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Passamaquoddy Bay & LNG

Maine

New England governors start push to cut cost of power (Jan 23)— Portland Press Herald, Portland, ME

Their first-of-its-kind plan calls for projects to expand transmission lines and gas pipeline capacity in the region by 20% in three years.

The six New England governors have set in motion a first-of-its-kind plan to increase the region’s natural-gas pipeline capacity by nearly 20 percent in three years and build at least one major electric transmission line to bring renewable energy from Canada.

Utility customers would be asked to help pay for the projects, which together could cost billions of dollars, through electricity rates. But the costs soon would be recovered by savings on energy bills as the projects increase supplies of lower-cost power, said Tom Welch, chairman of the Maine Public Utilities Commission and an architect of the plan.

Not articulated in the letter, but underlying the greater political cooperation, is a geographic frustration. To the north, Quebec, Newfoundland and Labrador hold vast hydroelectric resources. To the south lie economical deposits of shale gas.

“We are so close to two world-class resources, but unfortunately, New England ratepayers aren’t benefiting from that position,” said Patrick Woodcock, LePage’s energy director.

The governors also want ratepayers to fund the cost of new gas pipeline capacity, with gas delivered at prices that are on par with a low, national benchmark. Wholesale gas prices in New England now are about five times as much as those in some southern states.

Although no specific transmission line project is identified in the plan, Welch said three likely options exist: further expansion of Spectra Energy’s Algonquin Incremental Market project, which connects New York with a hub north of Boston; a new line across northern Massachusetts being considered by Houston-based Kinder Morgan Inc.; and an expansion of the Portland Natural Gas Transmission System through western Maine from Quebec. [Red, yellow & bold emphasis added.]

Webmaster's comment: All of New England is now working against Downeast LNG's purpose. Will Dean Girdis heed the hint, and pack it in?

A lot of gas, but not here: How should New England deal with its natural gas appetite? — Bangor Daily News, Bangor, ME

The agreement among the six New England governors to invest as a region in new natural gas pipeline capacity and electric transmission is rooted in part in cold days like many that Maine and the rest of New England have experienced so far this winter.

Under the preliminary energy agreement, ISO New England, which operates the New England electric grid, would purchase 600 million cubic feet in new natural gas pipeline capacity and request proposals for new transmission lines that would likely transport renewable energy — such as Maine wind — to the more populous states demanding it.

The idea behind New England’s regional purchase of new gas pipeline capacity is to ensure the construction of new pipeline that can make more cheaply priced gas readily available to the region’s electric generators.

Regional energy officials say they also want to chip away — if not eliminate — the gas price difference between New England and Louisiana’s Henry Hub. That price disparity is called the basis differential.

“From Maine’s perspective, it’s good to get our prices looking like what prices look like elsewhere in the country,” said Tom Welch, chairman of the Maine Public Utilities Commission.

With their pipeline capacity purchase, the New England states would be looking to build on the added capacity from one pipeline expansion project, Spectra’s Algonquin Incremental Market project, that’s already pending for the region. That project, which is slated to be completed in November 2016, would add capacity to an existing pipeline that runs from New Jersey to the Boston area.

“Right now, the pipelines are absolutely running flat-out,” said Welch. “What we want to see is a situation where, even in the winter, they have excess capacity on them.” [Red, yellow & bold emphasis added.]

Webmaster's comment: Let's all chip in for a moving van to ship Downeast LNG's office furniture back to Dean Girdis's house in Washington, D.C.

Northeast

Cove Point project opponents raise safety concerns — The Baltimore Sun, Baltimore, MD

[T]he project at Cove Point — expected to cost as much as $3.8 billion for the equipment that's not already there — strikes opponents as a sea change. Now those fighting the proposal on environmental grounds are joining forces with some Calvert County residents worried about hazards from the liquefied natural gas or LNG, which in rare occasions has caused deadly fires or explosions.

"They're fast-tracking this," said [environmental group Chesapeake Climate Action Network executive director Mike Tidwell], who expects hundreds of people at a Baltimore rally against the expansion next month. "Is this happening so fast that there's some major safety risk that has not been thought through?"

Cove Point opponents point to a more recent explosion at an Algerian liquefaction facility, which killed 27 workers in 2004. Opponents also note that a natural gas processing and fractionation plant in West Virginia — a different type of facility, but newly opened by Dominion in a joint venture — suffered an explosion and fire in September.

"They were … telling the community this was going to be a world-class, highly reliable facility, and then two months after they turned it on, it blew up," Tidwell said.

James Fay, a professor emeritus of mechanical engineering at the Massachusetts Institute of Technology … says an LNG export facility has the potential to be much more dangerous. Propane is often used as a refrigerant in the liquefaction process, he said, and propane can catch fire.

Cove Point's existing storage tanks, including three added by Dominion after it bought the facility in 2002, would be used for the export business. That's another point of contention, because the tanks are single containment, without the extra layer of protection in double- and full-containment models. [Red & bold emphasis added.]

Dominion updates project outreach efforts [Press release] (Jan 23) — Baynet.com, MD

Dominion Cove Point’s Vice President of LNG operations, Mike Frederick, said he is pleased to be able to participate in the Calvert County League of Women Voters’ Jan. 28 panel discussion on the Cove Point export project.

More than 24,000 fact books also are arriving in local mailboxes as part of a community outreach program. Included with the 20-page fact book is a postage-paid reply card to help resolve remaining questions. Feedback has been positive. People enjoy receiving information in a calm, non-confrontational manner.

Dominion also has begun running informational advertising involving a wide range of Maryland print, broadcast and electronic media.

Webmaster's comment: Unfortunately, as in Save Passamaquoddy Bay's experience with Quoddy Bay LNG, Calais LNG, and Downeast LNG, liquefied natural gas terminal applicants can mislead — and lie to — the public with impunity. FERC ignores such misdeeds. Thus, as the three Passamaquoddy Bay developers have done, LNG terminal applicants can falsely garner public support, and then use that wrongfully-gained support to fuel their applications with FERC.

British Columbia

That sucking sound you hear? Oregon LNG proposals (Jan 23) — The Vancouver Sun, Vancouver, BC

[This same article appears under the Oregon heading, below.]

Energy: Two terminal plans south of border would tap into B.C., Alberta gas

While the B.C. Liberal government entertains high hopes for multiple liquefied natural gas terminals on the B.C. coast, two rival proposals would tap the provincial resource to feed multi-billion-dollar LNG terminals in Oregon.

One of the two, Oregon LNG Marketing Co. last week filed an application with Canada's National Energy Board for permission to export 1.3 billion cubic feet of gas per day for 25 years.

The application follows one filed last September with the NEB by Jordan Cove LNG, seeking permission to export 1.55 billion cubic feet of gas a day, also for 25 years, to feed a proposed $7.5-billion terminal near Coos Bay.

As a measure of the transformation in the North American gas markets in recent years, both of the Oregon proposals were originally conceived as terminals to import natural gas into the U.S. from elsewhere. Then came the revolution in natural gas production from deposits in shale rock via the controversial process known as fracking. It created a glut in Canada and the U.S. and a drive to export the product to Asian markets, where demand and prices are higher.

With the U.S. approaching selfsufficiency in energy, that country's once formidable political opposition to exporting natural gas has diminished. [Red & bold emphasis added.]

Oregon

That sucking sound you hear? Oregon LNG proposals (Jan 23) — The Vancouver Sun, Vancouver, BC

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

Energy: Two terminal plans south of border would tap into B.C., Alberta gas

While the B.C. Liberal government entertains high hopes for multiple liquefied natural gas terminals on the B.C. coast, two rival proposals would tap the provincial resource to feed multi-billion-dollar LNG terminals in Oregon.

One of the two, Oregon LNG Marketing Co. last week filed an application with Canada's National Energy Board for permission to export 1.3 billion cubic feet of gas per day for 25 years.

The application follows one filed last September with the NEB by Jordan Cove LNG, seeking permission to export 1.55 billion cubic feet of gas a day, also for 25 years, to feed a proposed $7.5-billion terminal near Coos Bay.

As a measure of the transformation in the North American gas markets in recent years, both of the Oregon proposals were originally conceived as terminals to import natural gas into the U.S. from elsewhere. Then came the revolution in natural gas production from deposits in shale rock via the controversial process known as fracking. It created a glut in Canada and the U.S. and a drive to export the product to Asian markets, where demand and prices are higher.

With the U.S. approaching selfsufficiency in energy, that country's once formidable political opposition to exporting natural gas has diminished. [Red & bold emphasis added.]

United States

World buyers line up to buy US natural gas — Moneynews

The United States is producing record amounts of natural gas thanks to a drilling boom, and more than a dozen export projects have been proposed. But large domestic users of natural gas such as the petrochemical industry are worried that unfettered exports could push prices higher at home. The Obama administration has been approving exports on a case-by-case basis. [Red & bold emphasis added.]

New Brunswick

LNG tanker due at Canaport terminal this week — LNG World News

Repsol YPF SA’s Canaport terminal in Canada is expected to get one LNG cargo onboard the 138,000 cbm Bilbao Knutsen from Trinidad and Tobago on Thursday, port data shows.

Last year terminal has received an approval from the provincial Department of Environment to export previously imported LNG to global markets with better selling prices. [Red & bold emphasis added.]

Webmaster's comment: Canaport LNG is importing the product in order to comply with long-term contracts. Will this be Canaport's first cargo to be offloaded and then re-exported overseas?

Maine

FERC rejects Portland Gas Transmission's creditworthiness provision (Jan 17) — Natural Gas Intelligence [Paid subscription]

FERC rejected tariff filings by Portland Natural Gas Transmission System (PNGTS) that would have restructured its creditworthiness and financial assurances provisions using a higher present value (PV) calculation than the Northeast pipeline uses in other parts of its tariff.

The Federal Energy Regulatory Commission said a contract with a 20-year term and equal annual monthly reservation charge payments for transportation service of $1,000/month would be valued at about $115.23 million under the present value formula PNGTS’s current tariff. The value of the same contract under its proposed creditworthiness present value formula would be about $237.84 million.

“Portland has not provided sufficient support for concluding that its reasonable opportunity cost of money is twice as high as its current PV formula would indicate,” the Commission order said. [Red & bold emphasis added.]

Webmaster's comment: PNGTS has failed in its attempt to make its value appear to be twice its actual value. Nice try, PNGTS. Do absolutely all hydrocarbon industry players try to cheat?

Northeast

EIA: Northeast and Mid-Atlantic power prices react to winter freeze and natural gas constraints — LNG World News

A record-setting bout of bitter cold weather swept down through the Midwest and across most of the country in early January. The Northeast region reacted with upward spikes in wholesale natural gas and power prices as generators and other customers struggled to procure natural gas supplies. In the Mid-Atlantic region, record-high winter peak demand along with unexpected outages of power plants and natural gas equipment drove peak electricity prices even higher than in New York and New England. The sharp rise in Northeast and Mid-Atlantic natural gas and power demand also spurred record-high natural gas storage withdrawals.

Webmaster's comment: The long-term solution to this problem, unless natural gas is replaced by renewables, is expanded natural gas pipeline deliverability to the Northeast — a solution that is already being developed.

British Columbia

B.C. First Nation upset at being cut out of LNG decision process (Jan 21) — The Globe and Mail, Toronto, ON

The Gitga’at First Nation in northwestern British Columbia says it is upset that backers of a proposed liquefied natural gas project neglected to keep native leaders informed on a decision to award an engineering contract to a joint venture from the United States and Japan.

Arnold Clifton, chief councillor of the Gitga’at First Nation, said consultation is a legal requirement and not merely a courtesy to recognize traditional fishing grounds and other issues.

Gitga’at leaders point out that their territory covers nearly 7,500 square kilometres of land and water, notably Douglas Channel, where ships would need to traverse in order to sail to and from the Chevron-Apache terminal planned near Kitimat.

Webmaster's comment: Chevron appears to have a similar lack of regard for First Nations' rights as does Downeast LNG toward Passamaquoddy rights in the waterway. To-date, Downeast LNG has not obtained a letter of consent from the Passamaquoddy regarding use of the waterway as required by the US Coast Guard. In defiance of the Coast Guard, Downeast LNG has even stated that they believe the Passamaquoddy have no rights in the waterway.

Scientist expresses skepticism over Clark’s LNG figures — EnergyCity.ca, Fort St. John, BC

The Globe and Mail is reporting, a former scientist with the Geological Survey of Canada has cast doubt on the B.C. government’s promise of an economic boom from increased liquefied natural gas production. The story notes Premier Christy Clark has made gas development a cornerstone of her administration, and her government claims, it would produce a cumulative gross domestic product benefit to B.C. of one trillion dollars, by 2046---as well as make the province debt free.

However, David Hughes, a geoscientist with the federal government for more than 30 years, who now works as a private consultant, says the numbers don’t add up.

He argues to meet the export targets in B.C., the gas industry would need to drill 50 thousand new wells in the next 27 years, which is double the number drilled since the nineteen fifties.

Maine

Residents question safety at Searsmont natural gas pipeline station (Jan 15) — Sun Journal, Lewiston, ME

[SPB Webmaster's Note: This incident occurred at one of the several Maritime and Northeast Pipeline pumping stations in Maine.]

SEARSMONT — First came the noise late New Year’s Eve at the Searsmont natural gas pipeline compressor station, so loud that it caused nearby homes to shake and some residents, frightened by the jet-engine-like roar, to pack up their cars and flee for the night.

Marylee Hanley of Spectra Energy, the company that owns and operates the pipeline, wrote in a series of terse emails that she would not divulge any more information until a public meeting at 6 p.m. Tuesday, Jan. 21, at the Searsmont Community Building. Town officials asked that the company hold a meeting in order for residents to get some answers.

The roaring noise, which lasted from just before midnight New Year’s Eve to almost 12:40 a.m. New Year’s Day, was caused by natural gas venting into the air after sensors at the New England Road station detected an equipment malfunction. A pressure valve vented the gas outside, and the facility was automatically shut down.

This fall, Spectra mailed safety brochures to people who live or work near their natural gas pipeline facilities. The pamphlet includes information about the signs of a natural gas pipeline leak, such as a blowing or hissing sound, a gaseous or ‘rotten egg’ odor, flames and dead or discolored vegetation in an otherwise green area. Hazards associated with a pipeline leak are dizziness or suffocation if the leak occurs in a confined space, ignition or fire, potential explosion or projectiles ejected from the force of escaping gas. If there is a possible pipeline leak, people are asked to evacuate the area, avoid open flames, not introduce ignition sources, including cellphones or pagers, and not start or turn off motor vehicles.

Should there be a fire at the facility, what would typically happen is that the gas would burn to the top of the pressure release valve and “look like a big blow torch,” not a fireball, [Maine Department of Environmental Protection oil and hazardous materials responder Thomas Smith] said. [Red & bold emphasis added.]

Webmaster's comment: A fireball could not ensue?

Below are photographs of two natural gas pipeline explosions caused by accidental pipeline ruptures:

First (above), is of a ruptured 36-inch natural gas pipeline that exploded in Texas in 2010. Notice the size of the scorched and burning area; and, in the second photograph (below), the height and width of the flame as seen from miles away. The pipeline had "valves that automatically shut down gas to that section of pipe." Still, it took two hours for the fire to burn out. (Source: The moment workmen accidentally blew up a Texas gas pipeline, leaving one dead and seven injured, Mail Online, 2010 Jun 9.)

Second, more recently (below), a much smaller,10-inch natural gas pipeline, explosion, also in Texas, is shown. Not a fireball? You be the judge. (Source: Small Texas town forced to evacuate after gas pipeline explodes, Daily News, 2013 Nov 14)

Additional Related Sources:

• Natural gas line in Searsmont blows pressure valve, alarms area residents with noise, Penobscott Bay Pilot, 2014 Jan 1
• Spectra Energy compressor station offline while engineers investigate Searsmont gas release, Penobscott Bay Pilot, 2014 Jan 7
  
  • "The venting of gas New Year’s Eve is not the first incident at the Searsmont plant. In March 2010, a loud hissing noise woke residents in the area around the plant, according to the Bangor Daily News. Residents also reported physical effects — headaches and nausea — from the released gas. A community meeting was held following that incident, the newspaper reported, and the cause was attributed to a malfunctioning rubber gasket associated with a relief valve."
• Spectra Energy :: U.S. Natural Gas Pipelines :: Maritimes and Northeast Pipeline

Northeast

Dominion a no-show at town hall meeting (Jan 16) — The Baynet.com, MD

The plan to build a liquefaction facility at a Lusby gas plant took a pounding at a town hall meeting held Tuesday, Jan. 14 at Southern Community Center.

Residents of subdivisions located in proximity to the plant—which currently has the capability to accept imported LNG—voiced a variety of concerns. Like environmentalists who have stood in opposition to the plan since its inception, the residents indicated their desire to require Dominion to submit an environmental impact statement (EIS). Presently, the company is only being required to provide the Federal Energy Regulatory Commission (FERC) with an environmental assessment.

In addition to needing FERC’s OK to proceed with the project, Dominion will also need to win approval from the Maryland Public Service Commission (PSC) for the liquefaction facility’s gas turbines. The PSC will hold a public hearing on the matter Saturday, March 1 at noon at Patuxent High School.

Word, worry continue to spread about Dominion LNG project (Jan 17) — SoMdNews.com, MD

“If you look only at the tax dollars and the construction jobs, you may think this is not a bad idea,” [Cove of Calvert resident Jean Marie Neal] said. “But to do that in a vacuum is just not responsible and gives no measurement to the potential downsides and how such a project would transform the area around and on Cove Point Road, in Calvert County and with the folks for the entire state of Maryland. To do that in a vacuum gives no measurement to what local residents will feel, see and hear every day. It gives no measurement to potential negative risks to area wetlands, to our precious Chesapeake Bay, to the Patuxent, and all the revenue we derive from the resulting tourism and fishing.”

“We hear the existing facility on a regular basis — just the pumps. We don’t have the jet-turbine power plant up yet. We get the light pollution from this thing without even the new construction having started yet,” [Hidden Treasures homeowners’ association secretary and treasurer Mark Wentling] said.

Dominion raises dividend, prepares for LNG exports (Jan 17) — Investors.com

Thanks to technological advances in drilling, the U.S. is rapidly becoming a global leader in natural gas production. Output hit an all-time high of 25.3 trillion cubic feet last year. The U.S. is expected to export 100 million metric tons of LNG by 2025. [Red & bold emphasis added.]

United States

U.S. to achieve energy independence by 2035 (Jan 15) — National Journal, Washington, DC

The U.S. will achieve the long sought-after domestic policy goal of energy independence by 2035, according to projections outlined in BP's Energy Outlook 2035 released on Wednesday.

Webmaster's comment: So, why does Downeast LNG contine to beat its dead horse?

AEA urges DOE to reconsider approval of new LNG export applications (Jan 15) — LNG World News

“It is our understanding that the Department of Energy may be on the verge of approving another application to export American natural gas to non-FTA nations. If permitted, it would mark the sixth consecutive approval, meaning that this Administration will have agreed to export nearly 12 percent of domestic natural gas production to nations that do not have a reciprocal free trade agreement with the United States. With all due respect, we are very concerned that exporting such a large volume of this strategic commodity, which is vital to U.S. competitiveness, is contrary to the national interest. We respectfully urge you to reconsider approving any additional export applications until a comprehensive review of the current natural gas market conditions is completed,” the letter said.

Natural gas prices have already increased by nearly 30 percent since approval of the first LNG export terminal. Approval of the Sempra application would raise the cumulative volume of LNG export capacity to 8.47 Bcf/day, well in excess of the “low export scenario” level identified in the NERA report, according to AEA.

EIA: Cold weather across U.S. led to record gas demand (Jan 17) — LNG World News

Last week’s widespread, record-breaking cold weather had significant effects across virtually all segments of the U.S. natural gas market. The frigid temperatures led to record highs in demand, storage withdrawals, and prices, EIA said in a report.

In the Northeast, where more than half of homes use natural gas as their primary space-heating fuel, several pipelines issued critical notices and operational flow orders to prevent system imbalances. Additionally, Texas Eastern Pipeline, a major interstate pipeline supplying the Northeast, issued a force majeure (which frees both parties from upholding contractual obligations in the event of extraordinary circumstances) following unplanned maintenance at a compressor station in Pennsylvania.

Webmaster's comment: The long-term solution to Northeast natural gas pipeline constraints is pipeline expansions — activity that is already taking place, with plans for more, including by Maine government. Downeast LNG president Dean Girdis wants everyone to believe that pipeline network expansion is nearly impossible, and that the only solution is to import expensive, unneeded LNG from overseas — even though Downeast LNG, itself, is proposing to build one of those impossible pipelines.

New England

USA: One LNG cargo imported in Nov — LNG World News

The U.S. imported only one liquefied natural gas cargo in November, according to the U.S. Department of Energy data.

The 151,015 cbm Expedient LNG tanker, which sailed from Trinidad and Tobago, docked at the Everett LNG terminal on November 13.

The U.S also re-exported one LNG cargo in November from the Freeport terminal to the UK, onboard the 138,000 cbm British Trader on November 27.

Webmaster's comment: It's a sad time for Downeast LNG and all other US and Canadian LNG import businesses.

United States

EIA: U.S. boosts gas production and use since 2005, while OECD Europe scales back — LNG World News

Since 2005, significant production growth has outpaced rising consumption in the United States, reducing net imports of natural gas by 58% between 2005 and 2012. Production and consumption in OECD Europe have both fallen moderately since 2005, reducing Europe’s net imports by only 6% between 2005 and 2012.

In the United States, natural gas consumption and production remained relatively flat until 2005, after which natural gas production from shale plays began increasing rapidly. Since 2005, natural gas production has increased almost twice as fast as consumption, growing to 24 Tcf in 2012.

Natural gas production increases in Wyoming, Colorado, Pennsylvania, and Oklahoma accounted for most of the U.S. natural gas production gain over this period. Even though natural gas consumption has not grown as fast as production, it still grew by 16% over this period, to 25.5 Tcf in 2012. This growth was mainly driven by consumption for electric power generation. As a result of robust production growth in the United States, U.S. net imports in 2012 fell to the lowest level since 1990. [Red & bold emphasis added.]

Northeast

Pa. vying to be global energy leader (Jan 11) — The Tribune-Democrat, Johnstown, PA

The Constitution Pipeline would move gas through a 125-mile pipe, from northeastern Pennsylvania into the New York City and New England markets.

Construction could start this summer, pending federal approval, with gas delivered as early as the spring of 2015. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis says such pipelines are nigh impossible. In reality, it is Downeast LNG's project that is impossible.

Fracking opponents appeal to Annapolis to prevent export of shale gas at Cove Point — (DC Media Group) Truthout

Opponents of the fossil fuel extraction process called hydraulic fracturing rallied on January 8 at the Murphy Court of Appeals in Annapolis, MD, as oral arguments were presented in a lawsuit concerning the proposed expansion of the Cove Point Liquid Natural Gas (LNG) terminal.

…Dominion Resources’ push to expand the Cove Point terminal to become a major export facility for “fracked” gas has become a flashpoint for controversy. Maryland residents have stepped in to stop the $3.8 billion project, contending that an export operation and its supporting infrastructure will adversely affect the economy, environment and citizens’ health, while opening up Maryland to a fuel extraction method still being developed by trial and error. Dominion, on the other hand, claims that residents’ fears are unfounded and the state’s economy will benefit.

The massive construction project will have significant impacts on Lusby and Solomons Island, sandwiched between the Chesapeake Bay and the Patuxent River. It will include a utility scale gas turbine power plant and a 60-foot-high sound abatement wall spanning three-quarters of a mile. Among other things, the sole highway along the peninsula of Southern Maryland will be clogged with traffic, but her concerns lie with plummeting real estate values and “pollution trading schemes.” [Red & bold emphasis added.]

Webmaster's comment: That 60-foot-tall ¾-mile-long wall would certainly be "attractive" — similar to Downeast LNG's proposed 30-foot-tall ½-mile-long solid vapor barrier along US-1 in Robbinston. Do all LNG developers have this same degree of architectural sensitivity?

Oregon

New York-based Oregon LNG applies to export Canadian natural gas — Financial Post, Don Mills, ON

CALGARY – A New York-based holding company [Oregon LNG Marketing Co., LLC's owner, Leucadia National Corp.] applied to regulators to use Canadian natural gas to feed a proposed export terminal in Oregon, putting a cross-border twist on Canada’s plans to create a brand new liquefied natural gas industry.

Jordon Cove LNG L.P., which is backed by Calgary-based Veresen Inc., is also looking to export up to 1.55 bcf/d from Canada along existing pipelines owned by TransCanada Corp. and Spectra Energy Corp. to a proposed export plant in nearby Coos Bay, Ore.

Webmaster's comment: Would these projects result in a US-Canadian quid pro quo regarding exporting US natural gas from Nova Scotia?

Nova Scotia

Exporting liquid natural gas from Nova Scotia (Jan 7) — Halifax Media Co-op, Halifax, NS

An examination of the Goldboro LNG project

The company is contemplating three areas to source its plant: the Marcelus Shale formation in North Eastern U.S., New Brunswick, and offshore Nova Scotia.

Pieridae notes that New Brunswick is another source for gas. In their application to the National Energy Board, Pieridae stated at least one third of it's fuel supply would come from shale gas projects in New Brunswick – where SWN Resources Canada has met escalating opposition from First Nations and New Brunswick communities to their exploration activities since the summer of 2013.

In order to acquire natural gas from the U.S. there are plans to reverse the flow and increase overall capacity of the 1,101-kilometre pipeline, which runs from Goldboro to Dracut, Mass.

The Conservative Government of New Brunswick is adamant about developing their natural gas resources, but, as noted above, has met significant opposition to these plans from First Nations and New Brunswick communities alike. It remains to be seen how Pieridae will move forward with this project with such opposition to the actual extraction of their supply. [Red, yellow & bold emphasis added.]

Webmaster's comment: Until New England's natural gas pipeline constraints have been eliminated, Pieridae's Goldborough LNG export project seems unlikely. Even then, it would require US authorization, since US natural gas pipeline exports are prohibited from foreign re-export.

New Brunswick

Canada to receive LNG cargo (Jan 9) — LNG World News

Repsol YPF SA’s Canaport import terminal in Canada is scheduled to get one liquefied natural gas cargo from Trinidad and Tobago on January 24, port data reveals.

Webmaster's comment: Will Canaport re-export this cargo, due to lack of demand for its product?

New England

EIA: New England, New York have largest gas price increases in 2013 (Jan 8) — LNG World News

The [winter demand] price increases were relatively uniform, except in the northeastern United States, where cold-weather-driven demand spikes exacerbated the impact of pipeline constraints in Boston and New York City markets. The importance of supply changes for prices is shown at the Transco Leidy Hub in Pennsylvania where prices in 2013 were only 11% higher than in 2012, despite much greater absolute and percentage price increases at nearby hubs serving New York City and Boston. The Leidy Hub prices were most directly affected by continued growth in production from the Marcellus shale.

Prices at the Algonquin Citygate hub serving New England and the Transco Zone 6-NY serving the New York City metropolitan area were affected by demand spikes driven by cold weather in January and December of [2013].

Pipeline expansions have alleviated the impact of constraints in the New York/New Jersey market, while constraints remain in New England. [Red & bold emphasis added.]

Webmaster's comment: Maine and the other New England states are actively working to eliminate existing natural gas pipeline constraints that limit delivery during periods of high demand. That disqualifies the future need for incremental LNG importing — raining on Downeast LNG's parade.

Northeast

Annapolis rally opposes LNG exportation (Jan 10) — SoMdNews.com, MD

About 100 residents from across the state, including Sourhern Maryland, and members and leaders of environmental groups rallied Wednesday morning at the Robert C. Murphy Courts of Appeal Building in Annapolis to support legal opposition to Dominion Cove Point’s proposed liquefied natural gas exportation project.

In January 2013, the court ruled the [March 2005 contract agreement among Dominion, the Sierra Club and the Maryland Conservation Council] permits the construction, operation and maintenance of additional facilities for the LNG expansion within a particular area of the terminal site in Lusby. The decision further declared that the 2005 agreement permits Dominion to export LNG from the terminal site.

The Sierra Club filed an appeal, and oral arguments began in that case Wednesday in Annapolis, where supporters gathered outside on the court steps chanting for justice and displaying banners and signs calling to “stop Dominion!”

Dominion Cove Point gets support from union workers (Jan 9) — Southern Maryland News Net, MD

Dominion Cove Point LNG Terminal is located on the Chesapeake Bay in Lusby. It is one of the nation’s largest liquefied natural gas (LNG) import facilities. Dominion acquired Cove Point from Williams on September 5, 2002, and began receiving ships in the summer of 2003. In 2009, Dominion finished an expansion project that increased Cove Point’s storage and production capacity by nearly 80 percent. [Red emphasis added.]

Webmaster's comment: The article fails to mention that Cove Point LNG has been idle for the past two years, nearly decommissioning due to lack of imports. Importing LNG is no longer needed, since the US is drowning in a sea of domestic natural gas. So, Cove Point LNG must export domestically-supplied LNG or go out of business.

Cove Point VP provides overview of LNG export project (VIDEO) (Jan 9) — LNG World News

VP of LNG Operations Mike Frederick provided answers to some of the common questions surrounding the Cove Point LNG Export project.

Pending receipt of regulatory approval and permits, construction is scheduled to begin in 2014, with an in-service date of 2017.

Oregon

Oregon LNG: State delays decision, frustrating everyone involved (Jan 9) — The Oregonian, Portland, OR

Oregon officials have put off deciding whether a proposed liquefied natural gas terminal near the mouth of the Columbia River in Warrenton is consistent with its coastal management plan.

The Department of Land Conservation and Development says it doesn't have what it needs to make the call. That rankles both backers of the project and its opponents. They don't think it's true, for one. And they say the ongoing delays lock everyone in a regulatory holding pattern, including the applicant, taxpayers bankrolling the agencies, and community members and landowners waiting for a decision.

The Department of Land Conservation and Development, or DLCD, is only one player in the alphabet soup of state and federal agencies involved. Its piece is to determine if the project is consistent with land use policies and goals in the coastal management plan. The agency says Oregon LNG still lacks a passel of local and state permits, and a federal environmental review, so it couldn't process the consistency determination by its Jan 3 deadline. Patty Snow, the coastal program manager, says the review is "on hold" until it receives those materials.

United States

LNG growth to make US net natural gas exporter by 2016: report (Jan 9) — Platts

The US will become a net exporter of natural gas by the first half of 2016, largely due to the expected rapid growth of the US liquefied natural gas export industry along with a boost in Mexican pipeline capacity and a drop in domestic demand for Canadian gas, analysts with Barclays Commodities Research said in a report Thursday.

US natural gas imports have dropped 67% from their peak in 2007, with Canadian gas imports falling from 9 Bcf/d in 2001 to 5 Bcf/d in 2013 and imports of Canadian gas into the Northeast falling to historically low levels last year, Barclays said. With increased production in the Marcellus and Utica shales, the Northeast will likely become a net exporter by 2015 with US gas going to Canada's eastern provinces and displacing Canadian imports in the Midwest. [Red & bold emphasis added.]

Webmaster's comment: If you know Downeast LNG president Dean Girdis, do him a favor and tell him about this article. Apparently, he is unaware that his project has no future.

EIA expects record gas demand for 2013 (Jan 9) — LNG World News

EIA said that natural gas marketed production will grow at an average rate of 2.1% in 2014 and 1.3% in 2015. Rapid Marcellus production growth is causing natural gas forward prices in the Northeast to fall even with or below Henry Hub prices outside of peak-demand winter months. Consequently, some drilling activity may move away from the Marcellus back to Gulf Coast plays such as the Haynesville and Barnett, where prices are closer to the Henry Hub spot price. EIA projects Gulf of Mexico production will continue a long-term decline and fall slightly in 2014 and moderately in 2015.

Growing domestic production over the past several years has replaced pipeline imports from Canada, while exports to Mexico have increased. EIA expects these trends will continue through 2015. [Red & bold emphasis added.]

Northeast

More natgas takeaway capacity proposed to East Coast (Dec 27) — Shale Daily, Natural Gas Intelligence

To accommodate increasing Appalachian Basin natural gas volumes, a 9.5-mile, 16-inch diameter pipeline that would run parallel to an existing line has been proposed to carry Pennsylvania-produced gas through Broome County, NY, to East Coast markets.

"Despite the existence of the New York Mainline and other pipelines (with which the project will compete against), there is still an inadequate presence of natural gas pipelines and gathering infrastructure that are required to collect, aggregate and bring additional quantities of clean burning natural gas to New York," said the applicants. "The proposed New York Mainline Loop Pipeline will serve this need. Like the New York Mainline...the Loop Pipeline will feed into Williams' existing facilities for ultimate delivery into the existing interconnection with the MPC."

Millennium serves New York service territories of National Grid, Orange and Rockland Utilities, New York State Electric and Gas Corp., Corning Natural Gas, and Central Hudson Gas and Electric Corp., the filing said. "Thus, the New York Mainline Loop Pipeline will provide New York, other Northeast markets and their residents, with an additional supply of regionally produced natural gas." [Red, yellow & bold emphasis added.]

Webmaster's comment: There's a big fat hole in Downeast LNG president Dean Girdis's argument that the only solution to solving natural gas supply needs in New England is yet another idle LNG import terminal. The US has plenty of natural gas, the Northeast has plenty of natural gas, and pipelines are being planned and constructed to provide ample supply to New England and Maine.

Marcellus Shale drilling becomes more efficient (Dec 29) — The Tribune, Greeley, CO

Marcellus Shale exploration companies are drilling bigger wells in less time at less cost, and they are producing more natural gas than ever.

Despite a reduction in the number of drill rigs operating in Pennsylvania in the past two years because of the low price of natural gas, each rig is accomplishing much more. The Marcellus, which includes wells in West Virginia, now produces nearly a fifth of the nation’s natural gas.

Seneca says improvements in the last year alone saved about $525,000 per well in Tract 100. Its break-even point for these wells is $2.20 per 1,000 cubic feet of natural gas. The market price is nearly $4, so these are very profitable wells. [Red & bold emphasis added.]

Southeast

Shell, El Paso Pipeline moving forward on LNG project in Georgia (Jan 2) — The State Journal, WV

The expansion will boost the plant's capacity, allowing them to export more liquefied natural gas when the expansion comes online in 2017 or 2018.

Kimberly S. Watson, president, Natural Gas Pipelines East Region for Kinder Morgan (KMI), said the $1.5 billion Elba Terminal "will further enhance what has become an abundant natural gas resource in the United States and will result in development of new international markets without straining the availability or cost of natural gas supply to U.S. markets." [Red & bold emphasis added.]

Alaska

US DOE to consider ConocoPhillips Alaska LNG project separately: source (Jan 3) — Platts

The US Department of Energy will consider an application by ConocoPhillips to resume liquefied natural gas exports from Alaska separately from an ongoing agency review process of plans to ship LNG to countries without free trade agreements with the US, a DOE official said Friday.

While the official, who spoke on the condition of anonymity, would not say when the ConocoPhillips application could be approved, the separate consideration ensures that the Alaska project will not face years of potential delay as DOE considers roughly two dozen applications that would have been ahead of it in a queue.

The ConocoPhillips project would have been 24th on this list, but DOE will instead consider the project under a short-term import/export application process, separate from the order of precedence set up for processing long-term authorizations, the official said.

The Alaska project is being considered separately because it is seeking a reauthorization for less than two years of exports, the official said. In addition, the amount of LNG to be exported from the Alaskan project is "miniscule" compared with export projects in the DOE queue, the official said.

British Columbia

Is LNG fracturing worth its weight in water? (Dec 29) — The Globe and Mail, Toronto, ON

More than seven billion litres of water were used for fracking in B.C. last year. If the government’s liquefied natural gas sector takes off, the water needed to get shale gas out of the ground in the northeast corner of the province will likely increase by 500 per cent, or more.

Lana Lowe is the director of the Fort Nelson First Nation’s department of land and resources. The water taken out of the band’s territory has already increased 12-fold in the past two years. Sitting in on an environmental appeal board hearing in Victoria in late December, where the Fort Nelson are trying to stop just one of the many applications for a fracking project in their backyard, Ms. Lowe senses that they are trying to stand in the way of a locomotive.

At issue in the appeal board hearing is Nexen Inc.’s licence to divert water from North Tsea Lake, north of Fort Nelson – up to 2.5 billion litres per year. The company stores the water for fracking. The Fort Nelson First Nation says this is in the core of their traditional territory and it infringes on their treaty rights, which grant them the right to hunt and fish as they did before they signed their treaty in 1899.

Oregon

Oregon LNG gets three more months for Warrenton application (Dec 31) — Sustainable Business Oregon, OR

The group looking to site a liquified natural gas terminal and pipeline in Warrenton said it has received an extension to complete its application.

The decision means that the state has additional time to collect more information and determine whether Oregon LNG's application is consistent with regulations established through the Coastal Zone Management Act.

Oregon LNG agrees with the State of Oregon to extend to April 3, 2014 the review of its CZMA application [Press release] (Dec 30) — [BusinessWire] MarketWatch

In a statement issued in Portland today, Oregon LNG applauded the execution of a three-month stay agreement between Oregon LNG and the Department of Land Conservation and Development (DLCD) of the state of Oregon with respect to its completed Coastal Zone Management Act (CZMA) application.…

The CZMA is the primary regulatory construct under which coastal cities, counties, and state and federal agencies administer Oregon's federally approved Coastal Management Program. On July 3, 2013, the state of Oregon determined that the application of Oregon LNG for a consistency determination from the state of Oregon under the CZMA was complete. Under the CZMA, the state of Oregon has six months to make a consistency determination for a project once its application is deemed to be complete.

Webmaster's comment: Do all LNG developers claim delays and bad news are actually "good news"?

Oregon LNG leaders welcome delay on coastal land rules action (Dec 31) — The Daily Astorian, Astoria, OR

PORTLAND — Oregon LNG leaders have applauded a three-month stay agreement between Oregon LNG and the Department of Land Conservation and Development of Oregon on its completed Coastal Zone Management Act (CZMA) application.

On July 3, 2013, the state of Oregon determined that the application of Oregon LNG for a consistency determination from the state of Oregon under the CZMA was complete. Under the CZMA, the state has six months to make a determination for a project once its application is deemed complete.

Guam

PUC rejects full contract cost: GPA ordered to find other funds for LNG consult (Jan 2) — Pacific Daily News, Guam

The Public Utilities Commission Tuesday refused to approve the full cost of the Guam Power Authority's multimillion-dollar consulting contract to implement liquefied natural gas.

By [PUC legal counsel Fred Horecky] calculations, five consultants working for the power company would be paid about $236 an hour working eight hours a day every day of the year to amount to the cost laid out in the $3.9 million contract.

"The PUC has become more concerned that the utilities spend huge amounts on consultant contracts, and the PUC wants to make sure it's justified," he said.

Webmaster's comment: LNG-related energy companies seem to be the same everywhere.

United States

U.S. Endangered Species Act turns 40 (Dec 27) — Maritime Executive

“Nothing is more priceless and more worthy of preservation than the rich array of animal life with which our country has been blessed. It is a many-faceted treasure, of value to scholars, scientists, and nature lovers alike, and it forms a vital part of the heritage we all share as Americans," said president Richard Nixon upon signing the Endangered Species Act, December 28, 1973.

Key trends impacting natural gas prices in the U.S. (Jan 3) — NASDAQ

Growing Supply Of Shale Gas

The outlook for U.S. natural gas supply has changed significantly over the past few years, primarily due to the evolution of horizontal drilling and hydraulic fracturing; these techniques have enabled energy companies to tap the huge shale gas reserves in the U.S. at commercially sustainable rates. Widespread use of these techniques started only during the early 2000s in the Barnett shale play in north-central Texas. However, since then, natural gas production in the U.S. has ramped up much faster than the growth in consumption, which has led to severely depressed commodity prices by international standards.

Today, natural gas prices in the U.S. are less than half of that in the Europe and less than one-third of that in the LNG (liquefied natural gas) dependent Asian economies, such as Japan. Huge recoverable reserve estimates lead the EIA to believe that shale gas would account for ~50% of the total natural gas production in the U.S. in 2040. Additionally, as the industry's understanding of the shale resource basins continues to grow, leading to more productive wells, drilling costs are expected to trend lower. We therefore expect natural gas prices in the U.S. to remain depressed by international standards in the medium to long term. [Red & bold emphasis added.]

The global impact of US shale | Daniel Yergin (Dec 30) — Livemint

Five years ago, it was expected that the US would be importing large volumes of liquefied natural gas (LNG) to make up for an anticipated shortfall in domestic production. Now the US is not importing any LNG—thereby saving $100 billion on its annual import bill. At current prices, the increase in US oil production has been cutting another $100 billion from that bill. In addition, the unconventional revolution supports over two million jobs. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG president Dean Girdis would rather that the US import unneeded LNG from overseas, hurting the US trade deficit.

How a mega project snafu could snarl America’s gas exports (Jan 4) — The Seattle Times, Seattle, WA

[This same article appears under the Central America heading, below.]

Plans to ship liquefied natural gas through an expanded Panama Canal could be jeopardized because of a dispute over cost overruns, writes syndicated columnist Keith Johnson.

The biggest construction project in the world is on the rocks. And that could have big negative implications for the United States as it tries to turn its natural-gas bonanza into an engine of export earnings and geopolitical influence.

The project is the expansion of the Panama Canal to allow more and bigger ships to pass through — for instance, the large tankers that carry liquefied natural gas (LNG). Today, only about 6 percent of the global LNG tanker fleet can pass through the canal; after the expansion, about 90 percent of tankers will be able to use it, according to a U.S. government study. The bigger canal would provide a quicker and cheaper way to ship natural gas from the U.S. Gulf Coast and East Coast to markets in Asia that are desperate to secure supplies of natural gas.

Without the expansion, LNG tankers largely have to pass around the southern tip of South America, adding thousands of miles and extra costs to the journey. Cost matters, because U.S. gas is cheap at home, but has to be frozen to a liquid, then packed on the tankers and sent across the ocean — all of which costs more than the gas itself does. To compete effectively with LNG from Australia, Malaysia and Qatar, U.S. exporters need to ship their gas on big tankers taking the shortest possible route.

Central America

How a mega project snafu could snarl America’s gas exports (Jan 4) — The Seattle Times, Seattle, WA

[This same article appears under the United States heading, above.]

Plans to ship liquefied natural gas through an expanded Panama Canal could be jeopardized because of a dispute over cost overruns, writes syndicated columnist Keith Johnson.

The biggest construction project in the world is on the rocks. And that could have big negative implications for the United States as it tries to turn its natural-gas bonanza into an engine of export earnings and geopolitical influence.

The project is the expansion of the Panama Canal to allow more and bigger ships to pass through — for instance, the large tankers that carry liquefied natural gas (LNG). Today, only about 6 percent of the global LNG tanker fleet can pass through the canal; after the expansion, about 90 percent of tankers will be able to use it, according to a U.S. government study. The bigger canal would provide a quicker and cheaper way to ship natural gas from the U.S. Gulf Coast and East Coast to markets in Asia that are desperate to secure supplies of natural gas.

Without the expansion, LNG tankers largely have to pass around the southern tip of South America, adding thousands of miles and extra costs to the journey. Cost matters, because U.S. gas is cheap at home, but has to be frozen to a liquid, then packed on the tankers and sent across the ocean — all of which costs more than the gas itself does. To compete effectively with LNG from Australia, Malaysia and Qatar, U.S. exporters need to ship their gas on big tankers taking the shortest possible route.