold emphasis added.]

Natural gas: Cheap is nice, but it's not everything — NASDAQ

As we saw in the 2009 BP Statistical Review, natural gas was the big loser in 2009 . Cheaper than oil, but not cheaper than coal, natural gas currently has no edge as either an easy replacement for oil in infrastructure terms, or, as a competitor to coal in price terms for power generation. It's also a bit of problem, to say the least, that there is punk demand growth for electrical power in North America owing to our weak economy. Demand for power in the US was hit very hard in 2009 . This brings us to an irony of energy transitions that may have been a part of the painfully long transition from Wood to Coal, and also Coal to Oil: cheaper is not the holy grail of transition. The path dependency of your built environment can trump the price attractiveness of an alternate source of energy for a long time. I expect that for years to come, people will be asking in bewilderment, "Why aren't we transitioning to cheap, domestic, plentiful, natural gas?"


23 June 2010

Senate confirms FERC Nominees Moeller, LaFleur [News release] — Federal Energy Regulatory Commission (FERC), Washington, DC

The U.S. Senate has confirmed Philip Moeller and Cheryl LaFleur to the Federal Energy Regulatory Commission.

Webmaster’s Comments: These confirmations flip the FERC majority from Republicans to Democrats. Will FERC attitude change regarding needless LNG import terminal projects? Time will tell.

Gas exploration company testing in N.B. — Times & Transcript, Fredericton, NB

SWN is conducting its own search for natural gas separately from other companies and is not associated with Corridor Resources, another company which has been successful in finding natural gas, drilling wells and supplying gas into the Maritimes & Northeast Pipeline, which runs through New Brunswick. [Red emphasis added.]

Christie launches LNG probe — The Gleaner, Kingston, Jamaica, West Indies

Concerned about the possibility of bid-rigging and the use of insider information by the former Petroleum Corporation of Jamaica (PCJ) chairman, Ian Moore, the Office of the Contractor General (OCG) yesterday launched an investigation into the government's selection of a consortium, led by Belgium firm Exmar, as preferred bidder for development of a regasifcation terminal at Port Esquivel.

According to Christie, his inquiry will, among other things, probe the "potential conflict of interest" of CLNG Jamaica's participation in the consortium "taking into consideration Mr Ian Moore's former position as board chairman of the PCJ and his now-documented position as a director of the local company, Caribbean LNG (Jamaica) Ltd".

Additionally, Christie is also concerned by the fact that CLNG Jamaica's majority shareholder is registered offshore, with the parent company's beneficial owners unknown.

According to landowner Ramon Eugenio Sanchez Ritchie: SEMPRA continues to defy Mexican authorities by maintaining the Mexican LNG plant, Energia Costa Azul, operational despite federal order to shut down — Yahoo Finance

SAN DIEGO, June 23 /PRNewswire/ -- Sempra's LNG, Mexican LNG Unit, Energia Costa Azul, has retained the services of a high priced lobbyist, after having failed to demonstrate and convince Public Officials of aiding them in their illegal acts, by maintaining open their LNG Unit in Mexico, which has remained operational for 6-days despite, being in contempt of a Federal Court Order issued June 17, 2010, states Costa Azul Rancher, Ramon Eugenio Sanchez Ritchie.

"Despite Energia Costa Azul, having filed a grievance with the court, Mr. Sanchez Ritchie's Mexican legal team believes that the plant closure will occur next week because of the significant irregularities in the modification of the permits that the court found were petitioned irresponsibly by Sempra and subsequently issued by a corrupt officer of the Mexican Environmental Agency (SEMARNAT), to Sempra LNG's Energia Costa Azul. Mr. Sanchez Ritchie will be seeking all available remedies against this irresponsible officer of SEMARNAT," said C.E. Cortes. [Red & bold emphasis added.]

CERA's Gustafson: Russian response to tight gas "shale gale" is logical and united (Jun) — Oil & Gas Eurasia, Moscow, Russia

Speaking at the Russian Petroleum and Gas Congress expert discussion on "Unconventional Gas Resources in Russia and the World: Technologies and Prospects", IHS CERA Senior Director Thane Gustafson noted that the swift development of shale gas in North America has forced Russia to respond as LNG shipments are re-routed from the US to Europe. This massive arrival of gas in Europe resulted in a drastic drop in spot gas prices which in turn has encouraged European consumers to ask Gazprom to ease the conditions of its long-term gas supply contracts. [Red, yellow & bold emphasis added.]


22 June 2010

U.S. sidelined in fight for Arctic's future (Jun 21) — Discovery News

Even though the United States is one of the five Arctic nations with a big interest up north (the others are Canada, Greenland/Denmark, Russia and Norway), U.S. diplomats may be left on the sidelines. That's because Congress still hasn't ratified the 28-year-old Law of the Sea Treaty that governs how nations develop resources beyond their boundaries.

Webmaster’s Comments: The treaty (UN Convention on the Law of the Sea — UNCLOS) in the above story is the same treaty that bestows "unrevocable innocent passage" being claimed by non-treaty-member US Department of State regarding Head Harbour Passage in Canada.

Not being a treaty member, the US has no rights under the UNCLOS treaty regarding the Arctic, as explained in the above story. It should be clear to everyone that the US also has no rights under the same treaty regarding innocent passage. Simply put, it takes ratification of the treaty to have any rights under it, and since the treaty's inception in 1982 the US has repeatedly refused to do so. No ratification, no rights.

Safety Zones: Neptune Deep Water Port, Atlantic Ocean, Boston, MA (Jun 21) — Trading Markets, Jersey City, NJ

SUMMARY: The Coast Guard is establishing two temporary safety zones extending 500 meters in all directions from each of the two submerged turret loading (STL) buoys and accompanying systems that are part of GDF Suez Energy's Neptune Deepwater Port located in the Atlantic Ocean off of Boston, Massachusetts. The purpose of these temporary safety zones is to protect vessels and mariners from the potential safety hazards associated with construction of the deepwater port facilities and the large sub-surface turret buoys, and to protect the deepwater port infrastructure. All vessels, with the exception of deepwater port support vessels, are prohibited from entering into, remaining or moving within either of the safety zones.

OCG in 'surprise' audit of LNG deal — Go-Jamaica, Kingston, Jamaica, West Indies

A 'surprise' audit is presently underway at the Petroleum Corporation of Jamaica (PCJ)and the Ministry of Energy and Mining by a team from the Office of the Contractor General (OCG).

The Special Audit coincides with two (2) letters which were written today by Contractor General, Greg Christie, to Nigel Logan, the Acting Managing Director of the PCJ and Hillary Alexander, Permanent Secretary in the Ministry of Mining and Energy.

The complaint according to the OCG alluded, among other things, to allegations of impropriety and irregularity in the selection of the Exmar Consortium as the “preferred bidder”.

Sempra Energy says it will continue its operations at Energia Costa Azul despite Mexican court order telling Sempra to shut down plant (Jun 21) — Central Daily Times, State Collage, PA

SAN DIEGO, June 21 /PRNewswire/ -- Despite Sempra Energy's statements of now having knowledge of a Federal Court Order to suspend their permits, authorizations, and concession authorized to Energia Costa Azul, they have taken a stance to challenge the Mexican Government by stating, "Until such time as we are formally told that the permits have been suspended we will continue operations….We currently have a ship in port right now so it would be very difficult to shut down the plant," according to a spokeswoman for Sempra.

"Sempra continues to misrepresent itself to the public, its stakeholders, and the analysts in the marketplace," states Sanchez Ritchie whose property dispute with Sempra set off the Court Order for the closure of the Energia Costa Azul plant.

"…Sempra, has stated that they purchased the property under Mexican laws, however, they acquired the property from a deceased seller using a 2-year old extinguished Power of Attorney. Upon death, all powers of attorney are null & void, extinguished, and of no effect, yet Sempra managed to remove Mr. Sanchez Ritchie from his property utilizing the sham purchase contract. The Court judgment dated March 2010 found that Sempra's representatives not only testified once, but twice, that the deceased seller was not available to testify in the Sanchez Ritchie investigation because she was living in Nicaragua, two years after she was dead," according to the court document dated March 2010.… [Red, yellow & bold emphasis added.]

Webmaster’s Comments: This appears to be yet another example of big energy believing they own government, and can act with impunity.

Saying it lacks official court order, Sempra keeps Mexican LNG terminal open: Property dispute causes problems — iStockAnalyst

On Thursday, a Mexican court issued an order telling Sempra LNG, a subsidiary of San Diego-based Sempra Energy, to stop operations at its Costa Azul natural gas terminal until a hearing can be held Tuesday. But Sempra never received a formal copy of the order, and its attorneys were denied a formal copy when they went to the courthouse, said Kathleen Corbin Teora, a Sempra LNG spokeswoman.

[C.E. Cortes, a spokesman for Ramon Eugenio Sanchez Ritchie, a Mexican cattle rancher who owns the property immediately adjacent to the natural gas plant,] said the environmental assessment for the project calls for a safety buffer zone around the plant, which is why the court issued its order to stop operations. [Bold red emphasis added.]

Authorities issue court order to shut down Sempra Energy's Mexican LNG plant — Oil & Gas Financial Journal

Contrary to a press release statement made by Darcel L. Hulse, on Thursday, June 17, 2010, in which Hulse stated "Regardless of the final resolution of the land dispute, it will have no effect on our authority or ability to operate the LNG terminal." Mexican authorities on the same day issued a Federal Court Order to shut down the plant forthwith, as stated by Landowner Ramon Eugenio Sanchez Ritchie. [Red, yellow & bold emphasis added.]

Oversupply of gas expected on the market for next five years — Engineer Live, London, England, UK

World-wide natural gas markets have experienced an unprecedented reduction in demand over the last two years due to the economic recession. This, combined with a faster than expected expansion in unconventional gas in the US, resulted in a global oversupply which sent spot gas prices sharply lower. An analysis of worldwide supply/demand dynamics shows that markets could remain in oversupply until at least the middle of this decade.

In the US market natural gas is expected to be priced in the 6-7USD/mmbtu range for the duration of this decade. In the oversupplied LNG market these price levels may spread to European spot markets.

Shale gas confronts BP oil disaster threat — ICIS

Those for and against shale gas are lining-up to make their cases as to why the BP catastrophe will be a negative or a positive for what Daniel Yergin, chairman of IHS Cambridge Energy Research Associates, says is "the most significant energy innovation so far this century".

In the US, the big oversupply in US gas has helped to make ethane cracking a lot more advantageous.

Continued E&P is seen as crucial to fulfilling the current forecast that US total gas reserves will last a further 100 years. Before the shale-gas technology breakthroughs, reserves were only expected to last 30 years. [Red, yellow & bold emphasis added.]


21 June 2010

U.S. lawsuit looks to protect Canadian whales (Jun 20) — National Post, Dons Mills, ON

“The ongoing oil disaster in the Gulf of Mexico has shown that industrial activities in the ocean can affect not only the animals themselves, but the entire environment in which they live,” she said. “A similar catastrophe off the east coast of Georgia or Florida could make uninhabitable the only place on Earth that right whales give birth to their young. The government must consider such risks when deciding if and where to permit these types of activities.”

Community impacts of the Gulf Coast BP oil spill (Jun 9) — The Working Waterfront, Rockland, ME

The people of Maine and its Gulf should pay close attention what's happening in the Gulf of Mexico. There are many similarities. Both regions are made up of small communities that are highly dependent on fishing and tourism. Their economies and ways of life can easily be disrupted by major events that are beyond the control of their citizens. [Bold red emphasis added.]

Webmaster’s Comments: If LNG were actually needed in Maine, it should be sited in compliance with the LNG industry's own best safe practices — unlike inappropriately-sited Calais LNG and Downeast LNG. (See LNG Terminal Siting Standards Organization.)

Exmar proposed two terminal designs for Jamaican LNG project — LNG Law Blog

Platts LNG Daily [subscription required] reports that Exmar, leader of the consortium selected to construct the Jamaican LNG import facility, submitted two designs for the project. One proposal would include an LNG regasification vessel located five kilometers off Jamaica's southern coast and a pipeline to transport the gas to shore. The second design proposal is to install the LNG regasification ship along the shoreline at a location that has not been announced publicly.

2012 date set for LNG project — Jamaica Observer, Kingston, Jamaica, West Indies

[P]ublic relations spokesperson for the ministry, Don Creary, told the Observer that the Government had invited bidders to supply the product, which was taken up by a leading LNG producer, Exmar, which was joined by a group of local investors.

Companies make case for more time to ship LNG (Jun 21) — Anchorage Daily News, Anchorage, AK

ConocoPhillips and Marathon submitted an application on June 8 for a two-year extension of the export license, asking the federal government to rule within 90 days.

Unusually, the companies are not asking for permission to ship more natural gas overseas, but rather want more time to ship volumes approved for export in 2008.

Jordan Cove LNG responds to FERC's data requests — LNG Law Blog

Last Friday Jordan Cove LNG responded to FERC's request for engineering data regarding a proposed redesign of the facility's ship berth.

Sempra LNG reports Mexican court order to provisionally suspend regulatory authorizations for operation of LNG terminal in Mexico — MarketWatch, New York, NY

SAN DIEGO, CA, Jun 21, 2010 (MARKETWIRE via COMTEX) -- Officials of Sempra LNG, a subsidiary of Sempra Energy (SRE 49.47, -0.63, -1.26%) , today reported that, on June 18, they learned of a Mexican federal district court issuing an order on June 17 directing Mexican regulatory authorities to provisionally suspend authorizations for the operation of Sempra LNG's liquefied natural gas (LNG) terminal near Ensenada, Mexico, pending further legal proceedings. These legal proceedings will address an action by Ramon Eugenio Sanchez Ritchie based on his claim of possession of a land parcel adjacent to the terminal property.

Mexican authorities issue federal court order to shut down Sempra Energy's Mexican LNG plant, Energia Costa Azul, states landowner Ramon Eugenio Sanchez Ritchie — Digital Journal

SAN DIEGO, June 21 /PRNewswire/ -- Contrary to a press release statement made by Darcel L. Hulse, on Thursday, June 17, 2010, in which Hulse stated "Regardless of the final resolution of the land dispute, it will have no effect on our authority or ability to operate the LNG terminal." Mexican authorities on the same day issued a Federal Court Order to shut down the plant forthwith, as stated by Landowner Ramon Eugenio Sanchez Ritchie. [Bold red emphasis added.]

Webmaster’s Comments: There seems to be a general lack of believeability on the part of LNG industry players.

Sempra says to keep Mexico LNG terminal open — Reuters

LONDON, June 21 (Reuters) - Sempra Energy (SRE.N) will keep its Costa Azul liquefied natural gas terminal in Mexico running unless it is told to suspend operations by the government, a spokeswoman for the U.S.-based company said on Monday.

Webmaster’s Comments: The Digital Journal story preceding this one contains what apparently (Spanish literacy is required) is the order by the Mexican government to shut Sempra down.

US Coast Guard: Bigger missions, fewer dollars — International Relations and Security Network, Zurich, Switzerland

"Failure to correct the current imbalance between responsibilities and capabilities will further erode the service’s already dwindling ability to carry out its statutory missions, and deny it the ability to protect this nation against 21st century challenges," said the [Center for American Progress] report. [Bold red emphasis added.]

Lowest ship rates since 2005 boosts LNG stored in tankers: Energy Markets — Bloomberg

Liquefied natural gas traders are taking advantage of the lowest shipping rates in five years and rising prices in the U.K. to store fuel on tankers and profit from higher values in coming months.


19 June 2010

Falling demand puts LNG terminal plans up in air — The Chronicle-Herald, Halifax, NS

"[The Goldboro, Guysborough County, Nova Scotia, Maple LNG terminal project is] in a holding pattern based on very significant changes in the worldwide market conditions, and particularly in the natural gas situation in North America, and what you can sell the natural gas for. It is at quite a low level that is not attracting the LNG from other sources."

The project is fully permitted and the company has also renewed its options on the land where the terminal will be sited, said Owen in a telephone interview Friday from St. John’s, N.L.

"Now our owners are monitoring the situation very, very carefully but obviously they do not feel they are in a position to move to the next step in the project, which would be front-end engineering and design, which is quite a considerable expenditure, until we can see some level of change in the market situation which is right throughout North America, not particularly confined to Canada," said Owen.

"LNG cargoes are just not coming to North America at this time. What they can get for the gas is a relatively small amount. We will continue to track this situation and will be looking at our options over the next little while and then we will see later on in the year how things are looking," said the veteran of the oil and gas industry.

Analysts have predicted diminished demand for liquefied natural gas in North America because of the recession and the inroads made into the market by unconventional forms of gas, such as shale gas. [Red, yellow & bold emphasis added.]

Webmaster’s Comments: Maple LNG is already permitted but is not constructing, due to lack of market for LNG in North America, including New England. North America has a 100-year natural gas glut. Calais LNG and Downeast LNG are fooling themselves if they actually believe there is a need for their projects.

Apache begins drilling its first New Brunswick well — New Brunswick Business Journal, Saint John, NB

If all goes as planned this year and next, Apache will drill more wells and the most optimistic projection would see the company decide in 2013 to develop the resource for the long haul, drilling as many as 32 wells per year for up to 30 years. [Bold red emphasis added.]

Canadian gas won't impact either local LNG projects (Jun 3) — Calais Advertiser, Calais, ME

[This story is not available online —Save Passamaquoddy Bay webmaster]

"I don't see that the drilling for natural gas in Sussex will have a significant impact on us or our plans," says Dean Girdis of Downeast LNG in Robbinston.

"Exploring and drilling in Canada is great. I am glad to see this happening and don't believe it will have any impact on us," [Calais LNG's Ian Emery said].

According to Corridor Resources, a natural gas explorer [in New Brunswick], "The drilling partnership could produce up to six trillion cubic feet of natural gas, which is an enormous amount of natural gas."

Webmaster’s Comments: Dean Girdis and Ian Emery are correct — since Downeast LNG and Calais LNG have no hope of succeeding, even without the additional gas from New Brunswick. Both LNG projects are improperly sited, even according to their own industry's best safe practices (see LNG Terminal Siting Standards Organization), and there is a glut of natural gas in the US, including in the Northeast. Plus, Canada prohibits LNG ships from transiting into Passamaquoddy Bay, meaning Downeast LNG and Calais LNG have no way of receiving LNG.

LNG panel organizes for action (Jun 17) — The Jamestown Press, Jamestown, RI

The council has charged the committee with the mission of “gathering, managing and disseminating information pertaining to the planned transport of liquefied natural gas through the East Passage of Narragansett Bay to a terminal to be constructed in Mt. Hope Bay.”

U.S. needs national policy for energy [Opinion column] (Jun 17) — Independnet, Aberdeen, NJ

The first bad idea, three, actually, proposes liquefied natural gas (LNG) terminals off the Jersey coast to receive highly volatile LNG from Europe and the Middle East. It would be unloaded offshore and distributed as gas by pipelines to the mainland. The potential disasters from hurricanes, ship collisions, equipment failures, or terrorist attacks — such as the failed firebombing in Times Square — bring to mind the apocalyptic mantra, “Burn, baby, burn.”

Our past national energy plan, drafted by industry lobbyists, including Enron, to favor production over conservation, is a predictable failure.[Red, yellow & bold emphasis added.]

George P. Mitchell receives Lifetime Achievement Award from Gas Technology Institute [Press release] (Jun 17) — Nashville Business Journal, Nashville, TN

What started with Mitchell's vision and passion for unconventional development has spread to application to other gas shales throughout North America and Europe. Embracing unconventional gas opportunities has transformed the U.S. energy picture. In less than a decade, a view that the U.S. was running out of gas and would require tremendous imports of LNG has been transformed to a projected 100 years or more of projected supplies of gas, enabling a sustainable affordable energy source that provides new choices on how natural gas resources are used. Mitchell is an inspiration to all those who are building on his legacy to make the unconventional conventional.

Sempra Energy's Mexican liquid natural gas (LNG) unit, 'Energia Costa Azul' plant, facing imminent closure, states landowner Ramon Eugenio Sanchez Ritchie (Jun 17) — PR Newswire

Loss of litigation of necessary land parcel required for plant's operation places LNG facility at risk of closure by Mexican authorities

Plant closure will halt natural gas delivery to Northern Baja California, and exports to southern California, and Arizona Sempra Energy customers

SAN DIEGO, June 17 /PRNewswire/ -- After a four-year legal battle surrounding ownership of a parcel of land that acted as a "set back cushion" required to run its Energia Costa Azul LNG plant in Baja California, MX in compliance with Mexican environmental and safety regulations, Sempra Energy, a San Diego-based energy company, has suffered a major legal blow, according to Ramon Eugenio Sanchez Ritchie, after a Mexican Circuit Court ruled against the company's claim to the land; effectively rendering the facility inoperable.

Unbeknownst to Sempra investors, the land in question has been under litigation since 2006 when Sempra first began its legal battle against the landowner, Ramon Eugenio Sanchez Ritchie, a prominent rancher in Colonia Costa Azul, where Sempra's LNG plant is located, 15 minutes south of Ensenada. [Bold red emphasis added.]

Sempra LNG media statement on Mexico property issue (Jun 17) — Stockhouse

In response to a press release sent by Gateway Media Partners today on behalf of Ramon Eugenio Sanchez Ritchie, Sempra LNG, a subsidiary of Sempra Energy (NYSE: SRE), issued the following response from Darcel L. Hulse, president and chief executive officer of Sempra LNG:

"Claims made in a press release issued today alleging that a property dispute impacts the operation of our liquefied natural gas (LNG) terminal near Ensenada, Mexico, are absolutely false.

"Regardless of the final resolution of the land dispute, it will have no effect on our authority or ability to operate the LNG terminal." [Bold red emphasis added.]


16 June 2010

Sen. Scott Brown opposes Weaver's Cove project (Jun 15) — The Herald News, Fall River, MA

Brown clearly stated his opposition stems from the site and security concerns, not with energy development and job creation.

“It’s dangerous,” Brown said, “and it’s potentially attractive to terrorism.” Brown, a Republican who upset Attorney General Martha Coakley in a special election for the late Edward M. Kennedy’s seat, said he supports “LNG and stepping back on foreign oil.”

But Brown expressed concerns over the heavily populated Weaver’s Cove site and new technology he said developers would be using. He called such development “a catastrophic situation potentially.” He urged Weaver’s Cove Energy to rethink the project, while stating he’d not yet expressed that stance to them. [Bold red emphasis added.]

'Economic climate' rethink hope for $600m LNG project — The Tribune, Nassau, The Bahamas

THE proponents of a multi-million dollar liquefied natural gas (LNG) terminal and pipeline on Grand Bahama have applied to US regulators for an extension of time to complete their project, hoping the "current depressed economic climate" might prompt the Bahamian government to look more favourably on the project's potential revenue and growth possibilities.

Many had believed the prospect of Suez's Calypso project ever arriving in Freeport was dead, but the company's letter, which requested the FERC extend its approval certificate until June 30, 2012, shows there is a possibility - however remote - that it may be revived.

FERC grants extension of time request for Calypso Gas Pipeline — LNG Law Blog

FERC has granted Calypso U.S. Pipeline, LLC an extension of time to construct and make available for service a natural gas pipeline project that would be used to transport regasified LNG from a U.S./Bahamas Exclusive Economic Zone boundary to Florida.

Shale gas and EU energy security — EurActiv

The US is now self-sufficient – which has enabled it to mothball its terminals for importing liquefied natural gas (LNG, gas that is frozen to liquid form and transported by tankers). Is something similar about to happen in Europe?

The US shale gas boom happened at a time when gas prices were rising and most analysts predicted steadily growing gas demand for years ahead. The situation is very different now.

Scores of new LNG terminals are being constructed in the Gulf, Africa and elsewhere. But the US LNG market has disappeared almost overnight.


15 June 2010

Corridor and Apache partnership expands natural gas exploration (Jun 11) — The Quoddy Tides, Eastport, ME

Currently the McCully Field pumps about 35 million cubic feet of natural gas per day, but Corridor estimates that there is 67.3 trillion cubic feet of natural gas in southern New Brunswick.

IHA CERA reports that North American shale gas discoveries are estimated to be in the realm of 3,000 trillion cubic feet (Tcf), with Canada's share exceeding 500 Tcf.

Analysis-Pricing and politics to scupper US LNG export plan (Jun 16) — (Reuters) ForexYard

NEW YORK, June 15 (Reuters) - Cheniere Energy Inc made a bad bet when it opened the biggest liquefied natural gas import terminal in the United States in 2008 just as large increases in domestic gas production flooded the market.

Now, as Cheniere embarks on a plan to invest billions to export U.S. gas to Europe, the Houston-based LNG importer could be making a similar mistake in reverse.

The about face by Cheniere was prompted by massive increases in domestic gas production in recent years. This turned the United States, which was expected to be a big LNG importer, into an amply supplied gas-producing giant.

Economics aside, one of the major barriers will be political opposition to exporting U.S. resources abroad.

While the United States has about 100 years of technically recoverable gas reserves, big increases in domestic use could make it a precious commodity in future years as the world moves toward cleaner energy sources. [Red, yellow & bold emphasis added.]

JMA President unmoved by energy promises — Go-Jamaica, Kingston, Jamaica, West Indies

Yesterday, the energy minister said the government is working on a programme to introduce Liquefied Natural Gas (LNG) to Jamaica by late 2012.

However, [Jamaica Manufacturers’ Association president Omar Azan] is expressing skepticism about the programme.

Cabinet approves LNG negotiations — Go-Jamaica, Kingston, Jamaica, West Indies

Cabinet has given the go ahead for negotiations to begin with an international oil and gas shipping company for the development of a floating storage and degasification terminal in Jamaica.

BP spill to spur clean energy transition — iStockAnalyst

[W]hile the (NYSE: BP) calamity is by far the worst, there have been multiple oil- and gas-related disasters this year that have barely made headlines.

As events like this continue to add great cost — human and monetary — to the already high toll of fossil fuel dependence, we're starting to see a monumental shift in the way the nation views the energy industry.

[O]ur continued dependence on fossil fuels will jeopardize our national security. It will smother our planet. And it will continue to put our economy and our environment at risk.

We cannot delay any longer...

— Bill Gates

Given the caustic year the traditional energy establishment is having so far, I truly believe a permanent change in energy attitude has begun in earnest.


14 June 2010

Sen. Brown opposes Fall River LNG terminal (Jun 12) — New England Cable News (NECN), Newton, MA

"Of course jobs are important. I'm obviously the jobs senator looking to do just that," Sen. Brown said. "People's safety and security takes precedent over jobs."

"For far too long the city of Fall River has had to worry about whether or not a LNG terminal is going to be coming down Mount Hope Bay and causing and wreaking havoc on our city," Mayor William Flannigan said.

The Coast Guard, National Park Service and most recently a Rhode Island senate panel have all come out against the project.

Webmaster’s Comments: Maine Senator Snowe, Senator Collins, and Rep. Michaud would do well to follow Massachusetts Sen. Brown's example by protecting Maine citizens' safety and security against inappropriately sited LNG facilities in Passamaquoddy Bay. The world LNG industry terminal siting best practices indicate the proposed Fall River Weaver's Cove LNG terminal site and the proposed Downeast LNG and Calais LNG terminal sites are inappropriate. (See LNG Terminal Siting Standards Organization for more about industry LNG terminal siting best practices.)

Fall River councilors bicker over LNG legal costs (Jun 13) — The Herald News, Fall River, MA

Lund listed a string of communities in Massachusetts and Rhode Island he said would be impacted by an LNG terminal and should be helping defend the fight. He said those communities, combined, should at least equal what Fall River has paid.

Cheniere Energy, Inc. gambles on LNG export (Jun 12) — Gerson Lehrman Group

Cheniere was in the past the first U.S. visionary independent company to build a complex of LNG import terminals on the Gulf Coast in view of forecasted shortages of over 10 bcfd+ in 2010 and beyond. However, the dramatic development of U.S. unconventional natural gas has made U.S. LNG import terminals non-competitive and Cheniere has been considering since 2008 to sell their Sabine Pass LNG terminal with 4 bcfd of send-out capacity. The new move to build a large - 2bcfd - LNG liquefaction plant to sell U.S. LNG on the world market is a desperate move by the investors in Cheniere. [Red, yellow & bold emphasis added.]

Barack Obama calls for clean energy push — BBC News

"[O]ur continued dependence on fossil fuels will jeopardise our national security. It will smother our planet. And it will continue to put our economy and our environment at risk.

"We cannot delay any longer, and that is why I am asking for your help."

LNG site noise upsets residents (Jun 15) — WalesOnline, Wales, UK

When complaints were first made about the noise 14 months ago – when the supertanker Tembek carried the first LNG shipment into Milford Haven – residents were assured the noise was only temporary.

The noise is caused by the reliquefaction plant compressors on the tankers as they wait to off-load their cargo of liquefied natural gas.

But residents say the problem has been constant for more than a year and are now calling for an investigation.

“The droning, vibration, and thumping from the vessels has now been identified as low frequency noise, which can travel long distances, and not be audible near the source,” said a spokesman for the group. [Bold red emphasis added.]


10 June 2010

Senate panel urges LNG plan denial —, RI

STATE HOUSE — A Senate panel reviewing the proposal to build an LNG unloading berth in Mount Hope Bay recommended last week that the state petition the Federal Energy Regulatory Commission to deny permitting the project and seek the restoration of state authority in the siting of energy facilities.

“Rhode Island residents, officials and businesses have made it very clear that we believe this proposal is dangerous and not beneficial to our state. We should have the right to say no to a proposal that is not safe, not wanted and not necessary, but right now, basically our only regulatory option is to ask FERC to please consider our opinion. Obviously we should do that, but the task force also believes the state must have more authority to protect its citizens’ safety and welfare,” said Sen. Charles J. Levesque (D-Dist. 11, Portsmouth, Bristol). [Red emphasis added.]

Webmaster’s Comments: Unlike Maine, Rhode Island believes in protecting its citizens from hazardous, unnecessary projects.

Lawmakers tackle unfinished business — WPRI-TV, East Providence, RI

Following a chaotic session that lasted late into the night on Wednesday, lawmakers decided finishing properly was more important than finishing quickly. They decided to resume debate on Thursday.

Among the issues still unresolved Thursday afternoon:

House approves measure requiring peace officers on LNG tankers — The Jamestown Press, Jamestown, RI

The legislation, 2010-H 7608A, sponsored by Rep. Raymond E. Gallison Jr. (D-Bristol and Portsmouth), would expressly prohibit LNG shippers from using private security forces to enforce any required safety and security zones established by the U.S. Coast Guard.

“LNG tankers present a very real and very dangerous threat to Rhode Islanders, and we shouldn’t trust Hess LNG to protect us from it. This company has already shown reckless disregard for the people of our area and our safety, so it would be crazy to think Hess LNG would do whatever is necessary to protect us from the very dangers to which it is subjecting us,” Gallison said. [Bold red emphasis added.]

Cheniere taps Bechtel for liquefaction at Sabine Pass LNG — (Oil & Gas Journal) PennEnergy, Tulsa, OK

HOUSTON, June 10 -- Cheniere Energy Inc. unit Cheniere Partners LP let a contract to Bechtel Oil, Gas & Chemicals for the design and construction of liquefaction facilities at Cheniere’s 4 bcfd Sabine Pass LNG receiving terminal in Cameron Parish, La. The facilities will use ConocoPhillips’s optimized cascade liquefaction technology.

Cheniere expects LNG exports could commence as early as 2015 and plans to make a request to the US Federal Energy Regulatory Commission to begin National Environmental Protection Act prefiling by the end of June. The company says the timing of actual construction will depend on regulatory approvals and a final investment decision contingent upon satisfactory construction contracts and securing sufficient long-term customer contracts. Cheniere expects to be able to offer bidirectional services at Sabine Pass at $1.40-1.75/MMbtu.

LNG’s not-quite about-turn in the US — Financial Times, London, England, UK

Last week US company Cheniere Energy announced plans to build an LNG export terminal at Sabine Pass, on the Texas-Louisiana border. The company already operates an LNG import terminal there. It’s still early days; the company is talking to potential customers about contracts, but says it could be liquifying and exporting LNG by 2015.

“Due to the depth of the markets in South Louisiana with an abundance of supply and existing pipeline infrastructure, we can provide an additional outlet for U.S. natural gas production while offering a low cost source of supply for global buyers seeking alternatives to oil-indexed contracts,” said Charif Souki, Chairman and CEO. “The ability to buy or sell natural gas in one of the world’s most liquid natural gas markets provides industry players with a very powerful tool to manage their portfolios.”

Future LNG projects to require deposit — The Daily Astorian, Astoria, OR

Clatsop County will require a deposit from the next liquified natural gas project coming before the county.

LNG bankruptcy adds new wrinkle — Portland Tribune, Portland, OR

Most insiders, even those who aren’t entirely supportive of LNG, thought that a change in market forces and the establishment of natural gas reserves in the Rockies cut into the demand for domestic LNG terminals. Global economic forces keyed to the Great Recession didn’t help. [Red, yellow & bold emphasis added.]


9 June 2010

Shale gas a game-changer as supply shifts from west to east, producers seek oil (Jun 7) — PennEnergy, Tulsa, OK

The development of U.S. shale gas has thrown the supply and demand dynamic off balance and will keep gas prices low for the foreseeable future, experts say. It has also changed the flow of gas around the country.

Transportation spreads have changed because of shale. "Shale has certainly changed the net dynamics of the transportation spread for nonregulated businesses because of the healthy supply of natural gas surrounding the Northeast region," a gas utility analyst who asked to remain anonymous said. "The transportation spreads have declined as a result of that. Also just the fundamentals of natural gas marketing have changed due to the newly found supply."

Gas production in the United States is climbing, aided by advances in drilling technology that have enabled gas producers to tap into shale gas. Producers have known for years the location of shale gas - in areas where they were already drilling for natural gas - but only recently has technology enabled them to extract it. Because of the exploitation of shale gas, a phenomenon that has been playing out only over the last few years, the long-term domestic natural gas supply picture has jumped from what was estimated to be a 30-year supply to, now, a 100-year supply, said the analyst.

"On the supply side, you hear a lot about 100-plus years of supply. That's real," said Swift Energy Co. President Bruce Vincent. "I personally think it's well beyond that."

Landrieu welcomes changes to Sabine Pass to allow exportation of natural gas [News release] (Jun 7) — U.S. Senator Mary Landrieu, LA

Project will add natural gas liquefaction services.

"The United States is currently experiencing a natural gas revolution that will open up new markets here at home and abroad," said Sen. Landrieu. "In northwest Louisiana alone, the Haynesville Shale reserve has 251 trillion cubic feet of recoverable natural gas, almost 11 times the amount consumed by Americans last year. Accessing this growing supply of natural gas and building the means to deliver it to consumers will stabilize prices and allow the U.S. to become a major exporter of natural gas. This project by Cheniere Energy at Sabine Pass is a key piece of that puzzle. The result will be more jobs for Louisianians, a stronger economy and more secure energy future of America." [Red, yellow & bold emphasis added.]

Webmaster’s Comments: While Sen. Landrieu's statement does confirm the enormous US natural gas glut, exporting that energy hardly creates a "more secure energy future of America." In fact, exporting energy, depleting our resource, reduces US energy security.

ExxonMobil executive: Golden Pass LNG terminal on track for Q3 start-up (Jun 8) — LNG Law Blog

Senior Vice President Andrew Swiger of ExxonMobil said this week that the Golden Pass LNG import facility is on pace to begin operations in August or September of this year.

FERC determines no willful misconduct by Oregon Pipeline project developers (Jun 7) — LNG Law Blog

Last Friday FERC released its report following three administrative fact finding hearings on the conduct of the developers of the Oregon Pipeline project.

Port OKs master plan, settles battle with LNG — The Daily Astorian, Astoria, OR

The Port's attorney in the LNG case, Thane Tienson of the Portland law firm Landye Bennett Blumstein, said Oregon Department of State Lands has approved the Port's request to renew its lease of 94 acres on Warrenton's Skipanon Peninsula for 30 years, as mandated by a federal judge. The state has also agreed to let the Port off the hook for the rent on the Skipanon tract if Oregon LNG backs out of its sublease of the property.

FERC requests additional data on Jordan Cove LNG ship berth redesign — LNG Law Blog

Yesterday, FERC requested additional data regarding the planned redesign of the marine ship berth structure as part of the Jordan Cove LNG facility. The Commission staff seeks engineering data and drawings, as well as any comments on the redesign offered by the U.S. Coast Guard or local marine pilots.

On the Waterfront: Lieutenant governor has major effect on ports (Jun 7) — Contra Costa Times, Contra Costa, CA

While the official post is largely ceremonial, it comes with perks that include a seat on the three-member board governing the powerful State Lands Commission, which oversees development along California's roughly 850-mile coastline.

In recent years, the commission has flexed its muscle by rejecting offshore liquefied natural gas projects, expanded oil exploration and beach-front development.

In recent years, the commission has flexed its muscle by rejecting offshore liquefied natural gas projects, expanded oil exploration and beach-front development.

The commission effectively rejected a proposed $800-million floating LNG platform off Ventura County, and helped beat back similar plans near Malibu.

A smaller platform - known as Port Esperanza - is being proposed 15 miles off Long Beach's coast, but has yet to receive a formal hearing before the SLC board, where it may face a similar fate.

U.S. to become LNG exporter? (Jun 7) — Marine Log, New York, NY

Could the U.S. become an LNG exporter? That might seem an improbable prospect given the number of LNG import terminals that have recently come on stream and the fact that more than 20 more have been approved of which four are under construction. Another half dozen have been proposed but are awaiting approval.

However, things have changed since the not so distant past when the U.S. thirst for LNG imports looked to be unquenchable. For one thing, it seems that the U.S. has vast potential unconventional gas resources such as tight sands, coalbed methane (CBM), and gas shales. [Red, yellow & bold emphasis added.]

The US Might Begin Exporting Natural Gas (COP, MRO, LNG, CQP, APA, DVN, CHK, XTO, XOM) (Jun 8) — 24/7 Wall Street, New Rochelle, NY

The booming production of natural gas in the shale gas plays of Texas, Louisiana, and Arkansas have stalled the expected demand for LNG in the US.

Another North American LNG export terminal is currently on the drawing board about 400 miles north of Vancouver, British Columbia. The Kitimat LNG project is majority owned by a subsidiary of Apache Corp. and is expected to liquefy about 700 million cubic feet/day of western Canadian natural gas beginning in 2014.

As Cheniere noted, the LNG import business in the US has not developed as hoped, mainly due to the explosive growth in the shale gas plays. [Red, yellow & bold emphasis added.]

Pemex files suit against five U.S. firms (Jun 8) — (UPI) iStock Analyst

Jun. 8, 2010 (United Press International) -- A lawsuit filed in Houston alleges that five U.S. firms conspired to steal liquefied natural gas worth up to $300 million from Pemex of Mexico.

The lawsuit names BASF Corp., Murphy Energy Corp., Trammo Petroleum, Bio Nu Southwest Inc. and U.S. Petroleum Depot, all Texas companies, and six middlemen, accusing them of stealing the gas in a scheme that began in 2006, the San Antonio, Texas, Express News reported Tuesday.

The suit was filed two week after the former chief executive officer of Continental Fuels (OOTC:CNFU) , Tim Brink, pleaded guilty in a connected case. [Bold red emphasis added.]

Gas demand to go up 3pc annually (Jun 8) — Business Times, Kuala Lumpur, Malaysia

The U.S. is “no longer” driving demand for LNG though the U.K.’s growth in consumption of the fuel was a “surprise,” [Martin Houston, executive director for the Americas and global liquefied natural gas at BG Group Plc] said. [Red, yellow & bold emphasis added.]

U.S. state of Texas reports three natural gas explosions in two days — Xinhua News Agency, China

HOUSTON, June 9 (Xinhua) -- Three natural gas explosions were reported in the past two days in the U.S. state of Texas, leaving three killed and several others wounded, officials said.

A natural gas pipeline exploded Tuesday in remote part of the Texas Panhandle, killing two people and wounding three others.

A day earlier, another mishap in Cleburne, south of Dallas, was caused by utility workers who hit a natural gas line by accident. One worker was killed in that blast.

Another natural gas explosion on Monday injured five people in Gainesville, Texas

Webmaster’s Comments: Remember how Jim Lewis demonstrated that LNG is harmless? ...that it just rises into the atmosphere and goes away? LNG volume expands 600 times when regasifying into natural gas. Then, it becomes flammable and explosive. As tragic as they were, the three natural gas explosions in Texas are miniscule compared to the impacts resulting from LNG pool fire from an LNG ship.


5 June 2010

'History repeats itself'
Rushed permitting is bad practice

‘Exercise Caution’ [Editorial] (Jun 4) — Bangor Daily News, Bangor, ME

Though the case can be made that business is stifled by a slow or cumbersome review process, catastrophes such as the BP spill are dramatic reminders that regulation is what stands between public safety and the unimaginable.

[T]he potential harm to public health, regional economies, wildlife and the environment must be limited in direct relation to the profits earned by companies such as BP. [Bold red emphasis added.]

Webmaster’s Comments: The parallel between the "greased wheels" by government leading to the BP disaster and the "rush it through or lose authority" message given to the Maine's Board of Environmental Protection (BEP) should be obvious.

History has a painful tendency to repeat itself. Rushing LNG permitting — especially since the state has never permitted such a project — increases the opportunity for catastrophe.

Cheniere plans to export LNG from Sabine terminal (update2) (Jun 4) — Bloomberg BusinessWeek

Supplies of domestic natural gas rose to the highest level in at least 30 years in March amid increased production from shale wells, according to the Energy Department, making LNG imports less attractive and forcing LNG terminal owners to change strategy.

“The plan is a sign that major LNG importers who are looking at the market and realizing it’s not really sustainable are starting to consider the potential of exports,” said David Pursell, a managing director at the investment bank Tudor Pickering Holt & Co. LLC in Houston.

The company has already been re-exporting imported LNG cargoes at the terminal. Citigroup Energy Inc. bought an LNG cargo from Cheniere at Sabine Pass in February for re-export to Spain, according to the Energy Department. [Red, yellow & bold emphasis added.]


4 June 2010

RI panel comes out against proposed LNG facility — (AP) WBZ-TV, Boston, MA

The task force on Friday said the state should urge federal regulators to deny a permit for the project. The panel said the state should have authority in deciding whether to locate energy facilities, and that no private security forces should be relied upon to protect LNG supertankers as they travel Narragansett Bay.

R.I. Senate panel opposes LNG terminal in Mount Hope Bay (Jun 5) — The Providence Journal, Providence, RI

“Rhode Island residents, officials and businesses have made it very clear that we believe this proposal is dangerous and not beneficial to our state. We should have the right to say no to a proposal that is not safe, not wanted and not necessary, but right now, basically our only regulatory option is to ask [the] FERC to please consider our opinion. Obviously we should do that, but the task force also believes the state must have more authority to protect its citizens’ safety and welfare,” Levesque said in a statement.

Webmaster’s Comments: The world LNG industry's own terminal siting best safe practices also indicate the Hess Energy Weaver's Cove proposed Mount Hope Bay location is unsafe. (See LNG Terminal Siting Standards Organization.)

Canadian Superior Energy updates 2010 operational plans, activities and results (Jun 3) — Market Watch

The Liberty LNG regassification project is on budget and moving forward with submission of a construction permit planned for late August of this year. The Company continues to pursue possible joint ventures related to this project.

Webmaster’s Comments: Don't bet your bottom dollar on this company or project; it filed for bakruptcy protection in March (see Reuters news story), and has a patchy history. Canadian Superior Energy Inc. has also just changed its name to Sonde Resources Corp. (See the two Canadian Superior stories, below).

Canadian Superior Energy changes name — Calgary Herald

CALGARY - Canadian Superior Energy Inc. is seeking a fresh start from its troubled past, changing its name to Sonde Resources Corp.

Canadian Superior name change to Sonde Resources approved by shareholders (Jun 3) — (The Canadian Press) The News, New Glasgow, NS

Canadian Superior’s break with the past follows a messy showdown with a major shareholder, a quarrel with a joint-venture partner over a natural gas field off Trinidad and Tobago and a change of management and board of directors.

The Calgary-based company (TSX:SNG) also filed for court protection from creditors in March 2009, emerging from the restructuring process in September.

A proposed class action lawsuit was filed last month against Canadian Superior Energy, Inc., Challenger Energy Corp. and certain current and former executive and directors.

Update 2-Cheniere plans liquefaction plant at Sabine Pass — Reuters

Potential for 4 LNG production trains at Sabine

NEW YORK, June 4 (Reuters) - Cheniere Energy (LNG.A) plans to export U.S. natural gas overseas from its Sabine Pass terminal in Louisiana in a strategy shift prompted by large increases in U.S. natural gas production.

"We believe current market fundamentals have created an opportunity for the U.S. to offer natural gas to global markets at competitive prices," said Cheniere chief executive, Charif Souki. [Red, yellow & bold emphasis added.]

Webmaster’s Comments: Anyone who can read should now get the message — Calais LNG and Downeast LNG are unneeded, lost causes.

Cheniere Plans Natural-Gas Export Plant at Sabine Pass Terminal — (Bloomberg News) San Francisco Chronicle, San Francisco, CA

June 4 (Bloomberg) -- Cheniere Energy Inc. said it may build the first plant in the lower 48 U.S. states to export liquefied natural gas, starting as early as 2015.

The project would add capacity at its Sabine Pass import terminal to liquefy and export gas. The first phase would include two liquefaction trains with capacity of approximately 1 billion cubic feet a day, the company said in a statement late yesterday. The terminal can accommodate up to four trains, the company said. [Red, yellow & bold emphasis added.]

Cheniere Energy shares surge on plan to allow exports of US LNG — The Wall Street Journal, New York, NY [Paid subscription required]

Shares of Cheniere Energy Inc. (LNG) shot up 16% Friday, after the company said it was launching a project that would allow it to export U.S. natural gas in liquid form, amid a boom in domestic, onshore gas production over the past few years. [Red, yellow & bold emphasis added.]


3 June 2010

Canadian regional tourism group offers comments opposing Calais LNG proposal — LNG Law Blog

The Charlotte Coastal Region Tourism Association has submitted comments to FERC opposing the proposed Calais LNG project. The group cites potential impacts on the local tourism industry, including the increased industrialization of the region, as well as potential environmental effects of the project as its reasons for opposing the proposal. [Red, yellow & bold emphasis added.]

MOL delivery of the Shuttle and Regasification Vessel “GDF SUEZ CAPE ANN” — PRLog

GDF SUEZ CAPE ANN is the second of two SRVs that were constructed to provide LNG transportation services to the Neptune LNG Deep Water Port off the coast of Gloucester, Massachusetts, USA, which was commissioned in early 2010, as well as to other GDF SUEZ projects around the world.

Second shuttle and regasification vessel delivered — Motorship, Fareham, Hampshire, England, UK

They are fitted with three regasification skids for a total output capacity of approximately 21 million standard cubic meters of natural gas per day, and are also fully capable of operating as standard LNG carriers.

Assembly Digest — The Providence Journal, Providence, RI

Looking to block a proposed LNG terminal project in Fall River, the House voted 47 to 15 on Wednesday to adopt a minimum clearance for large ships carrying hazardous materials under the state’s bridges.

U.S. company seeks extension due to LNG approval delays — The Bahama Journal, Nassau, Bahamas

Calypso LNG was reviewed by the U.S. Coast Guard under the Deepwater Port Act, or DWP Act. It received a final environmental impact statement in July 2008.

Normally the project review would then go to Florida, which would decide whether or not to support the project, and then to the U.S. Maritime Administration, which would issue a DWP Act licence. However, in February 2009, GDF SUEZ withdrew the Calypso LNG DWP application due to uncertainties in the approval process.

The U.S. portion of the CUSP pipeline from The Bahamas was granted a certificate by FERC, but the Bahamas LNG port has not received a permit.

Donlin Creek mine eyes Cook Inlet gas for its energy supply (Jun 2) — Homer News, Homer, AK

Oil and gas companies say there is potential for new discoveries in Southcentral Alaska but that a lack of customers, other than local utilities and a liquefied natural gas plant near Kenai, is an obstacle impeding investment in new exploration.

LNG ships idling as year-end gas seen rising by 19% (Jun 4) — Gulf Times, Doha, Qatar

A global natural-gas glut is developing because of weaker- than-expected demand and plentiful “unconventional” supply in the US, International Energy Agency Executive Director Nobuo Tanaka said in a presentation in January. Unconventional gas sources include supply trapped in shale rock.

Natural gas stocks in the US are at the highest levels for this time of year in at least a decade, according to Energy Department data. [Red, yellow & bold emphasis added.]


2 June 2010

Governor race, LNG [Letter to the editor] — Bangor Daily News, Bangor, ME

To all those running for governor of Maine: My vote is lost to you if you support LNG in Passamaquoddy Bay. I hope all Mainers are very cautious, because these large LNG corporations will be much like BP in the Gulf of Mexico. They are for-profit at our and nature’s expense.

If southern New England needs the gas, then let them have more LNG terminals in their ports. I’d like to see that allowed by the people there. It never will happen. We do not need a Goldman Sachs LNG destroying Down East. Corporate gas greed prevails, thanks to our senators’ and governor’s support.

Weaver's Cove LNG seeks more time address FERC's data requests — LNG Law Blog

Yesterday, Weaver's Cove LNG requested additional time to respond to a number of FERC's data requests regarding the company's proposed pipe-in-pipe LNG transfer system.

Webmaster’s Comments: Weaver's Cove LNG's sub-sea cryogenic LNG pipeline proposal is one of those Darwin Award-winning ideas. You know — a "less than stellar" behavior that eliminates the perpetrator from the gene pool.

Natural gas should be key in energy planning (Jun 1) — San Antonio Express-News, San Antonio, TX

Five years ago, the U.S. government believed 140 trillion cubic feet of natural gas existed in North America. This year, a private industry estimate pegs the supply at more than 1,000 trillion cubic feet.

Enough natural gas can be found domestically that the United States has little need now for liquefied natural gas terminals to receive foreign natural gas. LNG supplies will go to other markets, such as China. The world has enough shale gas that natural gas cartels are unlikely to form. Even Europe has enough shale gas to wean itself off Russian supplies.

Unconventional gas: Producer pickle or consumer curse? (Jun) — International Relations and Security Network (ISN), Zurich, Switzerland

Gas producers have a problem. Demand is down and supply is up, largely thanks to breakthroughs in unconventional production across America. [Red, yellow & bold emphasis added.]

Research and Markets: Tough road ahead for the global LNG industry - Supply glut leading to a grim short term outlook — Business Wire

Struggling from excess of LNG supplies and low prices, the industry is expected witness a challenging phase. With additional new LNG liquefaction facilities coming on-stream, the short term outlook for LNG industry continues to look grim. [Red, yellow & bold emphasis added.]


1 Jun 2010

The right coast (Jun) — Oilweek, Calgary, AB

That jackup rig is now being used to help transform four Deep Panuke exploration wells into production wells, all of which will help Encana meet its contractual obligations with Spain-based Repsol-Exploracion, which has agreed to take 300 million cubic feet per day of Panuke gas for as long as supply is available.

"Our target is to get 20 per cent of the northeast [U.S. natural gas] market," says Repsol spokesman Kristian Rix. [Red, yellow & bold emphasis added.]

Webmaster’s Comments: Existing natural gas pipelines and LNG import infrastructure already can satisfy 160% of the Northeastern US natural gas market. Repsol's goal for Deep Panuke to obtain 20% of the market — with 30 additional natural gas pipeline projects and expansions in progress — would further erode the Northeastern market for imported LNG. US LNG import terminals are investment money pits.

George P. Mitchell presented with Lifetime Achievement Award (May 26) — Gas Technology Institute

What started with Mitchell’s vision and passion for unconventional development has spread to application to other gas shales throughout North America. Embracing unconventional gas opportunities has transformed the U.S. energy picture. In less than a decade, a view that the U.S. was running out of gas and would require tremendous imports of LNG has been transformed to a projected 100 years or more of projected supplies of gas, enabling a sustainable affordable energy source that provides new choices on how natural gas resources are used. Mitchell is an inspiration to all those who are building on his legacy to make the unconventional conventional. [Red, yellow & bold emphasis added.]

What? Government worry?
Or, why the public should not trust the federal government to protect Maine waters

BP cited ‘well control situation’ six weeks before blowout (May 31) — Bloomberg

BP Plc told regulators six weeks before its well in the Gulf of Mexico exploded that workers were having trouble maintaining control, according to e-mails released yesterday by the House Energy and Commerce Committee investigating the spill.

Federal regulators gave BP permission to cement the well at a shallower depth than normally would have been required after the hole caved in on drilling equipment, the e-mails showed.

Webmaster’s Comments: This is convincing evidence that the US Federal Government cannot be relied upon to protect Maine waters from potential Calais LNG and Downeast LNG disasters — especially since THE US COAST GUARD HAS ALREADY DEFIED WORLD LNG INDUSTRY BEST SAFE PRACTICES IN PASSAMAQUODDY BAY.

Best practices indicate Passamaquoddy Bay is unsafe for LNG terminal siting and transits. (See LNG Terminal Site Selection Organization.)

The world LNG industry warns, "DON'T DO IT."

The US Coast Guard says, "Go ahead and do it, anyway."

Safety aside, the US Coast Guard does require Downeast LNG to obtain Canada's cooperation for secure LNG transits — a requirement Downeast LNG cannot meet. (See the US Coast Guard Captain of the Port's Waterway Suitability Report and Letter of Recommendation for the Downeast LNG proposal.)


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