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British Columbia

Fracking, earthquakes and hydro dams? Don’t worry, we have an understanding. — Desmog Canada

Efforts by BC Hydro to ban potentially destructive natural gas company fracking operations in the vicinity of its biggest dams fall well short of what an Alberta hydro provider has achieved, raising questions about why British Columbia isn’t doing more to protect public safety.

Documents obtained through a Freedom of Information (FOI) request by the Canadian Centre for Policy Alternatives show that BC Hydro officials have feared for years that fracking-induced earthquakes could damage its dams and reservoirs.

No Mandated Frack-free Zones Near Dams

Yet, after years of discussions with B.C.’s Oil and Gas Commission (OGC), which regulates oil and gas industry activities in the province, BC Hydro has obtained only modest commitments to prevent fracking near its two Peace River dams — the massive WAC Bennett dam, which impounds the world’s seventh-largest reservoir, and the smaller Peace Canyon dam downstream.

[A]s is the case in B.C., there is nothing in writing to reassure members of the public — no regulation or government statement — banning natural gas companies from fracking near sensitive infrastructure such as hydro dams and reservoirs. Both provinces appear reluctant even to suggest that fracking is inappropriate in certain cases where public safety is concerned, perhaps fearing the precedent such an admission would represent.

Brown likens the OGC to the National Energy Board. “It has a dual role as a proponent of oil and gas development, but also its regulator. And I think there is a fundamental conflict with that,” Brown says. He adds that “political oversight” of the OGC is also problematic because two Cabinet ministers — Energy and Mines Minister, Bill Bennett, and Minister of Natural Gas Development, Rich Coleman — are effectively there to “promote oil and gas activity.” [Colored & bold emphasis added.]

Oregon

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Canada

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United States

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Mexico

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North America

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Nova Scotia

Approval obtained for LNG pipeline from Goldboro to Cape Breton (Aug 3) — CBC News

Pipeline to connect Bear Head LNG Corporation facility in Point Tupper with North American pipeline

The 62.5-kilometre pipeline will run between Goldboro, N.S., to the Bear Head LNG Corporation's export facility still to be constructed in Point Tupper, Richmond County.

Bear Paw and Bear Head are Nova Scotia-based sister companies, both owned by Australia's Liquefied Natural Gas Limited.

Bear Head obtained all required permits to construct the liquefied natural gas export facility in Point Tupper, on the Strait of Canso, southeast of Port Hawkesbury. Canada's National Energy Board and the U.S. Department of Energy have granted export licenses for the facility, the company said in June.

Webmaster's comment: For financial viability, Bear Head LNG would need to obtain natural gas from either the US or western Canada.

Bear Paw receives permit for 62.5 km pipeline (Aug 10) — Pipelines International

The Nova Scotia Utility and Review Board approved the project which will run from Goldboro to the proposed Bear Head LNG export facility in Point Cupper.

Bear Paw, a subsidiary of Liquefied Natural Gas Ltd (LNGL), put forward the proposal to construct and operate the pipeline.

LNGL’s Managing Director and CEO and Bear Paw President Greg Vesey said “Bear Paw’s pipeline is integral to the development of Bear Head LNG. The Permit to Construct is an important regulatory component.

New Brunswick

Canaport LNG raises concerns about ship traffic from Energy East (Aug 9) — CBC News

Company wants LNG ships given priority over oil export ships due to nature of cargo

Canaport LNG feels it has received "inadequate consultation" about the proposed Energy East pipeline given its close proximity to the proposed tank farm for the pipeline project.

Fraser Forsythe of Canaport LNG told a National Energy Board public hearing in Saint John that ships coming to Canaport loaded with liquified natural gas for off-loading in Saint John will be close to the approach path for ships coming to the pipeline's export terminal.

"We are quite concerned that we have adequate consultation so we understand what the impacts might be to our terminal," Forsysthe said during Canaport LNG's appearance before the NEB panel as an intervener.

Forsythe said "an uninterrupted berthing window" is needed for each ship because of the technical requirements of loading frozen LNG.

New England

RI lawmakers ask FERC to deny proposed National Grid LNG storage project (Aug 5) — SNL

Rhode Island legislators asked FERC to reject National Grid LNG LLC's proposed Fields Point natural gas liquefaction project, saying the facility would be unsafe.

The National Grid plc subsidiary submitted an application for the Fields Point project to FERC on April 1 requesting that the commission issue a certificate order to construct and operate a liquefaction facility at the company's existing LNG storage facility. The company said the new facility would provide a local supply of LNG to back up LNG imports from overseas and gas pipeline deliveries at times of peak gas use. It would be "a reliable, safe, cost-effective way to ensure that our customers have the natural gas they need to heat their homes and businesses, particularly when the demand is greatest," National Grid said on its website.

"It appears that the cost of this project will be directly passed on to ratepayers," the letter said. "The facility's primary purpose is to allow National Grid to export LNG out of Rhode Island, so Rhode Island families [would] in effect be subsidizing utility profits. This is unacceptable to us."

The legislators pointed out that the commission denied authorization to an LNG import facility project proposed a decade ago at the same site. "A liquefaction facility in the Port of Providence was not safe in 2005, and it would not be safe in 2016," the letter said. "The proposed LNG facility would bring with it increased safety risks for practically the entire city." [Colored & bold emphasis added.]

Sierra Club statement on National Grid LNG proposal (Aug 8) — RI Future

The Rhode Island Sierra Club strongly praises the bold climate leadership of the nine Providence legislators who publicly expressed their opposition to National Grid’s proposal for a $180 million fracked gas liquefaction facility at Fields Point in the Port of Providence.

[T]his project represents a boondoggle for ratepayers, an unjustifiable safety risk for the local community, and the kind of unacceptable doubling down on fossil fuel infrastructure that will guarantee we blow past our legally mandated emission reduction goals. And we are proud to see so many legislative leaders refusing to condemn our beautiful state to a future of climate catastrophe.

Stopping climate change is the moral crisis of our time – and it will only be possible if we end these vast investments in new fossil fuel infrastructure that guarantee our addiction to fossil fuels continues past our planet’s point of no return. We all need to join in this fight. Rhode Island Sierra Club pledges our support for elected officials who take this moral imperative seriously, like the nine Providence legislators who came out in opposition to the LNG proposal last week. And we condemn in the strongest possible terms the cowardice of self-proclaimed climate leaders who choose to give in to the fossil fuel industry. Mayor Elorza, your actions speak much louder than your words – please, do the right thing and join your legislative delegation in standing up for Providence’s current and future citizens. [Colored & bold emphasis added.]

Northeast

Cove Point LNG two-thirds complete, says Dominion (Aug 5) — Natural Gas Intelligence [Paid subscription]

The Cove Point liquefied natural gas (LNG) terminal is now two-thirds complete and on track for an in-service date in late 2017, management for Dominion Resources and Dominion Midstream Partners LP told investors Wednesday.

Dominion is still waiting on regulatory approval to begin construction on its 1.5 Bcf/d Marcellus-to-Southeast Atlantic Coast Pipeline and the related Supply Header Project, Farrell said. “We have continued to respond to data requests and are quite pleased with our progress at FERC. We anticipate receiving a scheduling order very soon followed by a permit, which will allow us to begin construction by mid-2017.” [Colored & bold emphasis added.]

Gulf of Mexico

SCT&E expecting busy months with LNG export terminal project in Cameron (Aug 12) — AmericanPress.com

SCT&E (Southern California Telephone and Energy) plans to construct a multibillion-dollar liquefied natural gas export terminal in Cameron Parish. The terminal received a 30-year authorization in 2014 from the Department of Energy for the export of 1.6 billion cubic feet per day of natural gas, or 12 million tons per year of domestically produced LNG.

Webmaster's comment: Department of Energy export approval is separate from a FERC permit to construct.

Cheniere Energy reports loss as glut in natural gas depresses prices (Aug 9) — The Wall Street Journal

Surging natural-gas supplies in North America and slowing demand from traditional buyers in Asia have pushed down LNG spot prices and made it more difficult for suppliers to ink fixed-price contracts needed to secure financing for export projects.

The company is building five LNG trains for Sabine Pass and two more at a facility in Corpus Christi, Texas. It is considering up to four additional trains if it can secure long-term supply agreements with buyers. That represents a more cautious approach from a year ago. [Colored & bold emphasis added.]

Sempra: FID on Cameron LNG expansion project could be postponed (Aug 8) — LNG World News

San Diego-based energy company and LNG operator Sempra Energy said that a final investment decision on the proposed Cameron LNG expansion project could be delayed beyond the first half of 2017.

[T]he final investment decision could be postponed as one of the partners “indicated to Sempra Energy and the other partners that it currently does not want to invest additional capital in Cameron LNG JV with respect to the expansion,” Sempra said in a 10-Q filing with the U.S. Securities and Exchange Commission. [Colored & bold emphasis added.]

Caribbean

Jamaica in LNG first (Aug 9) — LNG World News

The 2003-built, 138,500-cbm Golar Arctic has arrived in Jamaica to serve as a floating storage unit supplying fuel for the country’s 120-megawatt power plant at Bogue, Montego Bay.

Supplied by the US-based New Fortress Energy, the first LNG shipment arrived at the port of Kingston aboard the Golar Arctic on Friday, August 5, Jamaica’s energy company, JPS said in a statement.

New Fortress Energy signed an agreement with JPS last year to supply LNG for Jamaica’s power plant in Bogue. Earlier this year, the power plant was converted to run on gas as well as automotive diesel oil.

Carib Energy to supply Puerto Rico flour plant with LNG (Aug 5) — LNG Law Blog

Carib Energy (USA) LLC, a subsidiary of Crowley Maritime Corp. (Crowley), has been awarded a multi-year contract to supply containerized LNG shipped from Crowley’s Jacksonville, Fla. terminal to Molinos de Puerto Rico, “the Caribbean arm of Ardent Mills LLC., the territory’s leading supplier of flour as well as wheat, corn and rice-based food ingredients.” The Molinos plant will use the regasified LNG for power consumption.

British Columbia

Petronas plans total review of Canada LNG project (Aug 10) — theSundaily, Malaysia

KUALA LUMPUR: Petroliam Nasional Bhd (Petronas) said it will conduct a total review of its proposed liquefied natural gas (LNG) project in northern British Columbia, Canada, before committing to a final investment decision (FID).

Petronas and its partners have been waiting about three years for a permit to build the Pacific NorthWest LNG export terminal in northern British Columbia. – Reuters [Colored & bold emphasis added.]

Pacific Northwest LNG won’t hurt B.C. aboriginals' salmon catches: CEAA (Aug 10) — The Globe and Mail, Toronto, ON

The Canadian Environmental Assessment Agency says the Gitanyow First Nation will still be able to fish if an $11.4-billion terminal is built to export liquefied natural gas from Lelu Island in northwestern British Columbia.

[Glen Williams, chief negotiator for Gitanyow hereditary chiefs,] said in an interview that he is disappointed with the view of agency officials. “They’ve pretty well made their determination already about the project, despite our efforts. We’re opposed to the site and concerned about the impact to Flora Bank and the future of our food supply,” he said.

Mr. Williams and Garry Reece, the former mayor of Lax Kw’alaams, urged the environmental assessment agency in July to extend the regulatory review by at least another four months. But Mr. Williams said the federal agency has rejected that request.

In an interview, [Dr. Patrick McLaren, a geologist who is president of SedTrend Analysis Lt.d, who wrote a new report last month commissioned by the Gitanyow, criticizing the assessment agency’s analysis,.] said Pacific NorthWest LNG presented flawed information to the regulator. He argues that there have been ample scientific studies dating back to the 1970s that conclude Flora Bank should be left undeveloped due to the environmental risks. [Colored & bold emphasis added.]

Pair of pipelines gain environmental approval (Aug 9) — The Mirror, Dawson Creek, BC

Woodfibre LNG's Eagle Mountain pipeline and Pembina's Plateau Pipeline expansion both get green light from the province

Pembina-owned Plateau Pipeline Ltd.'s Northeast B.C. expansion is set to add 75,000 barrels a day of condensate natural gas liquids to the company's system, while the Eagle Mountain-Woodfibre Gas pipeline is another step towards constructing B.C.'s first liquefied natural gas export terminal.

Both projects will require various federal, provincial and local government permits before construction can begin.

Regulator approves pipeline tied to Woodfibre LNG project in Canada (Aug 9) — Reuters Canada

VANCOUVER (Reuters) - British Columbia's environmental regulator on Tuesday approved a natural gas pipeline that would feed gas to the proposed Woodfibre LNG project, but attached 30 conditions to the line's construction.

Woodfibre LNG, a small-scale natural gas export terminal backed by Indonesian billionaire Sukanto Tanoto's RGE Group, was approved by federal regulators in March. The company has not yet made a final investment decision.

Washington

Washington County shocks Big Oil with ban on fossil fuel exports (Aug 12) — Common Dreams

Coastal Whatcom County, known for welcoming industry, surprised oil executives and environmentalists alike with 60-day fossil fuel export moratorium

In an unprecedented gesture hailed by environmentalists, Washington's Whatcom County enacted an emergency 60-day moratorium on fossil fuel exports late Wednesday.

Environmentalists and industrialists were both shocked by the move from the coastal county once known as "Wide Open Whatcom" for its welcoming of oil refineries and a massive aluminum smelter.

"The moratorium applies to 'all forms of crude oil whether stabilized or not, raw bitumen, diluted bitumen and syncrude; coal; methane, propane, butane and other 'natural gas' in liquid or gaseous form,'" reports seattlepi.com.

Conservation group Stand, formerly ForestEthics, wrote in a statement that the move "temporarily prevents permitting for new projects that would allow the shipment or export of crude oil, coal, or liquefied natural gas (LNG) from Cherry Point. The emergency moratorium was put into place while the county finalizes a Comprehensive Plan update that will inform future zoning regulation changes that could prevent permits for new projects facilitating the export of crude oil, coal, or fracked gases."

"Tonight, our county council sent a powerful message that Whatcom County won't be a waystation for pipelines and deadly coal and oil trains," Krogh added. "We choose public safety, we choose a just and swift transition to clean energy. We also choose climate stability—coal and oil industry plans for Cherry Point would have caused twice the amount of carbon pollution that the entire state of Washington currently emits." [Colored & bold emphasis added.]

Oregon

Jordan Cove LNG backers see movement on EPC, tolling contracts (Aug 5) — Natural Gas Intelligence [Paid subscription]

While FERC action on a rehearing request is still pending, backers of the Jordan Cove liquefied natural gas (LNG) project along the south-central coast of Oregon said Thursday that they expect to have two engineering, procurement, construction (EPC) contracts for the project and additional tolling agreements in place later this year.

The rehearing request at the Federal Energy Regulatory Commission is complex, Veresen Inc. CEO Don Althoff said during a conference call with analysts Thursday. "FERC is wrestling with a policy issue, so we don't have a lot of precedent and it is hard to speculate about exactly when [a decision might be coming]," Althoff said. [Colored & bold emphasis added.]

Webmaster's comment: The policy issue FERC is wrestling with may have to do with the agency never before denying an LNG terminal permit for environmental reasons. Actually, FERC denied the Jordan Cove LNG terminal project because the company had no customers, and the environmental impacts could not be justified without such customers. In other words, environment ranks second place after the applicant's profitability.

That is the real policy issue FERC is wrestling with.

Canada

Editorial: NEB has a credibility problem (Aug 9) — Montreal Gazette, Montreal, QC

As a marathon of hearings kicks off in New Brunswick examining the merits of TransCanada’s $15.7-billion, 4,500-kilometre Energy East pipeline, the National Energy Board is facing a credibility problem of its own making.

The NEB is the quasi-judicial, federal panel charged with recommending whether Energy East should get a green light. It is supposed to be an independent, neutral authority weighing the blockbuster project’s economic benefits against the safety, ecological and social risks of a pipeline carrying Alberta crude across prairies, through cities and under waterways to eastern ports.

But before the hearings commenced Monday, the NEB has undermined its own impartiality.…

Media coverage revealed all three NEB board members met with former Quebec premier Jean Charest in 2015 while he was acting as a consultant for TransCanada leading up to the hearings. Initially it was stated that they were seeking his political advice and that Energy East was not discussed. But the body was forced to backtrack after an access to information request uncovered notes that clearly show the pipeline proposal was broached.

The fact that the energy board was conducting closed-door sessions at all is questionable. The NEB met not only with Charest, but with business leaders and select environmental groups in private. Although the board insists the topic up for discussion was the process more than the substance of Energy East, we have only their word to take for it.

The NEB has many of the powers of a court of law, such as holding hearings, collecting evidence, examining witnesses and issuing enforceable decisions. Its panellists ought therefore to know that for justice to prevail it must be seen to be done. Instead the board members have themselves created a perception of bias. [Colored & bold emphasis added.]

Webmaster's comment: The NEB and FERC are mirrors of each other.

Canada: Federal Government gives details of plan to "modernize" the NEB (Jul 4) — Mondaq

On June 20, 2016, the Federal Government announced a "comprehensive review of environmental and regulatory processes" to be undertaken in the coming months. According to the Government's Press Release, this is the next step in recognizing a commitment to review and restore confidence in Canada's environmental and regulatory processes. The first step in that process was the Government's February 2016 announcement of an interim approach and five principles to apply to in-progress infrastructure reviews (discussed in an earlier post). The interim approach will remain in place while the current review proceeds. [Colored & bold emphasis added.]

Webmaster's comment: Modernization is less needed than regulatory integrity.

Canada: Canada's Environmental Assessment process review adds uncertainty for approvals (Jul 3) — Mondaq

On June 20, 2016, the Federal Government launched a comprehensive review of Canada's environmental and regulatory approval process. The announcement comes on the heels of the Government's new interim rules for natural resource projects, which included more community and indigenous consultations and a commitment to assess and publish upstream greenhouse gas emissions.

As part of the review, the Government will appoint two expert panels to examine the environmental assessment process, the role of the National Energy Board (NEB), the Fisheries Act, and the Navigation Protection Act. There will also be a 30-day window for the public to comment on the mandates of the two expert panels. The Government has indicated that consultations will be at the core of this process and that the expert panels will be given a January 31, 2017 deadline to render their recommendations. Until then, the interim rules for resource projects will guide decision making on existing projects such as the Energy East pipeline.

It is … unclear whether the interim rules, review process, and eventual overhaul will have the desired effect of restoring public confidence in the approval process for pipeline projects like Energy East. Will more regulation in the environmental assessment process and the NEB lead to more confidence in the regulatory system? [Colored & bold emphasis added.]

United States

FERC has options for getting work done with only 3 members (Aug 12) — SNL

Can FERC still get its work done even if it has just three sitting members and one of those commissioners has a legal conflict in a particular proceeding?

Several news outlets expressed concern that the agency may not be able to do so in the wake of Commissioner Tony Clark's recent announcement that he will be leaving FERC after its September open monthly meeting. His departure will leave just three commissioners, all Democrats, which is the bare minimum needed to vote out orders under statutory federal agency quorum requirements.

Pursuant to those requirements, a recusal — or, as FERC describes it, "not participating" — is not considered a vote. So what happens if one of the three remaining commissioners, most likely Colette Honorable, who is the newest, has to recuse him/herself from voting on an important proceeding due to a prior involvement in the matter?

A fuzzier option, according to a FERC source, is for the "conflicted" third member to vote "present" on an order rather than recuse him/herself. A previous commissioner, Nora Mead Brownell, voted present on a series of orders involving the California energy crisis — including one related to Enron's attempt to collect contract terminations fees — when the agency had just three sitting members. [Colored & bold emphasis added.]

Webmaster's comment: FERC's New Math:

Question: When does 2 = 3?

Answer: When FERC says so.

Will Congress ever reign in this runaway agency?

EIA says U.S. gas output to rise on higher prices, LNG exports (Aug 10) — LNG World News

According to the EIA, LNG gross exports are expected to rise to an average of 0.5 Bcf/d in 2016, with the startup of Chenier’s Sabine Pass liquefaction and export plant in Louisiana, which sent out its first cargo in February 2016. EIA projects that gross LNG exports will average 1.3 Bcf/d in 2017, as Sabine Pass ramps up capacity.

New climate guidance a 'starting point' as FERC weighs expanding reviews (Aug 4) — SNL

FERC could soon go deeper on environmental reviews under a White House climate directive years in the making.

The agency will determine the degree to which it expands reviews of proposed energy infrastructure under the new Council on Environmental Quality guidance, but many observers expect that the commission and permit applicants will have to do more.

The Obama administration issued the final guidance Aug. 1 after years of development. The guidance asks all federal agencies, FERC among them, to crunch more numbers and take a wider view when calculating potential climate effects in all current and future reviews under the National Energy Policy Act, or NEPA. FERC conducts NEPA reviews and issues environmental impact statements or environmental assessments for proposed natural gas pipelines, LNG export terminals and other energy infrastructure projects.

A lawyer suggested that the effects on FERC and other agencies could be subtle. The guidance is not binding on federal agencies, Dorsey & Whitney LLP attorney Michael Drysdale said in an email. "However, federal agencies that depart from its recommendations may be vulnerable to legal challenge if they do not provide a clear and reasoned explanation for their decisions," he said. [Colored & bold emphasis added.]

Webmaster's comment: We can imagine that this new requirement really burns FERC's butt.

White House guidance pushes broad look at climate impacts in NEPA reviews (Aug 2) — SNL

The Council on Environmental Quality's, or CEQ's, guidance aims to aid agencies in considering the effect of greenhouse gas emissions on climate change when evaluating decisions related to NEPA. The guidance, the CEQ said, is to provide greater clarity and consistency in how the federal government addresses climate change when assessing the environmental impact of federal action.

The CEQ also wrote in its memo, which is not legally binding, that NEPA does not require monetizing costs and benefits. Further, it said weighing merits and drawbacks of the various alternatives "need not be displayed using a monetary cost-benefit analysis and should not be when there are important qualitative considerations."

The guidance could be problematic for industries associated with higher output of greenhouse gas emissions. Even if a single gas well, coal mine or power plant, for example, is expected to have a relatively small impact in the grand scheme of global climate change, the guidance says the agency should recognize that climate change effects add up.

"CEQ recognizes that the totality of climate change impacts is not attributable to any single action, but are exacerbated by a series of actions including actions taken pursuant to decisions of the federal government," the guidance said. "Therefore, a statement that emissions from a proposed federal action represent only a small fraction of global emissions is essentially a statement about the nature of the climate change challenge, and is not an appropriate basis for deciding whether or to what extent to consider climate change impacts under NEPA."

The U.S. EPA cited the draft guidance when prodding FERC to make changes in its review process on climate impacts of natural gas infrastructure. … The role of NEPA even reared its head in the debate over construction of building export facilities and the potential climate impacts of exporting fuels. [Colored & bold emphasis added.]

Webmaster's comment: FERC will continue its convoluted dance around complying with this guidance.

CEQ NEPA guidance “another hurdle” for U.S. LNG exports, CLNG says (Aug 3) — LNG World News

The White House Council on Environmental Quality released … its final guidance for federal agencies on incorporating the effects of climate change in their National Environmental Policy Act (NEPA) reviews.

The guidance creates “greater regulatory uncertainty that will hold the American LNG industry back at a time when it faces fierce competition from LNG projects in other countries that are rapidly coming online,” Charlie Riedl, Executive Director of CLNG said in a statement.

Webmaster's comment: We should feel sorry for the LNG industry?

World

Japan's Jera plans 42 percent cut in long-term LNG contracts by 2030 (Aug 10) — Reuters

Japan's Jera Co, the world's biggest importer of liquefied natural gas (LNG), is planning to cut the amount of gas it buys under long-term contracts by 42 percent by 2030 from current levels, the company's president told Reuters.

The company now buys 34.5 million tonnes per annum (mtpa) of LNG under contracts for 10 years or longer. By 2030, that will drop to about 20 million mtpa, President Yuji Kakimi said.

The company's cuts in long-term purchase puts question marks over planned large-scale, multi-billion dollar LNG production projects, which rely on long-term contracts to gain financing. Asian LNG markets are also suffering through a 72 percent slump in prices since February 2014. [Colored & bold emphasis added.]

2016 August 2