"For much of the state of Maine, the environment is the economy"
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|2003 2004 ||
Shale gas inverts US LNG market
Repeated failure demonstrates project never should have happened
Calais LNG Dinosaur Loses Financing
Calais LNG's Partner : Goldman Sachs
30 July 2010
In the Calais LNG project, Goldman Sachs sees an opportunity to invest in a project that will supply much-needed, cost-effective, cleaner natural gas to areas including Maine, New Hampshire, and Boston where there is growing demand for natural gas and a shortage of supply.
Webmaster’s Comments: The problem, of course, is that Goldman Sachs no longer sees an opportunity in Calais LNG. Goldman Sachs has deserted the project, as was announced to the Maine Board of Environmental Protection on July 20.
The GS departure may be because reality has set in:
- There is a vast ocean of cheap natural gas available in the US;
- LNG is not a cost-effective way to deliver natural gas compared to delivering domestic supplies;
- US LNG import terminals are operating on average at only around 10% of capacity. Even if demand doubled, there would still be a vast overbuild of LNG import infrastructure.
- In addition to the 10 operating LNG import terminals in the US, there are an additional 13 projects already permitted, but are not constructing due to lack of market;
- The Sabine Pass LNG import terminal has applied to liquefy domestic natural gas and export LNG, since it cannot find a domestic market for imported LNG;
- If there were a shortage of natural gas supply in the Northeast, it is already due to end. There are now over 30 new naturtal gas pipeline and pipeline expansion projects to bring supplies to the Northeast, eliminating the price premium paid in Maine, evening-out supply and pricing accross the US.
Webmaster’s Comments: Is Downeast LNG's venture-capital funding source Yorktown Partners paying attention?
Why is natural gas now being pushed to top-tier energy prominence? In a word -- 'supply.' Five or so years ago, pundits were predicting a natural gas crisis. Natural gas was declining according to just about every measurable metric. Since then, technology has created a natural gas renaissance, enabling us to unlock vast resources from reserves previously perceived as uneconomic.
Losers will be few, but will include much of the world's LNG market that expected to land shipments at U.S. regasification facilities when prices were much higher. Renewable energy, on one hand, will be challenged by a low-cost natural gas regime, but on the other hand, renewable energy may be supported, given the role gas plays in smoothing out the intermittency issues of both wind and solar. Lastly, competing fossil fuel sources will certainly be incrementally displaced.
Webmaster’s Comments: Are Downeast LNG and Yorktown Partners (via Kestrel Energy Partners) paying attention?
The proposal to build a man-made island that would host Liquefied Natural Gas tankers and holding tanks only 15 miles off the Rockaway shoreline is officially dead in the water, at least for the foreseeable future, due largely to the current economic climate and the recent oil spill in the Gulf of Mexico.
At least some of the insanity is over. Late last week, the U.S. Coast Guard and the Department of Transportation's Maritime Administration formally acknowledged Atlantic Sea Island Group (ASIG)'s withdrawal of their permit application to construct "Safe Harbor Energy," a massive man-made island in the Atlantic Ocean to import foreign liquefied natural gas (LNG).
Ideally, [Clean Ocean Action executive director Cindy Zipf] would like to see the the area known as the New York/New Jersey Bight designated as a Clean Ocean Zone (COZ) and permanently protected from dump sites and habitat destruction. Launched in 2004, the Clean Ocean Zone campaign seeks federal regulations to safeguard the area that stretches from Montauk Point in New York to Cape May to the south then extends offshore to the outer edge of the Continental Shelf. [Bold red emphasis added.]
29 July 2010
From our perspective, this just confirms that the smart folks at Goldman Sachs finally sat down after spending more than $24 million to take a hard look at the project and reached the same conclusion that we did long ago: the New England market is already saturated with natural gas and there is no need for a new industrial LNG terminal that will have significant adverse impacts on the environment and existing uses of Passamaquoddy Bay.
Calais LNG has promised to withdraw all of its applications for environmental approval if the company can’t find someone else willing to pay for the small army of lawyers and consultants by August 11, 2010. Were the Calais LNG project to fade away, it would be the third LNG project in five years to withdraw its applications, joining Quoddy LNG and Downeast LNG. And while there appears to be an obvious trend, namely failed projects and wasted time and money, Downeast LNG is still considering refiling with the BEP this summer. If that is the case, we can only hope that the Board and State will have learned from past mistakes and not allow themselves to be bullied into unrealistically aggressive schedules for these complicated projects that will change the face and uses of Passamaquoddy Bay for generations to come. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Quoddy Bay LNG withdrew its state permit applications only after being cast out of FERC's federal permitting process.
OSLO July 29 (Reuters) - Norwegian oil and gas producer Statoil wrote down the value of its U.S. LNG import facility in Cove Point, Maryland, because shale gas discoveries in the United States limited the need for liquefied natural gas.
"There are large new volumes of U.S. gas, which significantly reduce the need for LNG," Statoil's Chief Executive Helge Lund told a news conference after the company reported second-quarter results on Thursday.
Webmaster’s Comments: Calais LNG is currently dying and if Downeast LNG isn't, it soon will be. Goldman Sachs and Statoil have brought industry and banking attention to realities of the natural gas market. The US is drowning in natural gas. There is no need for additional LNG import facilities.
[R]ather than import LNG, the US may very well become an international exporter of natural gas. Currently, Cheniere Energy is working to transform its Sabine Pass LNG receiving terminal with two liquefaction trains each capable of processing 1 billion cubic feet per day of natural gas. The company may add another two trains in the future.
Webmaster’s Comments: In plain English, Cheniere Energy is transforming its Sabine Pass LNG import terminal into a liquefaction terminal to ship US domestic gas to overseas markets.
Yesterday FERC approved a number of minor modifications to the design for the Pier Reinforcement Project underway at the Cove Point LNG terminal. FERC's approval letter notes that the "modifications are necessary to adjust for shoreline sand shifts that occurred since the design phase."
Strong Growth in Natural Gas Demand Forces Mexico to Invest in Construction of Three New LNG Regasification Terminals
Mexico is considering the construction of three new LNG regasification terminals in addition to the existing Energia Costa Azul LNG and Altamira LNG terminals. The country witnessed a strong surge in gas demand in the recent past. This growth in gas demand is mainly fuelled by the increasing number of gas-fired power plants in Mexico. Between 2010 and 2020, the natural gas demand in Mexico is expected to increase at an AAGR of 4.2% while production will decline at a negative AAGR of 0.1%. [Bold emphasis added.]
28 July 2010
"Though natural gas is a critical piece of our state's energy strategy, I remain unconvinced of the need and efficacy of these facilities or their ability to lower prices for consumers," New Jersey Governor Chris Christie said in April. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Even New York and New Jersey indicate they do not need additional LNG import projects, even offshore. The US is drowning in domestic natural gas.
An attorney for Safe Harbor LNG developer Atlantic Sea Island Group told Platts LNG Daily [subscription required] yesterday that its client hopes to resume work on the LNG deepwater port permit application in approximately six months.
“One of the biggest opportunities to create jobs and increase America’s energy security lies within the Marcellus Shale region,” said Jack Gerard, president and CEO of the American Petroleum Institute. “Pennsylvania, New York and West Virginia have enough natural gas to create hundreds of thousands of well-paying jobs and provide Americans with a stable, domestic energy source for generations to come.” [Red, yellow & bold emphasis added.]
While gas from the North Slope is a possibility for Donlin Creek, if it is competitive, the companies believe imported liquefied natural gas is a more practical alternative, at least in the short term, Van Nieuwenhuyse said. It will be six years before the mine can be operating, allowing three years for permitting and three years for construction. If permitting begins in late 2011, as is now planned, gas wouldn't be needed at Donlin Creek until 2018.
[T]here are concerns on whether industrial customers will be able to afford the North Slope gas even in the most optimistic cases in the state's study. Richard Peterson, president of Alaska Natural Gas-to-Liquids, a company working on developing a gas-to-liquids plant in Alaska, said he is worried about industrial projects being able to pay the costs estimated in the study.
One potential industrial customer is the natural gas liquefaction plant at Kenai that now exports LNG from Cook Inlet. The plant's LNG export license is due to expire in 2011. The plant owners, ConocoPhillips and Marathon Oil, have asked for a two-year extension of the export permit, to 2014.
However, the high cost of North Slope gas delivered through a 24-inch pipeline might be difficult for the plant to pay since its LNG must compete in Asia against LNG from Sakhalin, Malaysia and Australia.
Webmaster’s Comments: That is a 9.7% decrease in LNG imports. The US is swimming in domestic natural gas.
26 July 2010
"For their financial backer, and especially a financial backer of this financial acumen, to say, 'Well we don't want anything more to do with this' is a pretty good sign that it doesn't have value,'" ….
Goldman Sachs pulls out of Calais LNG
"We'll just have to wait and see, but again this is a kind of I guess reality, the grim reality that investors are looking at because again it's a sovereign nation saying no so I think the writing is on the wall, if you will."
"Those who do not learn from history are doomed to repeat it." —George Santayana (1863-1952)
Webmaster’s Comments: The Press Herald continues to get it wrong. Exactly what is the "projected demand for LNG imports" to Maine? Zero is the correct answer. The U.S. is drowning in domestic natural gas.
Atlantic Sea Island Group, creators of the so-called Safe Harbor Energy project, sent letters to the U.S. Coast Guard on June 23 and 29 expressing its intent to suspend the project. The June 29 letter, to Coast Guard Commandant Mark Prescott, cited the retirement of the company’s founder and CEO Howard Bovers along with ‘‘existing market conditions; the current ‘climate’ regarding offshore development in the aftermath of the recent Gulf incident; and the prevailing uncertainty with respect to both the U.S. and global economy.’’
Meg Gardner, citizen outreach coordinator for Sandy Hook-based Clean Ocean Action, said environmental groups consider the project dead because Atlantic Sea Island Group would have to start from scratch if it decided to submit a new application. She said the New York-based company has already conducted public hearings on its proposal and completed an environmental impact statement, the results of which she said will not be disclosed because of the project’s suspension.
Louisiana has suffered decades of coastal wetlands loss, due to human activity as well as natural forces, a destructive trend that leaves us far more exposed to tropical storms and hurricanes. Residents here watch a vast dead zone form off Louisiana's shore every summer, but there's little effort to reduce the cause -- agricultural runoff from the Midwest. We've seen fisheries pushed to near collapse by overfishing. And we've seen new industries eager to rush in, with little thought to possible negative consequences -- liquefied natural gas ports are one example; open ocean fish farming is another.
…Regarding National Energy Security: While the MIT report briefly states that gas relates to national energy security issues, absolutely no analysis is presented as to what the consequences would be if, after developing an ever-increasing number of natural gas power plants in the United States, we simply just do not have enough domestically produced gas and have to import it in the form of liquefied natural gas (LNG).
The National Energy Technology Laboratory has described that very likely scenario: "... The need for more LNG will create closer links to the world oil price, setting the stage for the marginal price of electricity to be set by the whims of foreign oil/LNG suppliers, for the first time in U.S. history."
In North America, the decision has all but been made for us. It's true, there was a time when the LNG was being hailed as the wave of the future. The proof is in the numbers, too. Between 2002 and 2003, U.S. Imports of LNG jumped 121% to 506 billion cubic feet. By 2007, our LNG imports had jumped another 52% to 770 billion cubic feet.
And just as we expected, the development of shale formations across the U.S. had a devastating effect on LNG. You can see the EIA statistics for yourself. During 2008, LNG imports had dropped like a stone, down 54% to 351 billion cubic feet.
Take a closer look at those EIA numbers on LNG imports. As you can see from the monthly statistics, LNG really started to plummet in November, 2007. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Take a look at the EIA report. November 2007 is when LNG demand tanked, due to vast supplies of shale gas — prior to the economy tanking. Economic recovery will not revive LNG demand.
23 July 2010
Calais LNG stunned opponents of the project for the second time in a week, with its announcement on July 21 that its financial backer, GS Power Holdings LLC, which is a subsidiary of Goldman Sachs, is selling its interest in the project. GS Power Holdings has invested about $24 million in the project so far, and project opponents, pointing to some of the hurdles faced by Calais LNG, have been questioning why the investment banking and securities firm has been continuing to support the project.
A week before, Calais LNG had requested postponement of the hearings on its applications for state permits, which was granted by the Maine Board of Environmental Protection (BEP). That request also stunned opponents, since the company has vigorously sought an expedited review by the state.
Webmaster’s Comments: This speaks to Calais LNG's lack of credibility.
"It looks to me like Goldman Sachs has figured out that this is not going to be a profitable venture. To be blunt, they're ditching the project - that's what it looks like to me," said Robert Godfrey of Save Passamaquoddy Bay, a group of citizens on both sides of the Canada-U.S. border who oppose LNG development in the bay.
The Graham government is also protesting a similar project under consideration by FERC. Downeast LNG, proposed for Robbinston, Maine, would sit directly across from St. Andrews, N.B. [Red, yellow & bold emphasis added.]
Move puts future of LNG plan in doubt
“It is fabulous news - no doubt about that - but it is not a complete surprise because we have just had this postponement. There is no need for it and Canada has been unrelenting in its opposition. I think at a certain point they just figured it is not worth it.”
“Obviously they have not said why they have withdrawn but we can assume they have looked at the market data and realized LNG markets just won’t support this project because the U.S. has 200 years supply domestically.”
If this is a bad investment for Goldman Sachs, Davies questioned how it could be a good investment for someone else. If Goldman Sachs thought it was going to be a good investment, she said, they would not be selling out.
Note: This article has no direct link to it on the WQDY-FM homepage. Please look down the WQDY page to find the article.
[On July 13], attorney David B. Van Slyke sent a letter to the Maine Board of Environmental Protection requesting "postponement of the hearings on Calais LNG's pending applications currently scheduled for July 19-23."
"In the Calais LNG project, Goldman Sachs sees an opportunity to invest in a project that will supply much-needed, cost-effective, cleaner natural gas to areas including Maine, New Hampshire, and Boston where there is growing demand for natural gas and a shortage of supply," the web site states.
Webmaster’s Comments: The problem is, of course, there is no need for Calais LNG since there is no shortage of supply. The natural gas market has been turned on its head. The US is drowning in domestic natural gas resources.
A week ago, Calais LNG startled the Maine Board of Environmental Protection with a last-minute request to postpone a long-scheduled hearing on its permit application. The board agreed reluctantly. It planned to meet today with lawyers in the case and reschedule the hearing.
But late Wednesday, Calais LNG made another surprise request, asking the board to cancel today's meeting. Shortly after noon Thursday, Susan Lessard, the board's chairwoman, agreed. She set up a conference call with the parties today to try to determine the project's status, said Cynthia Bertocci, the board's executive analyst.
"The fact that Goldman Sachs has pulled out is a reflection of the project's lack of value," said Ronald Shems, a lawyer representing Save Passamaquoddy Bay and American Indians who oppose the project. [Red, yellow & bold emphasis added.]
* "Vampire Squid" — the moniker given Goldman Sachs by Rolling Stone political writer Matt Taibbi in his 2010 April 5 article, The Great American Bubble Machine.
The letter, signed by Sens. Bill Wielechowski, Bettye Davis and Hollis French, a candidate for governor, along with Reps. Pete Petersen, Berta Gardner, Les Gara and Chris Tuck, makes it clear that they support the LNG facility and recognize its importance to the state. But they are worried the companies won't step up to meet natural gas demand in-state unless ordered to do so by continuing the agreement.
[Chairman of investment dealer Peters & Co. Michael Tims] said the result is a “significant lift” to Apache’s Canadian operations, which include a joint effort with EOG Resources to build and operate the proposed C$3 billion Kitimat LNG [export] project, liquefying gas from the shale and tight deposits of Western Canada for export to Asia. [Red emphasis added.]
22 July 2010
"… If Calais LNG can't find a new partner by Aug. 11, the company plans to withdraw its application with the BEP. …" [Red, yellow & bold emphasis added.]
“The fact that Goldman Sachs is pulling out speaks volumes to the project’s merit,” Shems said. [Red, yellow & bold emphasis added.]
"Our point all along has been the market doesn't call for this, so good luck trying to find somebody else", says Mahoney. [Red, yellow & bold emphasis added.]
A company [Calais LNG] hoping to build a liquefied natural gas terminal in Calais is working to line up a new financial backer after the original partner opted to drop out of the project. [Red, yellow & bold emphasis added.]
A proposed $1 billion liquefied natural gas terminal along the St. Croix River near Calais is in jeopardy after the project's developers lost their financial backing from GS Power Holdings, LLC, a wholly-owned subsidiary of Goldman Sachs. [Red, yellow & bold emphasis added.]
Calais LNG told state environmental regulators Wednesday that if Goldman Sachs can’t sell its ownership interest by Aug. 11, all permit applications would be withdrawn. GS Holdings has invested roughly $24 million so far in studies and permit applications.
“Calais LNG is manipulating the process,” Shems said. “The real story seems to be coming out in drips and drabs, and we are yet to hear the real story of the serious and larger problems that Calais LNG is facing.”
A lawyer representing Calais LNG, David Van Slyke, didn’t return phone calls and e-mail today asking if the developers had been aware last week of Goldman Sachs' pending pullout, and whether that had any bearing on their actions. [Red, yellow & bold emphasis added.]
"I have never believed they could make an argument of need for LNG. I don't think they have ever made a case," he said, referring to the Department of Energy and the Federal Energy Regulatory Commission (FERC).
Webmaster’s Comments: The US is in a 100-year natural gas glut.
SAN DIEGO (CN) - A Mexican citizen claims that Sempra Energy paid a few thousand dollars in bribes to have him thrown in jail, his family evicted, and their home north of Ensenada [Mexico] bulldozed, so it could build a $1 billion power plant whose legally required setback intruded on his land. Ramon Eugenio Sanchez Ritchie sued Sempra for fraud, conversion, trespass, assault and battery and false imprisonment, in Federal Court.
But that's not all, Sanchez says: "As a result of Sempra Energy's failure to comply with the court's order, on May 24, 2010, the court ordered that plaintiff's Property be restored to him within 24 hours of the issuance of the order. The Mexican authorities executed the order on May 25, 2010, and thereafter restored possession of the Property to plaintiff. However, because there now exists an LNG plant and pipeline within walking distance from plaintiff's property, plaintiff is no longer able to use or enjoy the Property."
CHINA wants more gas. North America has plenty of it. Chinese firms have cash. Drillers in North America need it. Those fundamentals, similar to the ones that have taken Chinese firms across the world in search of oil supplies, could transform the North American energy landscape. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Calais LNG and Downeast LNG seem to be the only ones not in tune with natural gas reality. North America is swimming in domestic natural gas. More LNG import infrastructure is senseless.
21 July 2010
On July 13, [Calais LNG] requested to postpone the state hearing to allow it more time to provide "certain relevant information" on marine resources, wetlands and soils, the Board of Environmental Protection said in a news release.
"Postponement at this point in the proceeding, comes at a considerable cost in time and resources to the Board and the other parties," board chairwoman Susan Lessard stated in the news release. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Calais LNG demanded expedited processing by the Board of Environmental Protection because the company was ready and did not want anything delaying their project. And then, when everyone else was ready, Calais LNG realized it could not deliver on its own demand.
HOUSTON--(BUSINESS WIRE)-- Florida Gas Transmission Company (FGT) and Williams Partners L.P. today announced that the Federal Energy Regulatory Commission (FERC) has approved a proposal to connect the existing FGT and Transco natural gas pipeline systems with the new Gulf LNG Clean Energy import terminal being developed near Pascagoula, Miss.
Where is the energy plan?
If, as the esteemed Dr Raymond Wright explains in his book, "natural gas is regarded as a transition fuel as we move away from oil towards a new energy agenda that will include renewables", why in this LNG thrust are we not concurrently hearing about the timetable, timelines, approaches and budgets for the inclusion of renewables in our plans? Surely, LNG is not the solution to all our energy woes, as important a part of the mix as it might be! We need to plan long-term.
FSRU and hurricanes
In our hurricane-prone Jamaica where half of every year is "hurricane season" and with plans for a single Floating Storage and Regasification Unit (FSRU), what happens when the island is placed on alert for a Category 5 hurricane? Will the FSRU have to seek safe harbour? If so, how early would it need to leave and how far out at sea would it need to go? What happens to Jamaica's energy supply during that time? In other words, what's our back-up hurricane plan? Additionally, will the FSRU just keep going like the Energiser Bunny or will the entire unit need to be taken out of service sometimes for routine maintenance? If so, for how long and again, what's the back-up plan? I have no doubt that Exmar and other experts have answers and explanations and I'm sure many of us would be happy to hear them.
In March, former Sen. Ted Stevens recognized that Canada and Lower 48 gas markets are saturated, yet Asian buyers are willing to enter into lucrative, long-term purchase contracts in volumes sufficient to construct an all-Alaska project.
We need to start the new Interstate 5 bridge and build the new mental hospital at Junction City. We need the new ocean cargo container facility and LNG plant in Coos Bay. These projects alone will create tens of thousands of new jobs.
Webmaster’s Comments: The Coos Bay LNG terminal site fails to satisfy world LNG terminal siting best safe practices.
Forecasted imports of liquefied natural gas (LNG) average 1.37 Bcf/d in 2010, a downward revision of about 0.14 Bcf/d from last month. Projected imports increase to 1.52 Bcf/d in 2011. While imports are expected to grow, higher prices in European and Asian markets will likely divert LNG cargoes from the United States. EIA also forecasts gross pipeline imports of 8.8 Bcf/d in 2010, a decrease of about 2.9 percent from 2009. EIA expects gross pipeline imports of 8.2 Bcf/d in 2011.
… An important topic of discussion during the research has been the importance of findings of shale gas in the United States and Canada that will transform both countries’ gas exports. This has had a negative impact on the activity of liquefied natural gas (LNG) projects worldwide, marking a significant change in the market from previous editions where the growing importance and magnitude of LNG projects had been repeatedly cited to researchers. In particular, excitement over the profitability that these projects offered has somewhat subsided as gas prices have come down. Companies are halting LNG projects that are now viewed as unprofitable in the current economic environment. NorthernStar Natural Gas suspended its six-year effort to build an import terminal in the state of Oregon that has so far cost the company $100 million. One interviewee noted, “There is certainly a trend away from LNG towards shale gas due to developments in technology and the fact that shale is easier and cheaper to extract.” … [Red, yellow & bold emphasis added.]
In a June conversation I had with Weixel, he estimated Canadian exports to the US Northeast were down 23% YoY, and down 44% if you didn’t include Liquid Natural Gas sent from the Canaport terminal in New Brunswick. Volumes of Canadian natural gas flowing into the US at the Niagara terminal in Ontario were less than 20% of capacity, and he added that there were talks going on about REVERSING the flow of the pipeline from the US into the Canada, due to the growing Marcellus shale production.
Webmaster’s Comments: The US is drowning in domestic natutral gas.
You've heard me say that here before and propose it as America's energy solution. So imagine my delight when Steve Forbes, FreedomFest's opening day keynote speaker, stepped up to the stage and said the same thing!
In fact, Forbes said that the United States boasts such ample natural gas reserves that it could actually be a net exporter of liquid natural gas (LNG) in just five years. [Red, yellow & bold emphasis added.]
Surge in production and decline in gas price have restrained LNG imports to the US since the beginning of 2010 and we believe LNG imports should stay low to strike a balance between demand and supply. [Red, yellow & bold emphasis added.]
April 20 - The US is now importing much less gas as companies use new extraction technology to fracture rocks, and Gazprom is reportedly deeply worried about the emergence of shale gas. Claire-Louise Isted assesses the claims and counter-claims of the Russian gas giant's fears. [Red, yellow & bold emphasis added.]
19 July 2010
The recent puzzling development in the Calais LNG proposal, in which the state Board of Environmental Protection canceled scheduled hearings on the project at the developer’s request, suggests the odds against Maine seeing an LNG terminal are growing. Whether it is market forces, or conditions specific to the developer, is unknown.
A superficial, decidedly lay analysis of the three proposals for the Passamaquoddy Bay area suggests the location is less than ideal. Maritime passage is tight, and the international nature of the waters poses permitting problems. Additionally, there is a recently upgraded LNG terminal just 50 miles away in St. John, New Brunswick. [Red, yellow & bold emphasis added.]
The request also was opposed by the National Park Service, which, point by point, disputed the reasons that Calais LNG had given for the delay. The reasons also were questioned by the the [sic] Roosevelt Campobello International Park Commission in Lubec. The commission's superintendent, Paul Cole, raised an additional concern: A second terminal proposal, Downeast LNG, is preparing to refile its state permit application for a project in nearby Robbinston. Participating in two LNG proceedings could become overwhelming, Cole wrote, prohibiting the commission from fully participating. [Red, yellow & bold emphasis added.]
Last Friday, the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) provided formal guidance on two questions submitted by Downeast LNG. First, PHMSA concluded that Downeast LNG may use the DLNG Source Term Model to calculate the vapor-gas exclusion zone for the sumps proposed for the Downeast LNG facility. Second, contrary to Downeast LNG's assertions, PHMSA concluded that Downeast LNG must analyze the potential effects of flashing and jetting in its siting analysis for its LNG regasification terminal. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: As with the proposed Downeast LNG terminal's vapor dispersion zone and thermal exclusion zone, Downeast LNG has attempted to get by without complying with all the LNG safety requirements.
16 July 2010
Perhaps the project’s financial backers, a shapeless subsidiary of Goldman Sachs, got tired of wasting money. Or perhaps Calais LNG recognized the significant weaknesses and impacts of the project as set forth in testimony by CLF and others.
If nothing else, this week’s debacle should make the Board question the merits of deciding proposals of this magnitude on such a frenzied schedule. This isn’t the first time the state has spent considerable resources on potential LNG projects only to have the applicants withdraw unannounced. Two years ago, Downeast LNG, who plans to re-file this summer, withdrew their permit application right after a week-long BEP hearing. As is often said, fool me once, shame on you. Fool me twice, shame on me. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: All three of the LNG proposals for Passamaquoddy Bay (defunct Quoddy Bay LNG, Downeast LNG, and Calais LNG) have suffered the same fate — inability to overcome the inappropriateness of their projects for this location.
[T]here was public resistance to a proposed liquefied natural gas terminal near Quebec City that would have been supplied by supertankers from Russia -a scheme that has since died a quiet death. [Red emphasis added.]
Webmaster’s Comments: This could mean existing US LNG import terminals would need to find another source of supply. Such a source would be more distant, meaning more expensive.
15 July 2010
"After months of political and legal efforts by Calais LNG to expedite these hearings ... Calais LNG's request to postpone the hearings should have been denied," [Conservation Law Foundation vice president Sean Mahoney] said.
Sean Mahoney of the Conservation Law Foundation, one of several groups opposing the project, said he found it “unbelievable” that Calais LNG had “clamored” for an expedited schedule and then was not able to meet its own obligations.
In a letter dated Wednesday and sent electronically to [Calais LNG attorney David Van Slyke], BEP Chairman Susan Lessard wrote, “I am surprised that this problem has only now been brought to my attention.” [Red, yellow & bold emphasis added.]
[Conservation Law Foundation vice president Sean Mahoney] says Calais LNG had previously been pushing for the process to move ahead as fast as possible. "We appreciate the position that the BEP was placed in by the request, and the rationale underlying the decision to grant it, but the simple fact is that the expedited schedule that Calais LNG exercised all of its political and legal muscle to obtain, is the bed that they made, and they should be required to sleep in it."
With all the testimonies for next week's hearings filed, Mahoney thinks company representatives requested the postponment because they were worried the hearings would not go well for them. "This is a delay seeking to shore up a project which they assured everybody, when they pressed for the expedited schedule, had all the information necessary. They'd spent two years and $25 million putting it together." [Red, yellow & bold emphasis added.]
Praxair Inc has installed a nitrogen supply system at the outlet of the Sabine Pass LNG import terminal in Cameron Parish, Louisiana. The system enables large volumes of liquid nitrogen to be delivered, pumped, vaporised and transported for injection into the pipeline system that connects the Sabine Pass facility with the main grid.
On June 7, 2010, on a farm near Cleburne, 50 miles southwest of Dallas, Texas, crews from the local power line company were digging holes for utility poles. One of the workers nicked an unmarked gas pipeline which subsequently exploded. The pipeline involved was the North Texas Pipeline, co-owned by Enterprise Products Partners, LP. The explosion killed a drill operator and injured eight others. It also resulted in a massive fire that could be felt miles away and burned for hours.
On June 9, a second gas pipeline explosion occurred near Darrouzett in the Texas Panhandle. Workers for C&H Power Line Construction of Oklahoma, a dirt contracting company, were hauling rock from a pit. The crew's bulldozer struck a 14-inch isolated gas-gathering line. The pipeline, owned by Denver-based DCP Midstream Partners LP, was used to bring natural gas from wells together for transport. The resulting explosion killed two and injured three other people.
While pipelines have been deemed the safest way to transport energy products such as oil and gas, recent failures of pipeline infrastructures, such as the BP oil spill in the Gulf of Mexico, have forced political leaders, businesses and citizens to consider the human cost and environmental impact of this form of resource transportation.
Webmaster’s Comments: Here's one more surplus LNG import terminal goint into service, further mooting Calais LNG and Downeast LNG.
A number of decorated signs were placed along the road preceding the banner. They highlighted previous victories of the anti-LNG campaign, as well as called out the proposed Oregon LNG terminal. A double decker banner was hung 40 feet high from trees across Highway 46 this morning. “We are winning, and still fighting!” was the message declared. “With the public outcry against the Bradwood Landing causing Northern Star to file bankruptcy, and now Palomar claiming the proposal is on indefinite delay, forest and climate advocates have seen a definite shift in progress,” says Meredith Cox of the Trans & Womyn’s Action Camp. “But we also realize that this fight is not over, and it’s become even more apparent that we now need to shift our resistance against Oregon LNG.”
The US Coast Guard (USCG) has chosen MaxID Corp to assist with security checks on crews on board some LNG carriers visiting US ports. More specifically the USCG is using MaxIDValidate Mobile Software running on the iDLMaxG multimodal handheld devices to validate each crew member on LNG ships bound to the US from Yemen. The software integrates biometric and biographic data from relevant US data repositories and is based on required crew information submitted from the inbound ship.
According to ICIS Heren, Mexican sources state that the proposed Lazaro Cardenas LNG import facility, the fourth import terminal planned for Mexico, may face commercial challenges. The developer of the LNG project, Grupo Indi, said this week that it hopes to begin operations at the facility in 2012.
North American Oil and Gas Production to Increase at AAGRs of 2.1% and 0.7%, Respectively, Between 2010 and 2020 North America is expected to witness growth in the production of both oil and gas in the next 10 years. In addition to strong growth in demand, the development of oil and gas shale fields will result in strong growth in oil and gas production from North America. Between 2010 and 2020, North American oil and gas production is forecast to increase at Average Annual Growth Rates (AAGRs) of 2.1% and 0.7%, respectively. Accordingly, the US and Canada will together produce 9,746,000 barrels per day of crude oil and 27,047.9 Bcf [27 Tcf] of natural gas in 2020.
Strong Growth in Natural Gas Demand Forces Mexico to Invest in Construction of Three New LNG Regasification Terminals Mexico is considering the construction of three new LNG regasification terminals in addition to the existing Energia Costa Azul LNG and Altamira LNG terminals. The country witnessed a strong surge in gas demand in the recent past. This growth in gas demand is mainly fuelled by the increasing number of gas-fired power plants in Mexico. Between 2010 and 2020, the natural gas demand in Mexico is expected to increase at an AAGR of 4.2% while production will decline at a negative AAGR of 0.1%.
14 July 2010
The proposed natural gas projects, which aimed to extract gas from offshore sites, were also hurt by new technology that allows oil companies to extract natural gas from shale in the eastern U.S. for far less than pumping it out from the bed of the Atlantic Ocean. [Red, yellow & bold emphasis added.]
The company that wants to build a $1 billion liquefied natural gas terminal in Calais surprised state officials Tuesday by asking them to postpone a long-anticipated hearing on the project, set for next week in Washington County.
As the members of the Maine House of Representatives from Washington County, we spend a lot of time thinking about what’s best for the people of our home communities. We’ve been chosen by our neighbors and friends to speak their concerns and advocate their causes in the halls of state government in Augusta.
Webmaster’s Comments: Apparently, Washington County legislators are either unaware of, or ignore, US and Maine natural gas market realities. They also disregard the LNG industry's own safety warnings against siting LNG terminals and ship transits in locations such as Calais LNG and Downeast LNG. (See LNG Terminal Siting Standards Organization for more on LNG industry best safe practices.)
13 July 2010
In a surprising move, the company that wants to build a $1 billion liquefied natural gas terminal in Calais today asked state officials to postone a long-anticipated hearing on the project, set for next week in Washington County.
The company said it’s lacking “certain relevant information” prior to the hearing and needs more time to get material to the board and the Department of Environmental Protection. [Red, yellow & bold emphasis added.]
Calais approves permits for proposed LNG terminal
The Maine Board of Environmental Protection (BEP) will hold a public hearing on July 19 through 23 on the applications by Calais LNG for a terminal in Red Beach and a pipeline in Calais, Baileyville, Baring and Princeton. The hearing will begin on Monday, July 19, at 8:30 a.m. at Calais High School and continue to Friday, July 23, as necessary, beginning at 8 a.m. each day. The entire hearing is open to the public. The daytime sessions will be devoted to receiving testimony from Calais LNG and the intervenors. There are also two groups that are participating as interested government agencies. The intervenors are: the City of Calais, the Conservation Law Foundation, Citizens for Clean and Secure Energy Inc., Industrial Energy Consumer Group, Maine State Chamber of Commerce, Maine Workers for a Healthier Environment Inc., Professional Mariners Group, Save Passamaquoddy Bay-U.S., and the Sierra Club. The two government agencies are the National Park Service and the Roosevelt Campobello International Park.
Opponents argue that the company plans to avoid LNG tankers destroying Maine lobster gear by steaming up the Canadian side of the line through the Western Passage - between Deer Island and Maine, across Passamaquoddy Bay and up the St. Croix River. [Red emphasis added.]
Webmaster’s Comments: …destroying New Brunswick lobster gear.
Representative Jan Malik (D) of Barrington and Warren introduced a resolution in the House of Representatives declaring the chambers opposition to the construction of LNG offshore platforms, transportation, and storage facilitates in Fall River, Narragansett Bay, and Mount Hope Bay. “LNG supertankers,” commented Representative Malik during debate over the resolution, “entering Rhode Island water every five days would have a negative aspect” on all things essential to the Rhode Island economy from the fishing industry to tourism.
The number of rigs drilling for natural gas reached 964, an increase of four rigs from the previous week, while the oil-directed rig count was 592, an increase of five rigs (chart of week ending July 9, 2010 is below). [Red emphasis added.]
[T]he lawmakers say Enstar still has not secured enough gas to supply its customers over the next few years, and they'd like to see ConocoPhillips step in with those supplies before sending any product to Asia.
While not opposing the export permit – pointing to its value to the state and region — Anchorage Democrat Bill Wielechowski said Alaska needs to make certain it takes care of its own before shipping more gas to Japan.
8 July 2010
In a letter to Weaver's Cove LNG issued yesterday, the U.S. Pipeline and Hazardous Material Safety Administration (PHMSA) states that it has found deficiencies in the SOURCE5 gas vapor dispersion model and the use of this model will no longer be considered in compliance with PHMSA's regulations. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: All FERC LNG terminal permitting has been placed in abeyance until accurate LNG vapor modeling can be attained.
Dan Wright, who chairs the LNG Threat Committee – the LNG advisory panel officially representing the town – told the council that his group has discussed the Working Group resolution, and that, at this point, “we are not entirely comfortable recommending that you sign it” because of some unresolved details involving the verbiage. He added, however, that the committee does not have any issues with the substance of the resolution.
Seven Alaska state legislators will ask the state's attorney general to oppose a two-year extension to a federal license for LNG exports from the ConocoPhillips and Marathon Oil LNG plant near Kenai, Alaska, until the companies agree to fulfill local gas supply requirements before exporting, the group said Thursday. [Red emphasis added.]
Palomar Gas Transmission, a joint venture between Northwest Natural Gas Co. and TransCanada Corp., told the Federal Energy Regulatory Commission in a vaguely worded letter dated Tuesday that it "was reviewing its project plan" in light of the bankruptcy of its biggest prospective customer — a proposed liquefied natural gas terminal on the Columbia River that suspended its own permitting efforts in May.
Saturday, Sept. 4: Rogue Riverkeeper will lead a hike along a portion of the proposed Liquefied Natural Gas pipeline where it traverses the Upper Rogue Watershed. The Jordan Cove/Pacific Connector LNG project would build an import terminal in Coos Bay and a 235-mile pipeline through the Coos, Coquille, Umpqua, Rogue and Klamath watersheds. Group will walk a portion of the pipeline route through the Rogue River-Siskiyou National Forest and discuss the project's impacts on private land, public land, fish, wildlife, energy independence and surrounding communities. Call to RSVP at 541-488-5789. [Red emphasis added.]
The U.S. Energy Information Administration revised its forecast for 2010 LNG imports to the United States in its July Short-Term Energy Outlook, predicting that U.S. LNG imports will average approximately 1.37 Bcf/d in 2010.
Webmaster’s Comments: The US natural gas rig count has increased approximately 50%. At the same time, natural gas prices paid overseas are higher than domestic prices. The news for Calais LNG and Downeast LNG keeps spiraling downward in a vortex of lack of market and bad news.
7 July 2010
[O]n May 14, a few weeks after the Deepwater Horizon oil spill began gushing millions of gallons of crude into the Gulf, [Alabama Governor Bob Riley] wrote a letter to the U.S. Maritime Administration asking for additional time.
On Tuesday, a Mount Hood environmental group called Bark, the Sierra Club and Scheller asked Oregon Department of State Lands to reconsider its recent decision to renew its lease of 96 acres on Warrenton's Skipanon Peninsula to the Port of Astoria. The Port subleases the land to Oregon LNG.
Palomar Gas Transmission has placed the permit for its pipeline on indefinite delay. The company has pointed to Bradwood’s failure, which calls into question where exactly the gas for Palomar was supposed to come from, as a primary reason.
After years of building the movement against liquefied natural gas (LNG) infrastructure, challenging LNG projects in the courtroom, rallying, lobbying, and direct action, climate activists working on LNG in Oregon are at last seeing some big and tangible indications that the end is near for high-carbon LNG in the Northwest. In May we finally defeated the Bradwood LNG terminal on the Columbia River – at least for the time being. And just yesterday news came out that the Palomar LNG pipeline, originally supposed to deliver imported LNG from the Bradwood terminal to another pipeline bound southward for California, has been put on-hold for an indefinite period.
"NorthernStar was a major shipper on the Palomar project, and certainly the outcome of the bankruptcy will have some impact on the project, but we have to wait until the bankruptcy court issues a decision," he said. "We've always been seeking additional commercial support because we never saw Palomar as an LNG project."
Companies in the natural gas industry remain cautious given the high, volatile price of liquefied natural gas—what lies ahead?
[T]he Oregon Department of Energy (ODOE) does not see a need for LNG. The ODOE logic is that foreign LNG costs more than domestic or Canadian suppliers for which the state of Oregon currently depends on for natural gas. Further, according to the ODOE, new natural gas discoveries in the U.S. could meet, “118 years of U.S. demand” avoiding altogether supply from foreign LNG producers, such as Qatar, Iran or Russia. [Red, yellow & bold emphasis added.]
Proven and probable natural gas reserves have been rising, thanks to horizontal drilling which makes it possible to drill for gas in shale formations that were previously unreachable. It's estimated that there may be enough natural gas to supply all of our needs for over 200 years. [Red, yellow & bold emphasis added.]
U.S. gas production will average 61.26 billion cubic feet a day this year, up from 61.22 billion estimated in June, the Energy Department said in its Short-Term Energy Outlook. Gas production will rise 2.1 percent from 2009.
Webmaster’s Comments: Calais LNG and Downeast LNG failed in their due diligence, and are chasing a fatally-flawed dream.
5 July 2010
Ships bringing liquefied natural gas from the Middle East pass regularly through Boston Harbor. Experts say there’s little chance of an LNG tanker going up in a fireball. Then why are city officials so worried? Should you be?
How would the city respond to an LNG fire?
The worst kind of fire would be an event so large and unprecedented, it’s near impossible to prepare for. The Massachusetts Firefighting Academy in Stow has an LNG training program, but it focuses on fighting fires from smaller-scale leaks, such as from pipelines or transport trucks. Pool fires (see page 91) are just too big. “We’re not training for that type of an incident,” says State Fire Marshal Stephen Coan, “and I don’t think that you can train for that type of an incident” on a large scale. Still, Boston city officials, Distrigas, and the Coast Guard say they regularly collaborate on joint emergency drills. [Red, yellow & bold emphasis added.]
The announcement that Cheniere Energy is planning to install liquefaction capacity at its Sabine Pass terminal in order to be able to export LNG from the site surprised many observers. Whatever the merits of this particular proposal, it is a sign that the business context for regas terminal investment in the Atlantic Basin has undergone a radical shift from the time – just a few years ago – when dozens of new import terminal projects in North America were competing to gain approvals. In this article we look at the evolution of the regas terminal business in the Atlantic Basin and take a look at some of the winners and the losers in the terminal building boom of recent years. [Red, yellow & bold emphasis added.]
As taxpayers of Jamaica, we will have to be like our contractor general and research where our money is going. I maintain that in this land of sunshine we are not seriously looking at solar energy because there is no kick-back in it for anyone - the sun is just too free - not like petroleum or LNG. I heard of an incident last year where millions of dollars of free pharmaceuticals were being blocked by an official because there was no "pop-off" involved.
Huff and puff as he may about questions being asked by the Press regarding the approval of a bid by a consortium of local and foreign investors to establish a Liquefied Natural Gas (LNG) Regasification Terminal and Natural Gas Transportation System in Jamaica, he cannot escape this one fact: that the procurement process and the involvement of Mr Ian Moore in the consortium are issues that must be examined.
Where the major problem arises is in the OCG's claim that the LNG procurement process was initiated in April 2007. At that time, Mr Moore was still chairman of the PCJ [Petroleum Corporation of Jamaica].
Last week the energy views and the dialogue took on a positive light which will bring transparency and careful consideration of the options facing Jamaica and our attempts to control costs. The Jamaica Manufacturers Association president has correctly registered his caution about the use of LNG as the promised saviour of our energy problems. Nearly every productive sector has expressed concerns regarding this approach, and with good reason.
Webmaster’s Comments: Earth coordinates for this LNG terminal are: 19° 1' 9.87" N, 104° 15' 31.00" W.
3 Jul 2010
Energy: Canadian consul opposes tankers using territorial waters
The Canadian consul general to New England, Neil Le Blanc, made clear his government’s rigid stance against LNG tankers in Passamaquoddy Bay in a letter sent Tuesday to Maine Department of Environmental Protection Commissioner David Littell.
Webmaster’s Comments:The problems for Calais LNG keep getting bigger and bigger.
LNG ships wouldn’t be any different than the massive cargo ships that haul fertilizer and other goods to the Bayside terminal now. In fact, LNG is nontoxic, insoluble in water, and lighter than air. It is actually less of an environmental hazard than some of the goods on the water today (and is much safer and cleaner than oil).
Webmaster’s Comments: Boston would like to eliminate the terminal, due to the safety threat it places on the public.
LNG (methane, CH4) is soluble in water. Solubility increases as temperature decrease and as pressure increases. See graph at The Engineering Toolbox. Methane is more soluble in unfrozen water at 0° C than oxygen. (At 0° C / 32° F, water can be in either a liquid or a frozen state.)
LNG is not lighter than air. LNG is a liquid, although LNG begins to vaporize immediately upon leaving containment. Once LNG vaporizes, it must warm 100° F before it begins to rise. In the meantime, it hugs the Earth, blows with the wind, perhaps for miles, initially presenting a cryogenic, and asphyxiation risk, and then a fire, thermal radiation, and explosion risk until sufficiently diluted with air or until it warms sufficiently to rise. The Federal Government considers LNG vapors to be hazardous up to 2.2-miles from the location of release on water, although it can be hazardous at longer distances, depending on topography, humidity, and prevailing winds.
LNG is safer than oil? When LNG burns, it produces a greater thermal-radiation burn threat to people and the environment, since it produces little smoke. Burning oil is smoky, blocking much of the thermal radiation. Oil does not gasify at a rapid rate, while LNG begins gasifying — always containing a flammable edge until sufficiently diluted with air — immediately upon leaving confinement.
At the end of a presentation by Weaver’s Cove Energy at Wednesdays Board of Selectmen meeting, Selectman Patrick O’Neil declared himself “unswayed.” He is still opposed to an LNG facility in Fall River and an LNG offloading platform in town waters of Brayton Point.
The Jamestown LNG Threat Committee convened last Thursday to focus on the design for the “Congress of Councils” event – a vehicle through which surrounding town councils and the leadership of the Wampanoag Nation plan to express solidarity in their opposition to the proposed transportation of LNG to a terminal in Mt. Hope Bay.
“The economics don’t work… Hess is basically looking backwards… five years ago, there was a 30-year supply of natural gas and today, it is estimated to be a 100-year supply,” [Committee member Lowell Thomas] said. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Even Boston's supply for natural gas is oversupplied by existing LNG import infrastructure and pipelines. Calais LNG and Downeast LNG have no market.
Webmaster’s Comments: Even New York did not need the LNG from this now-defunct project. Calais LNG and Downeast LNG are blowing smoke.
GAS pipeline construction in the US is booming as midstream operators develop capacity to transport natural gas resources emerging from unconventional plays. Although construction in 2009 slowed slightly compared with 2008, when pipeline capacity grew rapidly, activity continued at a brisk pace and is expected to remain strong for several more years. At least three dozen projects are scheduled for completion this year alone (see Table 1). [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Domestic natural gas, along with over 30 new pipeline and expansion projects, there is no need in the US for additional LNG import infrastructure. Calais LNG and Downeast LNG are chasing a pipe dream.
ICIS Heren [subscription required] reports that the first phase of expansion capacity at the Elba Island LNG terminal, which has been contracted by Shell, is expected to be ready for commissioning by September.
[June 29], FERC released its Environmental Assessment of Cameron LNG's proposal to install a spare compressor unit that will be used to compress and deliver boil-off gas. FERC staff recommends that the final order on the project include a finding of no significant impact.
The process and quite likely progress of delivering LNG to householders and the business community will in all probability cost much more than the U$600 million plus the price of gas that is being fed to Jamaicans. The timeline of 2012 for its implementation is likely to be a pipe dream. Wake up, we are already half-way though 2010! Skilfully, we are told that this deadline is contingent on the project remaining "on track". Yet we have no idea if the 2012 timeline was based on fast-track, that is, with most optimistic projections, which all of us who run businesses know is tantamount to the "road to hell paved with good intentions".
"Apart from the drop in demand caused by the global recession, gas supplies have increased rapidly due to the technological breakthroughs in the extraction of shale gas in the United States," said documents supplied to the Business Observer by the energy ministry. "This development caught the global gas industry, including the major companies, by surprise and almost overnight there was a doubling of the estimated recoverable gas reserves in the US as a result of the shale gas phenomenon."
The shift in the US gas market caused by shale has have forced suppliers to seek alternative markets while some "who previously were dismissive of Jamaica in the 2006 to 2008 period, (are) now demonstrating active interest in the supply of LNG to Jamaica". [Red, yellow & bold emphasis added.]
Moore was reacting to last week's decision by the Office of the Contractor General (OCG) to go into the offices of both the Petroleum Corporation of Jamaica (PCJ) and the Ministry of Energy and Mining and seize documents and records pertaining to the bid process in response to complaints regarding transparency issues and the involvement of connected parties.
The competition between a BP- ConocoPhillips joint venture (JV) and TransCanada to bring gas from the Alaskan North Slope to the lower 48 states may be coming to a head. The Houston Chronicle newspaper on June 28 cited sources close to the negotiations as saying that the BP-Conoco JV is in early talks to drop its Denali pipeline project and join the ExxonMobil -backed TransCanada'sproject. A TransCanada executive denied the report but said the company remained open to equity participation with any large supplier.
Webmaster’s Comments: With the US in a 100-year natural gas glut, even more domestic natural gas will be flooding this way.
"…Sempra LNG, and Energia Costa Azul, have commenced a campaign to attack the Federal Judge in the case in an attempt to discredit and place undue pressure upon him in local newspapers," said Sanchez Ritchie.
Sempra LNG has been running into judicial problems with its Energia Costa Azul unit. Sempra LNG has been ordered to stop work at the Costa Azul facility in a June court order filed in Ensenada, Baja California. Allegations include the lack of an environmental impact report to Mexican standards and stories of local residents being chased off their own property through alleged deed misdeeds.
Because of the recent surge in its unconventional gas output from shale deposits, the US has become a “virtual gas exporter”, the International Energy Agency (IEA) said last month in its medium-term oil and gas market report. Last year, the US became the world’s biggest gas producer, overtaking Russia. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: There is no compelling reason to construct Downeast LNG or Calais LNG.
In hot pursuit of a fuel that is less risky and more accessible
Gas is also getting cheaper to develop. The cost of gas developments has come down—that of an offshore “floating” LNG terminal has fallen by half in the past two years, for example—while the growing inaccessibility of easy oil has made oil projects more expensive. [Red, yellow & bold emphasis added.]
Shale gas accounts for between 15-20 percent of total gas production in the U.S. That is expected to quadruple in coming years. It is expected to overtake both conventional gas as well as other liquid fuels as an energy source within the next decade. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Shale gas supplies will continue to grow, even after already beating down the need for additional LNG import infrastructure. Calais LNG and Downeast LNG are living in the past.
The United States has a significant natural gas resource base, enough to equal about 92 years' worth at present domestic consumption rates. Much of this is from unconventional sources, including gas shales. While there is substantial uncertainty surrounding the producibility of this gas, there is a significant amount of shale gas that can be affordably produced. [Red, yellow & bold emphasis added.]
Tim Considine, one of the authors of the Penn State study, The Economic Impacts of the Pennsylvania Marcellus Shale Natural Gas Play: An Update, anticipates that 1,700 additional wells will be drilled in the Shale in 2010, judging from an industry survey conducted as part of the study. "That's on top of the 700 drilled in 2009. . . that's a very significant increase," Considine said. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The US is drowning in natural gas.
The US, a veritable Saudi Arabia of natural gas, will become a huge exporter of the commodity with this decade, Cramer said Tuesday, as more oil-based countries switch to this alternative energy source. [Red, yellow & bold emphasis added.]
The battle for American energy independence will not be easily won anytime soon but it is a long term battle that must be fought. America’s energy sources come to us primarily via oil and natural gas but it is the independence from foreign oil that must come first but it cannot be at the expense of importing additional natural gas from Canada or Liquid Natural Gas (LNG) from overseas natural gas facilities. Victory in this battle will be the next awakening of America and its will usher in a new, long term economic expansion that will re-establish America as a world economic power. [Red, yellow & bold emphasis added.]