News Articles
about
Passamaquoddy Bay & LNG

*9* of 11 US LNG Import Terminals Have Applied to Export

What Is It About the Natural Gas Marketplace
That Downeast LNG Doesn't 'Get'?

[Red bold emphasis added.]

LNG adrift at sea — Forbes

Remember LNG, or liquefied natural gas? Well, it’s still around even though it has been overshadowed by its cousin, shale gas.

U.S. companies with heavy investments in LNG must therefore re-invent themselves. And that is turning out to be a more challenging proposition than they had figured. It’s not just some of the local communities that are skeptical. It’s also America’s top industrial concerns that are dependent on natural gas and that want domestically-produced shale to stay right here so prices remain low.

[T]he most vocal opponents of taking that shale and shipping it overseas are the large manufacturers such as Dow and DuPont, which say that it will drive up natural gas prices and hurt their ability to compete. And with natural gas prices now at $3 per million BTUs and with forecasts not much higher, those businesses are on the front lines. Asia, for example, is paying much higher prices at around $18 for the same unit while Europe is spending about $12.

Of the nation’s 11 LNG receiving facilities, 9 have asked for permission to have them converted to export terminals.

US on brink of strong oil, gas growth, Senate panel told — Oil & Gas Journal

EIA’s initial 2012 AEO also projects that the US will become a net exporter of LNG by 2016, a net exporter of gas by pipeline by 2025, and an overall net exporter of gas by 2021, he said in his written statement. “The outlook reflects increased use of LNG in markets outside of North America, strong domestic gas production, reduced pipeline imports and increased pipeline exports, and relatively low gas prices in the United States compared to other global markets,” Gruenspecht said.

“With increasing supplies, gas prices in the United States are down,” observed a fourth witness, Richard H. Jones, deputy executive director of the Paris-based International Energy Agency.

“There are several other shale areas that are just starting to be drilled, and if those prove as prolific, then our [production] forecast is likely to be raised,” he added.

World's largest LNG buyer signs up for US natgas — Business Recorder, Pakistan

South Korea's Kogas, the world's largest single buyer of liquefied natural gas, will purchase US natural gas from Cheniere Energy's proposed Sabine Pass export plant in Louisiana by 2017 under a 20-year deal announced Monday.

Soon consumers across the globe could be burning natural gas from the United States, where supply continues to outstrip demand.

Record natural gas production due to the prolific development of shale deposits across the United States has left the country with decades of supply, but has pushed prices way below global levels.

Shale gas the place to be — Financial Post, Dons Mill, ON

[T]he U.S. sees shale gas as a major contributor to its goal of energy independence and will encourage its use even if fossil-fuel critics don’t like it, while adopting strict regulation to ensure it’s produced safely.

But the discovery of a century’s worth of shale gas on the continent has resulted in a glut in supplies that has sunk prices to the US$2.70 per thousand cubic feet range, far below the US$5 to US$7 level required in North America to produce the resource economically. Companies like Chesapeake Energy Corp. and ConocoPhillips are shutting in gas wells. Encana may announce similar plans when it gives its year-end results on Feb. 17.

Souki: Cheniere may look to expand exports — UpstreamOnline

Cheniere chief executive Charif Souki told Reuters that if the company indeed goes ahead with the four-train Sabine Pass facility – which is still pending regulatory approval and a final investment decision – the company may consider adding another two trains.

The company is also lining up customers for another proposed facility in Corpus Christi, Texas, Souki told the news wire.

Update 2-Cheniere eyes expansion after KOGAS LNG deal — (Reuters) London Southeast, London, England, UK

It ... shows the huge turnaround in the U.S. gas market prompted by new technologies that have unlocked vast reserves of natural gas in shale deposits, evaporated import needs and turned the United States into a potentially major exporter. Sabine Pass was originally built in 2008 to import LNG.

Korea Gas to buy U.S. LNG as gas slump attracts Asian importers — Bloomberg Businessweek

Asia accounts for more than 60 percent of global LNG demand and buyers are turning to North America, where record production from shale deposits has driven down U.S. prices. GAIL India Ltd. last month became the first Asian buyer of U.S. LNG at Henry Hub prices, weakening a 40-year-old oil-link currently used to price long-term supplies in Asia.

“More and more Asian buyers will look to buy LNG from the U.S., that will be their first choice because it’s cheaper,” said Osamu Fujisawa, an independent energy economist in Tokyo. “As more companies get U.S. LNG, Asia’s link to oil will start weakening over the years.”

Sierra Club submits comments on EA prepared for Sabine Pass LNG Liquefaction project — LNG Law Blog

Late last week, the Sierra Club submitted comments regarding FERC's Environmental Assessment (EA) prepared for the Sabine Pass LNG liquefaction project. The comments criticize the EA, stating that the document does not consider secondary and tertiary environmental impacts, such as rising natural gas prices inducing more coal-fired electricity generation.

LNG exports present policy, political challenges for U.S. regulators — LNG Law Blog

In an analysis offered by Platts LNG Daily [subscription required], several members of the LNG industry expressed concern over whether the U.S. Department of Energy (DOE) might revoke LNG export authority even after authorizing exports. The industry participants noted that portions of DOE's authorization of LNG exports from the Sabine Pass LNG facility suggest that DOE may assert authority to rescind an LNG export permit under the Natural Gas Act.

Separately, Platts LNG Daily also reports that an industry analyst with BP views the issues surrounding U.S. LNG exports as political, not economic, challenges. [Subscription required]

U.S. LNG exports may impact Chevron’s Australian gas pricing — Trefis, Boston, MA

American gas companies have managed to snap up two Liquefied Natural Gas (LNG) supply contracts with Asian players over the last two months on contracts that link prices to the U.S. benchmark known as the Henry Hub. Analysts at Bank of America believe that increasing gas exports from the U.S. could impact oil majors like Chevron that are developing multi-billion dollar LNG projects in Australia, targeting future demand from Asian countries. LNG prices in Asia are linked to crude prices. Sourcing cheaper gas from the U.S. could potentially weaken the 40 year old pricing standard in Asia, delaying LNG projects in Australia. ConocoPhillips and Exxon Mobi are also involved in LNG projects to target demand from countries like Japan, China and India.

US Natgas Production to Exceed Consumption

4 New Pipelines Are Delivering to the Northeast

[Red bold emphasis added.]

U.S. energy supply and demand — Chemical & Engineering News, Wayne, PA

U.S. production of natural gas will exceed consumption early in the next decade, and the U.S. will begin exporting liquefied natural gas by 2016, the report predicts.

EIA: Four Northeast gas pipelines started operations in 2011 (USA) — LNG World News

U.S. Energy Information Administration said in a report Friday that four interstate natural gas pipeline projects in the Northeast U.S. began commercial service in 2011, adding nearly 1.5 billion cubic feet per day of capacity and over 181 miles of new pipe.

Natural gas pipeline projects starting service in the Northeast in 2011 include:

• TEMAX/TIME III, operated by Texas Eastern Transmission, began service on August 26, 2011. This 39-mile pipeline and compression expansion added 455 million cubic feet per day (MMcfd) of capacity from Clarington, Ohio to York County, Pennsylvania.
   
• 300 Line Expansion Project, operated by Tennessee Gas Pipeline Company, began service on Nov 1, 2011. This 127-mile looping and compression expansion added 350 MMcfd of capacity from northern Pennsylvania to northern New Jersey. Since it began operations Tennessee has increased its receipts of Marcellus natural gas on its system.
   
• Tioga County Extension Project, operated by Empire Pipeline, began service on November 21, 2011. This 15-mile pipeline expansion increases northeast Marcellus natural gas take-away capacity by 350 MMcfd to central New York.
   
• North and South Expansion Project, operated by Inergy Midstream, began service on November 1, 2011. The installed compressors added 325 MMcfd of incremental capacity between receipt and delivery points at the interconnects with the Millennium Pipeline and Tennessee Gas Pipeline.

Webmaster's comment: These are just four of around 30 new pipeline and pipeline expansion projects in play to bring domestic natural gas to the Northeast.

US Cheniere finalises Sabine Pass marketing with KOGAS LNG supply deal — ICIS Heren

South Korean gas incumbent KOGAS has lined up to purchase 3.5 million tonnes per annum (mtpa) from the third train of Cheniere Energy's proposed 18mtpa Sabine Pass liquefaction project in the US Gulf. This makes it the only US LNG export scheme holding a regulatory licence with nearly all of its capacity committed under long-term contract.

Spain's Gas Natural Fenosa and GAIL each secured 3.5mtpa of capacity on trains two and four respectively. This left the field open for KOGAS to secure the remaining train, which Souki had said was committed as long ago as last December, but had kept the identity of the buyer undisclosed.

World’s largest LNG buyer Kogas signs up for U.S. natural gas — Calgary Herald, Calgary, AB

“KOGAS is our fourth foundation customer and we have now sold 16 mtpa of the 18 mtpa being developed at the Sabine Pass LNG terminal,” said Cheniere chief executive Charif Souki in a statement.

Record natural gas production due to the prolific development of shale deposits across the United States has left the country with decades of supply, but has pushed prices way below global levels.

ConocoPhillips says more study needed of Alaska LNG exports — Daily News-Miner, Fairbanks, AK

In a conference call on the company's fourth-quarter earnings, a ConocoPhillips executive gave a highly guarded response regarding future LNG exports from Alaska, saying it is something that needs more study.

[Red bold emphasis added.]

LNG [export] trade is about to take off (Jan 27) — Seeking Alpha

And just this week, the Brookings Institute's Energy Security Initiative announced that the lower 48 states will be producing more gas than the U.S. needs for the foreseeable future. That means the door is now wide open for the U.S. to begin exporting in significant amounts.

BG Group takes on more U.S. LNG (Jan 27) — UPI

The Energy Department's Energy Information Administration said it expected a cumulative increase in U.S. natural gas production through 2035. The United States, the agency added, is on track to become a net exporter of LNG by 2016.

No more slow boat to China for US liquefied natural gas (Jan 27) — AOL Energy

Widening of the Panama Canal, due to be completed in 2014, will allow most LNG tankers to transit the isthmus and make natural gas from Gulf of Mexico ports "instantly economic" to transport to high-price Asian markets.

[A]s producers have responded to low prices by drilling less, production has stayed high due to advancing technology.

Natural Gas Abundance Resulting in New Northeast Pipelines

Obama: “We are the Saudi Arabia of natural gas.”
US to Become Net LNG Exporter by 2016

[Red bold emphasis added.]

Marcellus Shale could shift entire North American natural gas market — Industrial Info Resources

The geographic location of the Marcellus Shale makes it particularly valuable resource. "It's located in a densely populated area by New York and Philadelphia, where energy consumption is high," said Davis. The development of the Marcellus is driving infrastructure development in the area. "Typically what would happen is we would send natural gas from the southern states--Texas, Louisiana, offshore from the Gulf of Mexico--up to the Marcellus area. But now that they have this abundance of fuel in their own back yard, what we're seeing is a lot of pipelines and processing structure being built." There's simply not enough processing capacity to handle the amount that will be produced in the area, which is driving infrastructure development and helping boost the economy of the Marcellus area.

Obama: ‘We are the Saudi Arabia of natural gas’ — Las Vegas Sun, Las Vegas, NV

...Obama told some 200 people that the United States sits over enough natural gas that, if developed, it could provide a relatively carbon-clean energy source for 100 years.

“We are the Saudi Arabia of natural gas,” he said.

Orders granting, amending and vacating authority to import and export natural gas and liquefied natural gas — Federal Register, Government Printing Office

The Office of Fossil Energy (FE) of the Department of Energy gives notice that during December 2011, it issued Orders granting, amending and vacating authority to import and export natural gas and liquefied natural gas. These Orders are summarized in the attached appendix and may be found on the FE Web site at http://www.fossil. energy.gov/programs/gasregulation/ authorizations/Orders-2011.html. (PDF; 160 KB)

U.S. to become LNG exporter by 2016 — UPI

The EIA said imports from Canada declined more than 60 percent as natural gas production in the United States increased. The agency said it expects the United States to export around 1.1 billion cubic feet of liquefied natural gas per day starting in 2016.

This would make the United States a net LNG exporter by [2016].

BG increases LNG volumes to 5.5 MTPA under its 20-year LNG sale and purchase agreement at the Sabine Pass LNG terminal [Press release] — PRNewswire

Sabine Liquefaction is developing a liquefaction project at the Sabine Pass LNG terminal in the Gulf Coast region of the U.S. that is expected to include four liquefaction trains capable of producing up to 18 mtpa of LNG. To date, Sabine Liquefaction has entered into three LNG sale and purchase agreements, including the agreement with BG for 5.5 mtpa, an agreement with Gas Natural Fenosa for 3.5 mtpa that commences with the start of train two operations and an agreement with GAIL (India) Limited for 3.5 mtpa that commences with the start of train four operations. Sabine Liquefaction expects to sell an additional 3.5 mtpa of LNG under an agreement that would commence with the start of train three operations, which would bring total contracted volumes to 16.0 mtpa or approximately 90 percent of total expected LNG volumes.

Investment analysts do not expect significant North American LNG exports this decade — LNG Law Blog

Analysts with Barclays Capital issued a report this week predicting that LNG exports from North America will total 2 Bcf/d by 2017. According to Platts LNG Daily, the analysts state that North American LNG export proposals face a number of regulatory and market challenges. [Subscription required]

President Obama: US Has 100-Year Supply of Natural Gas

[Red bold emphasis added.]

Obama State of the Union transcript: Full text (Jan 24) — Politico

We have a supply of natural gas that can last America nearly one hundred years, and my Administration will take every possible action to safely develop this energy. Experts believe this will support more than 600,000 jobs by the end of the decade. And I’m requiring all companies that drill for gas on public lands to disclose the chemicals they use. America will develop this resource without putting the health and safety of our citizens at risk.

Feds to review liquefied natural gas project (Jan 24) — The Brownsville Herald, Brownsville, TX

...The United States is now believed to have more natural gas than it can use in a century.”

The Siren song of LNG exports [Blog] — SmartPlanet

Nine gas export applications have been filed with the federal government, for a total of 12.6 bcf per day of LNG export capacity. That’s 19 percent, or almost one-fifth of total U.S. gas consumption today. These extremely expensive LNG export terminals typically have at least at 20-year lifespan, so whatever LNG export capacity we build will have an enduring impact on domestic supply. . . at least until the rest of the world unlocks its shale gas resources, and makes LNG from the U.S. uneconomical.

Before we greenlight large new volumes of LNG exports, we should answer two questions: 1) After satisfying new domestic demand, is there enough left over to export it; and 2) Will it benefit the U.S. economy?

If we follow through with the planned expansion of LNG exports, we can say goodbye to that 100-year supply, and goodbye to cheap heat, cheap and clean(ish) power generation, cheap fertilizer, and cheap feedstocks for plastics and petrochemicals.

The wise course of action is to make our gas last as long as possible and use it domestically. We should take advantage of it as a cheap bridge fuel to see us over the chasm of terminal oil decline that we’ll be hitting around 2014, not burn it as quickly as possible. The DOE should tie LNG exporters to the mast, stuff wax in the ears of Congress, and deny new exports until we have a better idea of just how much gas we really have, and how much we are planning to use.

Lobbying: US lures Pakistan with cheaper gas than Iran — The Express Tribune, Karachi, Pakistan

The US has six billion cubic feet of surplus gas per day that could be exported, an energy expert said, adding that further reserves of shale gas have also been discovered.

Huge Increase in Natural Gas Production by 2035

[Red bold emphasis added.]

USA: EIA expects huge rise in natural gas production — LNG World News

Shale gas production is expected to be the driving force behind increased natural gas production, increasing from 5.0 trillion cubic feet in 2010 to 13.6 trillion cubic feet in 2035, accounting for nearly half of all domestic natural gas production.

Webmaster's comment: That's a 272% increase in production.

America's new energy era — The National Interest

The fact is, the United States is less dependent on foreign energy imports than we were only a couple of years ago. This is primarily due to what’s known as the North American Unconventional Gas Revolution. The development of “fracking” technology has allowed American and Canadian companies to extract more than one hundred years’ worth of previously inaccessible natural gas here at home. Despite environmental concerns stirred by the extraction methods, fracking caused major plans for importing liquefied natural gas to be quickly curtailed and the United States to start exporting the fuel that experts from ExxonMobil as well as the International Energy Agency have suggested will shape the world’s energy future.

Cheniere submits description of Corpus Christi LNG Liquefaction project to FERC — LNG Law Blog

Cheniere has filed a detailed project description for the company's planned Corpus Christi LNG liquefaction project with FERC. The report, submitted under FERC's pre-filing procedures, is available in the Commission's eLibrary under Docket No. PF12-3.

[T]he company faces a number of challenges in the coming years as it works to bring the planned LNG export facilities at the Sabine Pass terminal online.

Port of Brownsville hopes to add natural gas terminal — KWTX, Waco, TX

Gulf Coast LNG filed an application with U.S. Department of Energy this month that proposes exporting liquid [sic] natural gas from the Brownsville port.

Brownsville Port gives green light to Gulf Coast LNG on lease option — Platts

The Port of Brownsville Board of Commissioners on Tuesday announced the approval of a lease option agreement with liquefied natural gas company Gulf Coast LNG Export, for 500 acres of port property.

Smith is also CEO and founder of Freeport LNG Development, which owns and operates a 2 Bcf/d LNG receiving and regasification facility near Freeport, Texas, and is currently expanding that facility to add liquefaction and export capability.

EIA outlines potential impacts from more natural gas exports (Jan 23) — Oil & Gas Journal

Potential buyers might place value on the global LNG supply diversity more US exports would provide, but relatively high shipping costs would put supplies from the US at a cost disadvantage relative to supplies closer to Asia and other key markets, the analysis said. LNG export projects in the US would frequently compete not just against other LNG complexes, but against other gas supply projects aimed at similar markets such as pipelines from traditional suppliers or projects to develop shale gas in Asia or Europe, it said.

EIA price study too aggressive on US LNG export volumes: panel — Platts

A recent US Energy Information Administration study overestimated the volume of liquefied natural gas likely to be exported from the US, skewing the agency's findings on the domestic price impact of exports, participants in an LNG panel said Tuesday.

"To just have 12 Bcf/d [of exports] materialize like that is absurd. First of all, it would have an impact domestically, but the biggest impact would be in the international market because you would flood it," Medlock said.

US a Net LNG Exporter by 2016

Projected Marcellus Shale Reserves Drop by 66%
Natgas Imports From Canada to Drop 62% by 2035

[Red bold emphasis added.]

U.S. seen being liquefied gas exporter in 2016 on fracking gains — Bloomberg

U.S. will sell abroad 1.1 billion cubic feet of LNG (LNG) a day in 2016, and add 1.1 billion cubic feet three years later, the agency said today in its annual forecast. The U.S. will also sell more natural gas to Mexico via pipelines, according to the agency, a part of the Energy Department.

“With supply growing faster than consumption over the next decade, natural-gas production exceeds domestic consumption,” Howard Gruenspecht, acting administrator for the Energy Information Administration, said during a conference in Washington. The surplus will be exported “primarily to Mexico and overseas,” he said.

U.S. oil production to surge on shale output: Energy Information Administration — Calgary Herald, Calgary, AB

Despite significantly lowering its estimate for U.S. shale gas reserves, the EIA said the United States will produce 7 per cent more natural gas between 2010 and 2035 than previously projected.

U.S. natural gas output is projected to hit 27.9 tcf in 2035, up from 21.65 tcf in 2010.

Strong natural gas output will fuel exports of liquefied natural gas, with the United States becoming a net exporter of LNG in 2016 at a capacity of 1.1 billion cubic feet, the EIA said. LNG export capacity is expected to rise by an additional 1.1 bcf in 2019.

US to become less dependent on energy imports - DOE — ICIS

WASHINGTON (ICIS)--Increasing growth in domestic oil and natural gas production along with energy efficiency gains and slower economic growth will make the US less dependent on energy imports over the next two decades, the Energy Department said on Monday.

In its annual long-term energy outlook, the department’s Energy Information Administration (EIA) said its analysis of US energy production and use over the next 23 years shows a continuing fuel-shift in the nation’s power industry from coal to natural gas and “US natural gas production exceeding consumption” during the years up to 2035.

“The US is projected to become a net exporter of liquefied natural gas (LNG) in 2016, an overall net exporter of natural gas in 2021, and a net pipeline exporter in 2025,” he said.

US EIA projects growing gas exports despite slashed shale outlook — Platts

...US gas exports will still boom over the next 15 years as the nation becomes an net exporter of LNG in 2016, an overall net exporter of gas in 2021 and a net pipeline exporter in 2025.

Canadian gas imports to U.S. to decline 62% by 2035: report — Financial Post

Canada’s natural gas imports to the U.S. is forecast to fall by 62% by 2035 as the U.S. enjoys a shale gas production boom, according to the latest Annual Energy Outlook report by the U.S. Department of Energy.

U.S. reduces estimate for Marcellus Shale gas reserves by 66% — (Bloomberg) San Francisco Chronicle, San Francisco, CA

About 141 trillion cubic feet of gas can be recovered from the Marcellus shale using current technology, down from the previous estimate of 410 trillion, the department said today in its Annual Energy Outlook. About 482 trillion cubic feet can be produced from shale basins across the U.S., down 42 percent from 827 trillion in last year's outlook.

Webmaster's comment: Even with this reduction in projected reserves, US natural gas production is still projected to soar. See the next article, below.

Feds slash natural-gas resource estimate; production to keep rising — The Hill, Washington, DC

The Energy Department’s statistical arm has sharply cut its estimate of the country’s endowment of natural gas in shale formations, the type of gas commonly tapped with the controversial drilling method called hydraulic fracturing.

“I am sure this will receive some attention. But resource estimates are not the only driver, or even the most important driver, of natural-gas production and price projections for the next 25 years,” [EIA director Howard Gruenspecht] said during a press conference at Johns Hopkins University’s School of Advanced International Studies.

The EIA forecast projects continued increases in U.S. natural-gas production, and indeed EIA has increased natural-gas production estimates through 2035 by 7 percent, noting advances in drilling technology and other factors.

America Has World's Largest Natural Gas Supply

[Red bold emphasis added.]

7 aggressive stocks to buy before February — InvestorPlace

Liquefied natural gas (LNG) is America’s newest export commodity, and we have arguably the world’s largest supply of it. From the standpoint of getting LNG to foreign markets, Cheniere Partners has a virtual monopoly in its ownership of the Sabine Pass Terminal in southwestern Louisiana. The partnership has secured two major contracts for overseas distribution, and 2012 will only see more big deals come its way. Yield 8.3%.

Natural gas debate sparked over exports — TG Daily

A big debate has been brewing as of late since the US is a major producer of natural gas. In Europe and Asia, the going rate for liquefied natural gas is much higher than it is in the US.

[B]usinesses that purchase natural gas in the US are hoping to stop nine different US companies which have filed for federal approval to export approximately 10 billion cubic feet of liquefied natural gas per day - equivalent to 14% of the natural gas produced in the US in 2010 (estimated to be about 26.8 trillion cubic feet).

Unsurprisingly, gas companies claim new technology has facilitated a significant increase in gas production, leading to an excess national supply.

Abundance of natural gas promises to give Louisiana industries a boost — The Times-Picayune, New Orleans, LA

[W]hile natural gas prices at the Henry Hub fell about 9 percent, from $4.37 per million British thermal units in 2010 to $3.98 per million Btu's in 2011 -- and registered at $2.32 per million Btu's on Thursday, the lowest since 2002 -- the price of crude oil rose 10 percent.

Gas glut puts hole in BHP's forecasts (Jan 23) — The Australian

Since November 14, when BHP petroleum boss Michael Yeager fronted investors to explain $US20bn worth of acquisitions, an oversupply of US shale gas has sliced another 36 per cent off the already-depressed price of front-month US natural gas futures.

Not only have near-term prices slumped to a 10-year low of $US2.30 per thousand cubic feet ($US2.17 a gigajoule) but futures prices out to 2020, which Mr Yeager used in November to ease concerns, have fallen.

The fact that LNG exports are even being considered shows how quickly shale-gas technology has turned US gas markets on their head.

T&T’s LNG export to US drops — The Trinidad Guardian Newspaper, Port-of-Spain, Trinidad and Tobago, West Indies

Energy Minister Kevin Ramnarine says 81 per cent of local LNG exports have gone to markets other than the United Sates of America. A release said: “In 2005, approximately 89 per cent of our LNG exports went to the USA and the Henry Hub price at that time averaged US$8.64 per MMBtu. This situation has, however, been dramatically reversed and in 2011, only 19 per cent of our LNG exports went to the USA. The Henry Hub price averaged US$3.99 per MMBtu in 2011. It added: “ As of last week, Henry Hub prices have reached a low of US$2.70 per MMBtu as a result of a milder winter and high shale gas production. This, however, has minimal impact on T&T revenue from natural gas as 81 per cent of LNG exports now go to markets in South America, Europe and Asia.”

Webmaster's comment: The energy minister has indicated he expects LNG exports to the US to drop to zero.

Natgas Price Dipped to $2.283

[Red bold emphasis added.]

Natural gas prices reach dangerously low levels (Jan 20) — EnergeticCity.ca

The [price] decline has been developing for a few years now, since new drilling technologies came into play. Salkeld calls it a "double-edged sword", in that the new technologies, like fracking and directional drilling, that PSAC companies helped develop, have opened up production across North America. In addition, the U.S. is using the same technologies, taking away a customer, and creating a glut of natural gas on the continent.

Update 3-US natgas snaps eight-day losing streak after 10-yr low (Jan 20) — Reuters

Front-month gas futures prices on the New York Mercantile Exchange settled 2.1 cents higher on Friday at $2.343 per million British thermal units after slipping overnight to a new 10-year low of $2.283.

Concerns are growing that high storage could drive prices even lower late in the spring and summer stock building season if storage operators run out of room to stockpile gas and back more of it into an already oversupplied market.

[G]as production in 2012 is still expected to hit a record high for a second year.

USA: Golden Pass LNG plans re-exports (Jan 20) — LNG World News

GPLNG intends to receive foreign-sourced LNG at its terminal facility, store such volumes of LNG temporarily at its terminal, and then send it out of the terminal for export to foreign markets.

Freeport LNG submits additional LNG export applications to DOE (Jan 20) — LNG Law Blog

Freeport LNG has submitted two additional LNG export applications to the U.S. Department of Energy (DOE), seeking authorization to export up to 1.4 Bcf/d for a term of 25 years. The company has submitted two applications, one application for export of LNG to countries with which the United States has or develops a free trade agreement and another application for LNG exports to countries with which the United States does not have a free trade agreement. Freeport LNG expressly describes these applications as completely separate from the LNG export applications it has previously submitted to DOE.

DOE approves Cameron LNG export permit for FTA countries (Jan 20) — LNG Law Blog

The U.S. Department of Energy's (DOE) Office of Fossil Energy has approved an application by Cameron LNG, LLC to export LNG to countries with which the United States has entered free trade agreements (FTA), or countries with which the United States may enter free trade agreements in the future.

Cameron LNG receives liquefied-natural-gas export permit (Jan 20) — (Dow Jones Newswire) Fox Business

The permit allows Cameron, a wholly owned subsidiary of Sempra Energy (SRE), a California-based natural gas distribution and marketing company, to ship up to 1.7 billion cubic feet a day of LNG from its facility in Cameron Parish, La., to countries possessing free-trade agreements with the U.S. The permit was awarded on Jan. 17 and is good for 20 years after the first export shipment.

Natural gas futures were $2.39 Friday afternoon, nearly $2 lower year over year and down from nearly $14 in July 2008.

CLNG: EIA gas export study reveals only part of economic picture (USA) — LNG World News

The Office of Fossil Energy has also requested a second study from a third party contractor, which will analyze the macroeconomic effects of increased natural gas exports. The third party study is expected to be released later in the first quarter of 2012.

“With a 100 year supply of natural gas and more supplies being discovered in new resource areas, the United States is well positioned to meet both the domestic needs of our country and to provide clean burning natural gas to new markets. As the EIA study noted, the vast percentage of exports would be supplied by additional natural gas production. As history has taught us, the natural gas industry overwhelmingly responds to meet new markets, far beyond current-day predictions. [Brown bold emphasis added.]

Webmaster's comment: This opinion column by the Center for LNG is remarkable for at least two reasons:

1. Contradicting the author's attempt to pat his industry on the back for its "overwhelming response to meet new markets," the Center for LNG actually advocated for more LNG importing as late as 2011, but is now advocating LNG exporting; and
2. The Center for LNG unequivocally states that the US has a 100-year supply of natural gas — testimony that Downeast LNG is a futile project.

Study: LNG exports will increase prices (Jan 20) — UPI

"Larger export levels lead to larger domestic price increases, while rapid increases in export levels lead to large initial price increases that moderate somewhat in a few years," the report states.

Nine companies are awaiting federal approval to export about 10 billion cubic feet of LNG per day.

Webmaster's comment: There are now over twice the number of US LNG export projects than there were US LNG import terminals in 2006.

Column-U.S. should resist protectionism in gas: Kemp [Opinion] (Jan 20) — Reuters

[R]estricting gas exports to ensure a captive supply of cheap energy for U.S. chemical companies and other manufacturers would constitute a crude form of protectionism. It is not consistent with U.S. policies favouring free trade abroad and free markets at home.

Webmaster's comment: US energy security benefits US industry and consumers, protectionist or not. After all, it was the LNG industry that advocated LNG importing was needed for US energy security.

The US provides huge subsidies to the hydrocarbon industry, even when that industry is making mind-boggling profits. The US public deserves better.

Natgas Production Surges, Prices Drop to 10-Year Low

New Pipelines to Bring More Natgas to Northeast
EIA Report: LNG Exports Would Increase Price to Consurmers & Power Plants
Some Natgas Wellhead Prices in 2012 May Drop to $Zero!

[Red bold emphasis added.]

Effect of Increased Natural Gas Exports on Domestic Energy Markets as requested by the Office of Fossil Energy — U.S. Energy Information Administration

Increased natural gas exports lead to higher domestic natural gas prices, increased domestic natural gas production, reduced domestic natural gas consumption, and increased natural gas imports from Canada via pipeline.

Even while consuming less, on average, consumers [would] see an increase in their natural gas and electricity expenditures.

Webmaster's comment: Exporting LNG would increase natural gas prices in the US, and would be selling out future generations' natural gas resources.

USA: Williams Partners starts up Springville Pipeline — LNG World News

The Springville pipeline connects Williams Partners’ growing gathering system in northeast Pennsylvania with its Transco interstate gas pipeline, initially moving 300 million cubic feet per day (MMcf/d) of natural gas to the valuable Northeast markets. The project is a key component of the partnership’s strategy to provide Marcellus producers with reliable large-scale infrastructure and connect them to key markets.

Exports of LNG may raise U.S. prices as much as 54%, agency says — San Francisco Chronicle, San Francisco, CA

Exporting liquefied natural gas may increase U.S. prices for the fuel as much as 54 percent, the Energy Information Administration said in a report sought by the Energy Department for its review of export permits.

The findings support manufacturers who oppose sales overseas, saying their production costs would rise. Sempra Energy, owner of the Cameron gas terminal in Louisiana, Freeport LNG in partnership with Macquarie Group Ltd., and Dominion Resources Inc. are seeking permits to ship the fuel, as hydraulic fracturing boosts production.

In allowing more exports, the U.S. may be "trading away the enormous economic advantage of having large, low-cost domestic natural gas supply," Wyden said in an e-mailed statement on Jan. 6.

Natural gas for February delivery fell 1.6 cents to $2.472 per million British thermal units on the New York Mercantile Exchange, the lowest settlement since March 2002. Gas futures have tumbled 44 percent from a year ago.

Feds: Exporting natural gas will cause heating, electric bills to rise — FuelFix

Exporting some of the glut of natural gas in the United States market [would] cause large price increases for domestic consumers, including higher electricity bills, federal researchers said in a report released Thursday morning.

Businesses that purchase natural gas for industrial and residential use have rallied against exporting gas, arguing that it would cause prices to rise. Companies seeking to export the fossil fuel counter that the benefits – increased domestic production, more jobs, and revenue from the overseas sales — would outweigh a nominal domestic price increase.

Update 2-US natgas glut, mild temps drive prices to 10-year low — Reuters

U.S. natural gas futures ended down sharply on Thursday, their eighth straight session loss, with mild winter weather and record high storage and production driving prices to a10-year low.

Gas prices have mostly been weighed down for the past year or two by record or near record high gas production, primarily from shale.

While low prices should eventually discourage new output as producers shift spending from dry gas to more-profitable oil or gas-liquids prospects, gas production in 2012 is still expected to hit a record high for a second year.

Natural gas glut 2012 — The Market Oracle

Not since the late 1990s have natural gas prices been this low in the dead of winter. That includes the aftermath of the 2008 crash, when oil bottomed briefly under USD30 a barrel. US inventories of the clean fuel hit a record of 3.852 trillion cubic feet in November and remain at a record for December, 11.4 percent above year-earlier levels.

In short, demand for North American natural gas is on the rise and looks set to stay that way for years to come. Unfortunately for producers, rising usage--however impressive--is dwarfed by mushrooming supplies and production, made possible by the shale energy revolution.

USA: Sempra wins DOE approval for Cameron LNG export — LNG World News

The U.S. Department of Energy granted Sempra a long‐term authorization to export up to the equivalent of 1.7 Bcf/d of natural gas as LNG to FTA countries for 20 years from the proposed Cameron, Louisiana, LNG liquefaction plant.

Golden Pass LNG seeking authorization to re-export LNG — LNG Law Blog

Yesterday Golden Pass LNG requested an exemption from FERC's pre-filing procedures for the company's proposal to re-export LNG previously imported to the terminal.

Gulf Coast LNG owner banks on Department of Energy approvals (Jan 18) — Pittsburgh Tribune-Review, Pittsburgh, PA

Gulf Coast LNG Export LLC, which wants to send 2.8 billion cubic feet of liquefied natural gas a day overseas, disclosed that Michael S. Smith is a 97 percent owner and that its proposed export terminal would be located in Brownsville, Texas.

Smith is also founder and the current CEO of Freeport LNG Development, L.P., which also wants to export a total 2.8 billion cubic feet of liquefied natural gas per day from a Texas terminal. Smith was the founder and former chairman of Basin Exploration Co. He could not be reached for comment.

The two Freeport applications are among nine filed with the federal government that collectively would send about one fifth of American natural gas -- or a total of about 12.5 billion cubic feet a day -- to countries in Asia, Europe and elsewhere. That figure is based on current production levels and the current number of export applications, which could change.

Dominion Resources Inc. of Virginia has applied to export natural gas from a facility at Cove Point, Md. Gas to be exported from Cove Point would come from the Marcellus and other fields in or close to Pennsylvania.

Natural gas price forecast for 2012: Avoid the "Widow Maker" (Jan 18) — Stockhouse.com

While it's been a warmer than normal winter across the United States, especially in the Snow Belt, this price drop has more to do with U.S. production rising on a year-over-year basis than it does the weather.

[W]e could see individual basins with a short-term price of $0.00 per Mcf (1,000 cubic feet) this summer. That's no typo. The cost of natural gas in certain places could go to zero.

North America to become LNG exporter by 2030: BP (Jan 18) — Financial Post, Don Mills, ON

The report said that unconventional gas would account for 63% of North American gas production by 2030 and that North America could become a liquefied natural gas (LNG) exporter of around 5 bcf per day by 2030.

What to do with the natural gas glut (Jan 18) — Seeking Alpha

[D]emand for North American natural gas is on the rise and looks set to stay that way for years to come. Unfortunately for producers, rising usage -- however impressive -- is dwarfed by mushrooming supplies and production, made possible by the shale energy revolution.

Shale squeezing LNG overseas (Jan 17) — EnergyBiz

“If we export significant quantities of natural gas (in the form of LNG), we will become part of an international market in order for short-term profits to be made by the affected producers and exporters.” says Jim Collins, on behalf of the American Public Gas Association, in congressional testimony. “But long-term the effects [would] be predictable and disastrous: We will experience price increases and the price volatility of the past will return.”

Now there’s more domestically-available energy than ever before and at relatively cheap prices. In fact, the U.S. Energy Information says that shale gas production will comprise 57 percent of all natural gas development by 2030.

[O]ther nations are also trying to tap their shale gas reserves and if they are successful, those LNG businesses could again be forced to rethink their business strategy.

Reality Bodes Even Worse for Downeast LNG

250-Year Bonanza of Natural Gas to Meet Growing Demand
LNG-Import Tanker Rates Quintuple
Another Export Application is Filed With DOE

[Red bold emphasis added.]

Oil and gas services avoid geopolitical risk: John Stephenson — Jutia Group

[The Energy Report]: Weak natural gas prices are a result of increased shale gas production through fracking, which has created a significant oversupply in the last year or so. Is this going to continue, do you think?

[John Stephenson]: Yes, the U.S. has 200–250 years of reserves of shale gas at current production rates. I don’t see any reason at all for it to change unless, of course, the EPA or someone else were to rule that fracking was detrimental to the environment and there was a moratorium placed on drilling. That could be a black swan event and could change things. If things continue the way they are, there’s no doubt that prices will stay low. Now, clearly, there is some opportunity to export this, but that means building a liquefaction terminal, probably on the Gulf Coast or some other part of the country where people are willing to have a liquefaction facility. That would turn natural gas into a liquid to be transported to Asia or potentially to Europe, where the prices are much higher than they are in North America.

Freeport LNG’s Michael Smith launches second US LNG export project — ICIS Heren, London, UK

The newest North American LNG liquefaction scheme to file for regulatory export approval is being headed up by Freeport LNG CEO and developer Michael Smith, and seeks to send out 2.8 billion cubic feet (bcf)/day, or 79.3 million cubic metres (Mm3)/day, from Brownsville, Texas.

...The application from Gulf Coast LNG Export includes requests for trade to both free-trade and non-free-trade countries.

Gulf Coast LNG Export initially sent an application on 21 December to the DOE, but the federal agency deemed the application incomplete and returned it on 5 January.

Gulf Coast LNG Export's DOE application is now the single largest request to the DOE, although it matches Freeport LNG's export capacity target of 2.8bcf/day. Freeport LNG had originally aimed for 1.4bcf/day of LNG exports but doubled its intentions in a 12 January DOE filing.

Spectra expects to be involved in North American LNG exports — Bloomberg

Spectra Energy Corp. (SE) will have “some involvement” in what it estimates will be three to six facilities built to export North American natural gas, Chief Executive Officer Gregory Ebel said.

Spectra, based in Houston, owns pipelines that carry gas along the U.S. Gulf of Mexico and from fields in British Columbia, two areas where export terminals have been proposed, Ebel said in an interview at Bloomberg headquarters in New York today.

Shale gas changing the energy balance of power — OilPrice.com

The Baker Institute study dismisses the notion, recently debated in the U.S. media, that the shale gas revolution is a transitory occurrence. The study projects that U.S. shale production will more than quadruple by 2040 from 2010 levels of more than 10 billion cubic feet per day, reaching more than 50 percent of total U.S. natural gas production by the 2030s. The study incorporates independent scientific and economic literature on shale costs and resources, including assessments by organizations such as the U.S. Geological Survey, the Potential Gas Committee and scholarly peer-reviewed papers of the American Association of Petroleum Geologists.

Webmaster’s Comments: Reality bodes bad for Downeast LNG.

Opportunities of abundance: How shale gas changes the energy landscape (Jan 1) — (America's Natural Gas Alliance) Hydrocarbon Processing

Today’s reality is that the US has enough natural gas to meet growing demand, allowing the country to focus on domestic uses and export possibilities.

Today, the US has a growing supply of domestic natural gas that can power the country for generations to come. According to the EIA, the total natural gas resource base sits at 2,543 trillion cubic feet (Tcf), powered by new discoveries across the US. These discoveries have fundamentally transformed the long-term supply outlook. Shale gas production makes up more than 20% of US supply, an increase from 1% in 2000, and energy analysts at ICF International predict that, in about 25 years, this figure will grow to around 65% of total supply. In short, shale gas supplies that were initially described as an “unconventional” resource will become conventional in the near future.

The increases in North American natural gas resources and production have brought new stability to gas markets. In fact, record production and low prices were sustained right through the worst economic downturn since the Great Depression. The US reached record levels of annual gross natural gas production in each of the years from 2008 through 2010.

It is clear that the energy dynamic in the US has changed over the last few years. Importing natural gas was an accepted truth, but today’s reality is that the US has enough natural gas to meet growing demand, allowing the country to focus on domestic uses and export possibilities.

LNG long-term tanker rates hit record high — Reuters

Spot rates more than five times mid-2010 level

Liquefied natural gas (LNG) spot tanker rates have climbed to $150,000 per day this month as growing import needs from consumers in Asia and South America reduce numbers of available vessels, brokers said.

"Short-term freight rates in December 2011 averaged at $125,000/day, up from $68,000/day averaged in December 2010," he said in a note via email.

EIA forecasts oil, gas demand increases through 2013 (Jan 10) — Oil & Gas Journal

A small amount of LNG will continue to arrive at US terminals in 2012 and 2013 either to take advantage of temporarily high local prices due to cold snaps and disruptions or to fulfill long-term contract obligations, EIA said.

Natural gas export debate grows — San Francisco Chronicle, San Francisco, CA

Debate is brewing over whether to keep the nation's glut of natural gas at home for cheap energy or export it at five times the price, possibly creating jobs and boosting the domestic economy.

Nine companies have sought federal approval to export about 10 billion cubic feet of liquefied natural gas per day, which would boost prices for U.S. customers.

Natural gas futures closed at $2.67 per million British thermal units in trading Friday on the New York Mercantile Exchange. The price was more than $15 in 2005.

Webmaster’s Comments: Natural gas prices are extremely low, and may drop even farther. Exactly how would Downeast LNG's expensive gas from overseas (with skyrocketing shipping costs) reduce the cost of natural gas?

Should the US export LNG at the risk of increased domestic gas prices? (Jan 16) — OilPrice.com

The fall in natural gas prices due to shale gas development has meant US gas prices are below world prices, both a major boon for energy-dependent industries in the US and an opportunity for gas producers to develop overseas export markets for Liquefied Natural Gas (LNG).

The US Department of Energy has received at least eight applications for the development of export LNG facilities, which combined have sought permission to ship 10.9 billion cubic feet per day to markets worldwide; that’s about 18 percent of US gas production.

Supporters of LNG exports say the US has sufficient reserves (if all shale gas resources are exploited) to last for a hundred years at current rates of consumption. Others would say, what better gift to bequeath future generations than a low-carbon, low-cost, low-pollution energy resource?

Webmaster’s Comments: Obviously, renewable energy produces no pollution — an even better gift to future generations.

US Natgas 2012 Production to Top 2011 Record High

LNG Imports Barely Keeping Terminals Operational

LNG Imports to Drop Another 26% This Year
"We have so much natural gas coming up that we don't know what to do with it."

[Red bold emphasis added.]

Simmons & Co.: US 2011 gas imports off; Japan to pull global LNG (Jan 13) — Oil & Gas Journal

Preliminary data for 2011 have prompted Simmons & Co., Houston, to forecast US natural gas imports for the year will [have dropped] by 7% over 2010, a decline driven by fewer Canadian import and LNG cargoes.

The company has forecast US LNG imports for 2011 at 1 bcfd, which it says is about the “bare minimum” to keep the country’s regasification terminals operational.

In the US, re-exports of LNG reduced natural gas supply into the US. From January to October 2011, US LNG re-exports were up 56% year over year. But that is related to an absolute figure of only about 300 MMcfd, the report said.

USA: Freeport to re-export LNG cargo — LNG World News

The cargo will be shipped by the Golar Grand, a 145,700 m3 tanker, which is due to arrive at Freeport terminal on January 23, according to shipping data.

Freeport LNG is proposing to add liquefaction infrastructure at the existing terminal to provide export capacity of approximately 13.2 million metric tonnes per annum of LNG, which equates to processing approximately 1.8 Bcf/d of pipeline-quality natural gas.

Should the US export LNG at the risk of increased domestic gas prices? — Oil Price

The fall in natural gas prices due to shale gas development has meant US gas prices are below world prices, both a major boon for energy-dependent industries in the US and an opportunity for gas producers to develop overseas export markets for Liquefied Natural Gas (LNG).

The US Department of Energy has received at least eight applications for the development of export LNG facilities, which combined have sought permission to ship 10.9 billion cubic feet per day to markets worldwide; that’s about 18 percent of US gas production.

Clearly by the time these plants are all fully operational – assuming permission is granted – shale gas supplies are projected to have increased further, but it does appear that at 18 percent of total US gas production, exports would deprive the domestic market of much of the additional supply shale gas has currently created.

Supporters of LNG exports say the US has sufficient reserves (if all shale gas resources are exploited) to last for a hundred years at current rates of consumption. Others would say, what better gift to bequeath future generations than a low-carbon, low-cost, low-pollution energy resource?

GAIL in talks to buy LNG from Macquarie's US plant — Reuters

Industry source says 20 yr deal for 2 mln T/yr will be soon signed

Freeport LNG and Macquarie Energy, the North American energy marketing and trading arm of Macquarie Group, are developing an export plant in Texas costing about $2 billion. The plant would be able to export 1.4 billion cubic feet per day of gas by 2015.

Buying gas from the United States is about $2 per million British thermal units cheaper than that from India's other long term LNG purchase contracts, he said without elaborating.

Once expected to be a major importer, the United States now has up to a century's worth of supply, prompting plans to ship the cheap fuel to thirsty markets in Europe and Asia where prices are up to five times higher.

US industry hits at LNG export plan (Jan 10) — Financial Times

The first LNG export project in the US, the Sabine Pass plant in Louisiana, owned by Cheniere Energy, won approval from the US Department of Energy last year. Seven more have submitted applications.

EIA: Natgas production still on rise (Jan 10) — Upstream Online

US natural gas production will hit a record-high level this year, though at a slightly lower level than originally anticipated, the US Energy Information Administration said on Tuesday.

The gain last year, the largest year-over-year increase in history, easily eclipsed the previous record of 62.05 bcfd hit in 1973, the [Energy Information Administration] news wire said.

The EIA expects LNG imports in 2012 to drop about 26 percent to 0.69 bcfd, unchanged from its December outlook, as higher prices in Europe and Asia steer cargoes away from U.S. shores.

Chance for Qatar in US gas glut (Jan 11) — The National, Abu Dhabi, United Arab Emirates

Qatar Petroleum (QP) could reconfigure its US import terminal to export gas in a bid to cash in on the US supply glut arising from the shale gas revolution, says one of Qatar's prime ministers.

The multibillion-dollar [Golden Pass LNG] facility [in Texas] was procured before the US began producing abundant quantities of natural gas from hydraulic fracturing - or "fracking" - a process used to unlock the gas in shale rock.

"It's not very attractive to sell gas into the US market," Mr Al Attiyah said.

Webmaster’s Comments: This article implies that Qatar selling LNG to Canaportdoes not appear to be profitable for Qatar. CBC News recently reported that Canaport LNG's increased output to 30%, due to imports from Qatar, is unsustainable.

Evaluating the prospects for increased exports of liquefied natural gas from the United States (January 2012) — Brookings Institution

Owing to breakthroughs in drilling and production technology over the past five years, the United States finds itself facing a long period of abundant, low-cost natural gas supplies. As the U.S. economy reorients itself to take advantage of greater use of natural gas, there is interest on the part of the public and private sector in the prospect of significant exports of U.S. natural gas in the form of liquefied natural gas (LNG).

To be economically feasible, U.S. LNG exports will have to be competitive with those from other suppliers in global markets. While the differential between current domestic U.S. natural gas prices and those in target markets in the Atlantic and Pacific basins presents an attractive economic rationale for exports, several factors have the potential to change the global natural gas landscape, including policy decisions in LNG-importing nations; the rate of capacity growth among competing LNG exporters, and the rate of development of unconventional gas resources overseas. The extent to which U.S. exports themselves affect the cost of domestic gas and the costs of other aspects of the LNG supply chain such as liquefaction equipment and transportation costs will also have a bearing on the feasibility of U.S. LNG exports.

Natural gas glut fuels export debate (Jan 13) — Houston Chronicle, Houston, TX

Nine companies have sought federal approval to export about 10 billion cubic feet of liquefied natural gas per day, which would boost prices for U.S. customers.

Natural gas futures closed at $2.67 per million British thermal units in trading Friday on the New York Mercantile Exchange. The price was more than $15 in 2005.

"We have so much natural gas coming up that we don't know what to do with it," said Andrew Ware, spokesman for Houston-based Cheniere Energy.

Natural Gas Price Plunges 35% on Glut

Price at 10-Year Winter Low & Likely to Continue to Fall During 2012
Most LNG Import Terminals Remain Idle White Elephants

[Red bold emphasis added.]

Natural gas price plunge aids families, businesses — (AP) Google

NEW YORK (AP) — The price of natural gas is plummeting at a pace that has caught even the experts off guard.

The country is flush with natural gas as a result of new drilling techniques that have enabled energy companies to tap vast supplies that were out of reach not so long ago. The country's natural gas surplus has been growing even as the country burns record amounts.

The natural gas futures price fell 13 percent last week, to $2.67 per 1,000 cubic feet. That's the lowest winter-time level in a decade.

"The market has been overwhelmed with gas," says Anthony Yuen, a commodities analyst at Citibank.

Still, drillers aren't reducing natural gas production as much as they would have during previous periods of low prices. They've found ways to produce the fuel at much lower cost so they can be profitable at much lower prices. And, in many cases, natural gas is a byproduct of oil drilling, which is so profitable that companies are going after every barrel they can find.

Analysts say in some oil and gas fields, drillers could give the gas away and still be hugely profitable just from selling the oil.

What do falling natural gas prices mean for renewables? (Jan 13) — Renewable Energy World

WASHINGTON, D.C. -- With a glut of shale gas on the market, natural gas prices continue to tumble in the U.S. And they'll only fall more throughout the year.

We should also always remember that some of the leading (center-right) economists in the country — Nicholas Z. Muller, Robert Mendelsohn, and William Nordhaus — publishing in a top economics journal found that natural gas damages were larger than its value added for electricity generation even at a low-ball carbon price of $27 per ton. At a price of $65 a ton of carbon, the total damages from natural gas are more than double its value-added.

[I]t does say a lot that renewable energy technologies continue to nip at the heels of natural gas, even with a “revolution” underway in shale gas production.

Open new markets for natural gas (Jan 14) — (The Motley Fool) The Advertiser, Lafayette, LA

Cheniere has already received federal approval to export LNG and has an $8 billion, 20-year deal with Britain's BG Group to export 3.5 million tons per year. More applications for liquefaction-and-export operations around the country are awaiting a federal study on the potential impacts, including the impact on [national] security. The results of the study are due in this winter. To be realistic, those calculations must take into account the health of an industry vital not just to Acadiana's economy, but to the nation's well-being.

For most of this decade, according to statistics from the U.S. Energy Information Administration, the wellhead price of U.S. natural gas and the export price tracked each other fairly closely. Then came big changes: The huge inland plays like the Haynesville shale went into production — Louisiana's natural gas production doubled in two years — at roughly the same time the world economy was taking a nosedive. Natural gas lost two-thirds of its value in nine months. Along the way, the wellhead price and the export price began to diverge. While the U.S. price has dropped below $2.80 per thousand cubic feet recently, the export price has been at least double that, and is sometimes closer to quadruple the wellhead price.

USA: Sabine Pass re-exports LNG cargo (Jan 13) — LNG World News

The U.S. Sabine Pass liquefied natural gas terminal re-exported a LNG cargo [on Jan 8], according to shipping data.

According to shipping data, the cargo is due to arrive at Port Said in Egypt on Jan. 23.

Macquarie vies to sell U.S. LNG to India (Jan 16) — The Wall Street Journal - Australia

Indian energy company GAIL expects to sign a deal within a month with Macquarie Energy to buy 2 million tons of liquefied natural gas annually for 20 years from the Freeport LNG project in the U.S.

Macquarie Group’s North American energy marketing and trading arm, Macquarie Energy, and Freeport LNG Expansion LP, are jointly developing and marketing liquefaction capacity at the LNG terminal in Freeport, Texas.

The U.S. shale-oil and natural-gas boom has transformed the gas market, made the country a net exporter, depressed gas prices and has prompted several players to set up LNG export operations with an eye on rapidly-expanding Asian markets.

Last month, the head of global gas at UK-based energy consultancy Wood Mackenzie said the U.S. could emerge as a major competitor to Australia’s burgeoning gas-export market, challenging the viability or expansion plans of close to a dozen Australian liquefied natural gas projects.

India to focus on cheaper LNG from U.S. (Jan 11) — The Hindu, India

India has decided to make a “strategic shift” in LNG (liquefied natural gas) sourcing with a “look U.S. policy” for contracting new import volumes. This follows an analysis by the Petroleum Ministry which showed that LNG imports from the [Persian Gulf] were costlier than from the U.S.

According to the minutes of the meeting held in December 2011 accessed by The Hindu, it was pointed out that the price of LNG based on Henry Hub (HH) from U.S. market was cheaper by $2-3 mBtu (million British thermal unit) compared to that based on oil index (Brent/JCC) from other sources. “Considering the attractiveness of sourcing LNG from U.S. market, the Committee advised the concerned companies to execute long-term deals with Sabine Pass Liquefaction LLC and Macquarie Energy.

Column -Exports to bring no relief for US gas producers: Kemp (Jan 11) — Reuters

U.S. gas producers hoping exports will bring some relief from intense downward pressure on U.S. gas prices look set to be disappointed.

As the shale revolution goes global, intense gas-on-gas competition will keep prices under pressure. If there is a window for major U.S. exports, it is likely to prove fairly short. The International Energy Agency's "golden age of gas" will bring benefits for consumers but is set to prove anything but golden for producers and exporters.

The past five years have seen a remarkable turnaround in the U.S. oil and gas market. As recently as 2005, the country was racing to construct liquid natural gas (LNG) receiving terminals to cope with an expected shortfall in domestic supplies.

However, the spread of hydraulic fracturing and horizontal drilling has doubled the country's gas resources, which could now supply more than 100 years of demand at today's consumption rate, according to a recent study by the National Petroleum Council.

For gas, most of the country's LNG receiving terminals are now idle. Gas producers are instead applying for permission to construct and begin exporting from a network of new liquefaction plants.

By the time new LNG receiving terminals had been built in the late 2000s, the transformation of the North American gas market left them stranded as white elephants. Promoters of the new LNG exporting terminals must be careful not to share the same fate when they come into service in 2015 and beyond.

Grim Time for LNG Import Terminals

[Red bold emphasis added.]

2011 Grim Year for North American LNG Industry (Jan 6) — CBC News, CA

The following link leads to a news video. The LNG story begins at the 8:40 time mark.

Most LNG terminals were idle last year.

[W]ith American natural gas prices sitting at $3.00 a unit, the [LNG import] future does not look rosy.

Investors are now looking for ways to export cheap American gas overseas.

One Houston-based analyst said yesterday the Quataris are dumping gas in Saint John. But, with low prices here and high prices on offer elsewhere in the world, she doubts the arrangement can continue much longer.

Webmaster’s Comments: Canaport LNG is having a difficult time, and it is about to get worse. The ill-conceived Downeast LNG proposal is no more than an enormous money pit.

Drillers must employ best practices to keep 'fracking' boom alive [Opinion column] (Jan 7) — Houston Chronicle, Houston, TX

Today, almost overnight in natural-resource years, we are not only self-sufficient in natural gas, we have enough natural gas for the rest of this century on the basis of current demand. This same horizontal drilling and hydraulic fracturing technology is now being used in liquids-rich shales to increase oil production. These resource plays are in their infancy and can clearly improve the energy security of the United States.

Another LNG Import Project Bites the Dust

[Red bold emphasis added.]

Company pulls out of LNG project (Jan 6) — The News Journal, DE

N.J. terminal seen as unprofitable

In a letter to the Federal Energy Regulatory Commission, made public Friday, Crown Landing said "significant" increases in shale gas production in North America had lowered domestic prices. High international prices meanwhile "make it unlikely the company can secure supplies of LNG on economic terms attractive enough to ensure sustained profitability of the project" as an import-only terminal.

Webmaster’s Comments: LNG import projects have dropped like flies — even Crown Landing that already had a FERC permit — providing what amounts to "evidence overkill" against Downeast LNG viability. Downeast LNG, Kestrel Energy Partners, and Yorktown Energy Partners must be the laughing stock of the energy investment industry.

BP, ConocoPhillips, Exxon in talks over Alaska gas export plan (Jan 5) — Huffington Post

North American producers and LNG shippers are scrambling to develop export plans after a sudden surge in domestic natural gas production, thanks to shale gas, that swamped the market and pushed gas prices way below global levels.

Once expected to be a major importer, the United States now has up to a century's worth of supply, prompting plans to ship the cheap fuel to thirsty markets in Europe and Asia where prices are up to five times higher.

Canaport Headed for Hard Times

Top 2011 US Export Was Fuel
Another LNG Export Project Jumps Into the Queue

[Red bold emphasis added.]

Canaport LNG terminal bucks trend — CBC News, NB

Increased output won't continue, experts say

[T]he plant, owned by Repsol and Irving Oil Ltd., is only operating at about 30 per cent of its capacity, according to the National Energy Board.

Although that's better than most LNG plants in North America, some of which are operating at about five per cent capacity, industry analyst Barbara Shook predicts even that won't last.

"No one dreamed that this shale revolution, the shale gale would just blow through the continent like it has."

Edward Kallio, the director of gas consulting for the Ziff Energy Group in Calgary, said Repsol is storing the gas and then playing the spot market.

But Kallio doubts that will continue, given the growing supply in the U.S. "And you’ve got more flowing pipeline gas, therefore you need less peaking gas when you get a cold snap," he said.

Webmaster’s Comments: Downeast LNG lives in an alternate reality — after all, they even claimed St. Andrews, NB, residents would not see the LNG ship when the LNG ship is not in port or when there is fog. Downeast LNG's proposal has no probability for success, as evidenced by the entire North American LNG/natural gas market.

3 huge energy myths and how you can profit — DailyFinance

Myth No. 2 -- U.S. domestic oil and gas production continues to dwindle

[D]omestic natural gas production continues to grow, too. In shales across the U.S., formerly inaccessible natural gas can now be drilled economically. According to the EIA, shale gas production has moved up incredibly, growing 47% in 2009, and shale gas reserves skyrocketed 76%. Chesapeake and SandRidge are involved here, as well.

Myth No. 3 -- The U.S. does not export energy because of a lack of energy resources

[F]for the first time ever, in 2011, America's top export was fuel.

America's cheap and plentiful natural gas has also given well-positioned companies the ability to export. Cheniere Energy and subsidiary Cheniere Energy Partners are planning a liquefied natural gas export facility on the Gulf of Mexico to begin operation in 2015, although they're still working through how to finance it. But the parent company has already signed multiyear export deals.

US LNG export requests show no signs of slowing down — ICIS Heren, London, England, UK

The US Department of Energy (DOE) has received the largest LNG export request yet from a venture called Gulf Coast LNG Export, asking to send out 2.8 billion cubic feet (bcf)/day of exports, or about 20 million tonnes per annum (mtpa). Details of the plan have yet to emerge and the identity of the company behind the request is unknown as lawmakers' anxiety on LNG exports increases.

Industrial expansions to start, conclude in 2012 (Jan 2) — Beaumont Enterprise, Beaumont, TX

Houston-based Cheniere said construction would begin in 2012 with export beginning in 2015....

The terminal in Cameron Parish originally was built to import LNG when natural gas supplies were not as plentiful domestically. The appeal of exporting gas has come with vastly larger supplies due to shale gas development and lower domestic prices for the commodity, the company said.

Ample supply of U.S. natural gas spurs debate about exports [Opinion] (Jan 5) — Star-Telegram, Fort Worth, TX

xGas prices are stuck at around $3 per million British thermal units, down from $13 per million Btu in 2008. Advances in horizontal drilling technology pioneered during the past decade in the Barnett Shale have led to discoveries of large shale gas fields in several other parts of the country, sending supplies up and, by simple laws of economics, prices down.

We're gas producers in the Barnett Shale, so we tend to believe that higher gas prices would benefit our area. But if we look at ourselves instead as consumers, don't we want low prices? After all, wasn't one of the benefits of expanded natural gas drilling supposed to be to supply us with cleaner energy at a lower price?

Natural Gas Supplies at Record High

17 LNG Cargoes Re-Exported Jan–Nov; US Liquefaction & Export Progresses

[Red bold emphasis added.]

USA: Seventeen LNG cargoes re-exported in Jan-Nov — LNG World News

The U.S. re-exported 17 LNG cargoes or 1,030,939 mt (megatonnes) in January-November period, according to U.S. DOE.

There are currently three U.S. LNG terminals that have been granted Federal approval to re-export LNG: Freeport in Texas, Sabine Pass and Cameron in Louisiana.

Webmaster’s Comments: The glut of domestic natural gas is so great there are currently several applications to export US-produced LNG.

Natural gas supply at a high (Dec 31) — The News Star, Monroe, LA

NEW ORLEANS — The United States has record supplies of natural gas and plenty of reasons to promote natural-gas powered cars, but consumers, manufacturers and fuel suppliers haven't shown much interest.

Long-term perspective on crude oil and natural gas markets — Seeking Alpha

North and South America are largely self-sufficient in natural gas. The LNG sector in North America started to gain traction several years ago, but the shale gas revolution changed the economics and now most gasification plants under planning have been cancelled while those in operation are underutilized.

Webmaster’s Comments: Downeast LNG wants to build yet another idle LNG import terminal — even though the region LNG import infrastructure is already more than 200% over capacity, the US has 27 times more import capacity than will be used, existing LNG import terminals are turning to constructing LNG export capability, and the US has 100-years' worth of domestic natural gas supply.

FERC staff clears Sabine Pass LNG export project in review (Jan 4) — Downstream Today

The first proposed LNG export project to advance into the FERC process received a satisfactory mark in an environmental assessment, or EA, by commission staff and drew closer to a final certificate order.

The proposed liquefaction facilities would be built within the existing 853-acre industrial site of the existing Sabine Pass LNG import terminal in Cameron Parish, La., and there would be no changes in marine systems or the expected number of vessels, so the project was not expected to have trouble in the EA. The staff also noted the project could provide economic benefits to the local area during construction and to the region and country during operation. The recommendation of the staff clears the way for a decision on the project by the full commission, which does not use market analysis for LNG projects as it does with other gas projects.

Freeport LNG files for more exports (Jan 4) — Downstream Today

Freeport LNG Expansion LP and FLNG Liquefaction LLC filed another application with DOE to allow the export of an additional amount of domestically produced LNG from its Quintana Island Terminal near Freeport, Texas.

"Demand for liquefaction capacity has been significant since FLEX filed its initial export applications a year ago, and FLEX expects to secure long-term contracts for the liquefaction and export of an additional 1.4 Bcf/d," the Freeport LNG Development LP companies, which together call themselves FLEX, wrote in the Dec. 19 application (FE Docket No. 11-161-LNG).

Will nat gas rebound this year? [Blog] — Zack's

It wasn’t long ago that the nation was facing a real natural gas supply shortage, which sent prices on a tear. It is almost impossible to imagine that things once looked so miserable on the U.S. natural gas supply front that plans were made to invest money in liquefied natural gas (LNG) import terminals to bring in natural gas from overseas....

But then something happened....

So while most commodities have at least doubled in price over the last 3–5 years, natural gas prices ... are currently trading at their lowest level in more than two years.

What’s surprising is that even the recent, steady fall in the natural gas rig count has failed to stem the rise in natural gas production.

Looking ahead, EIA expects average total production to rise ... to an all-time high....

Webmaster’s Comments: Downeast LNG would rather dream of pre-2006 when it seemed like LNG imports were actually needed — even though three other regional LNG import projects that would satisfy demand were already years ahead of them (and are now operational, but at only a fraction of their capacity due to lack of need). The rest of the US LNG and natural gas industry recognize that to build more LNG import capability would be folly.

Downeast LNG and backers Kestrel Energy Partners and York Town Energy Partners don't let facts get in the way of their fantasy.

U.S. eyes supply-side economics of natural gas (Jan 3) — The Globe and Mail, Toronto, ON

Uncle Sam may soon be sharing his bounty of natural gas with the world. If planned liquefied natural gas projects happen, the United States could end up exporting up to a fifth of its gas. That’s enough to shift the balance of energy power elsewhere in the world.

For the motivation to export gas, look no further than the domestic U.S. price of the fuel. On Dec. 30, it fell below $3 (U.S.) per million British thermal units for the first time in two years. Gas typically sells for almost five times that in Asia and nearly three times as much in Europe. Infrastructure firms, such as Cheniere Energy Inc., want to convert idle U.S. plants, once intended to import LNG, into export hubs. So far, six [sic; seven applications actually exist in addition to one already approved] projects are awaiting U.S. Department of Energy approval.

Low Canadian gas prices continue due to over-supply and lack of market — Morning Post Exchange, Waterloo, ON

"We are entering a period where Canada needs to start focusing on markets outside North America in order to take advantage of the higher international prices," added Glass. "Offshore North American economies are where we can anticipate significant growth to occur, as it is likely both Canada and the United States see flat and possibly declining crude oil consumption. In spite of the natural gas over-supply, LNG exports from both countries offer more viable prospects."

Markey warns Chu on gas export plans (Jan 4) — The Hill, Washington, DC

Rep. Edward Markey (D-Mass.) wrote to Energy Secretary Steven Chu Wednesday asking for a number of details about the consequences of seven pending applications to export liquefied natural gas and DOE's review process.

One export plan DOE recently approved and the seven pending could equal 18 percent of U.S. gas consumption, according to the letter, which cites data that DOE provided to Markey’s committee staff.

Lawmaker questions merits of natural gas exports (Jan 4) — Reuters

The Energy Department is studying the impact of exports of bountiful U.S. natural gas on energy prices and jobs in two reports slated for completion in the first quarter of this year.

"I am worried that exporting America's natural gas would raise energy costs for American consumers, reduce the global competitiveness of U.S. businesses, make us more dependent on foreign sources of energy, and slow our transition away from dirtier fuels," said Markey, the top Democrat on the House of Representatives' Natural Resources Committee, in a letter to Chu on Wednesday.

Should the U.S. export its natural gas? A debate flares. (Jan 4) — The Washington Post, Washington, DC

On the surface, there’s an alluring logic in exporting natural gas. The United States has been flooded with cheap gas thanks to its newly exploitable (and potentially large) shale resources. And gas prices are higher in many other countries. So why not ramp up exports, turn a profit, and reap the gains from trade? That explains why various producers are asking the Energy Department to green-light new export facilities, such as Cheniere Energy’s just-okayed Sabine Pass Liquefaction terminal in Cameron Parish, La., which will ship out two billion cubic feet of gas per day by 2015. Seven more projects are awaiting approval.

Meanwhile, Michael Muro of Brookings emphasizes the potential risks of gas exports to America’s domestic industries. Cheap natural gas prices in the decades ahead have the potential to help the United States attract and promote industrial concerns like chemicals, fertilizers, metals, paper, glass and food products. “It would be premature,” Muro says, “for DOE to conclude the United States now has so much gas that it can afford to export it overseas without risking domestic price dislocations.”

Webmaster’s Comments: Downeast LNG would like to increase the cost of natural gas by importing expensive overseas LNG.

Natural Gas Drops Below $3.00/mmBtu
— Around 35% the 2005 Price

...but Downeast LNG Continues to Falsely Claim that Natural Gas Prices are Steadily Rising
(see http://www.downeastlng.com/northamerica.php, paragraph 4)

[Red bold emphasis added.]

Natural gas price plunge puts heat on producers (Dec 29) — Reuters

Spot natural gas futures dipped below $3.00 per million British Thermal units on Friday, the lowest level in more than two years, as a glut of gas from shale fields across the United States pushed inventory levels to historic highs.

Webmaster’s Comments: Downeast LNG claims that their imported LNG would reduce the price of natural gas and that natural gas prices are steadily rising. Evidence proves otherwise on both counts. Just look at the price comparisons below, provided by the US Energy Information Administration.