"For much of the state of Maine, the environment is the economy"
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2016 August 13
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.
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.
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.
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.]
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.]
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.]
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.
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.]
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.]
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 (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.
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.]
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.]
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.
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.
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.]
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.
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.
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.
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.]
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?
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.
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.
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.
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?
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
A FERC complaint regarding a plan by New England states to have retail customers help finance new natural gas pipelines in the region was sharply rebuked by ISO New England Inc. and most other non-generator interests in the region.
At least four states are considering the financing plan due to concerns that the region's gas pipeline system may be inadequate to meet the increasing need for the fuel to heat homes and generate power due to the retirements of coal-fired, oil-fired and nuclear generation in the region.
The problem is that many independent gas-fired generators in New England do not have firm contracts for fuel supplies because those contracts can be costly, and without those contracts, pipeline companies will not expand their systems to meet the needs of those generators.
A previous effort to address the problem by having the costs associated with a new pipeline paid for under a FERC-regulated ISO-NE tariff fell apart in summer 2014 because of a lack of support by stakeholders and state officials. Some New England states therefore have been trying to find ways to fund significant pipeline expansion projects through retail power rates.
One such project is being pursued by subsidiaries of Eversource Energy and National Grid plc, which have teamed up with Spectra Energy Corp on the Access Northeast Project. The retail ratepayers of the subsidiaries, which would own 60% of the project, would help fund the roughly $3 billion cost by paying a fixed rate for the pipeline's capacity for 20 years.
Crying foul, NextEra Energy Resources LLC and a group of generating subsidiaries of Public Service Enterprise Group Inc. — which participate in the ISO-NE's markets but do not burn natural gas or are not on any planned "subsidized" pipelines — filed a joint complaint with FERC.
Weighing in, ISO-NE told FERC that it strongly opposes the complaint, stressing the potential broad ramifications of the commission granting it.… [Colored & bold emphasis added.]
In a letter to the Federal Energy Regulatory Commission (FERC), Massachusetts Senators Elizabeth Warren and Ed Markey demand new answers about an alleged conflict of interest in the environmental review of a proposed Spectra Energy natural gas pipeline project.
As DeSmog first reported, the Environmental Assessment (EA) for Spectra’s Atlantic Bridge project was carried out on FERC’s behalf by third-party contractor Natural Resource Group (NRG), which at the time was working directly for Spectra on a related pipeline, PennEast. Following these revelations, Sens. Warren and Markey demanded explanations from FERC Commissioner Norman Bay, urging him to issue a new and objective review for the project.
“Did Spectra or NRG disclose any potential conflicts of interest to FERC? If not, did FERC conduct an independent review to determine whether claims that no conflict of interest exist were valid in this instance?”
NRG, which also performed the Environmental Impact Statement for AIM, was working for Spectra at the time of its hiring by FERC as third-party contractor. During the review of AIM [Algonquin Incremental Market], Spectra then hired NRG directly for no less than five other of its projects, potentially incentivizing the contractor to provide a beneficial assessment for AIM. [Colored & bold emphasis added.]
Webmaster's comment:FERC is no stranger to conflict of interest. FERC regularly hires "FERC Contract Staff" whose salaries are paid by applicants in the FERC permitting process. Example: Downeast LNG pays the salaries directly to the company (Tetra Tech EC, Inc.) whose personnel work as FERC Contract Staff in preparing the FERC Downeast LNG Environmental Statement.
The second train at Cheniere’s Sabine pass liquefaction and export plant in Louisiana has started producing liquefied natural gas, according to analytics firm Genscape, that has infrared cameras pointed at the facility.
Genscape said in the notice it now expects the second liquefaction train to have three months of startup where the engineering procurement and construction checklist is completed allowing for the sign over from LNG engineer Bechtel to Cheniere.
The U.S. Department of Energy issued two orders on Friday authorizing Lake Charles LNG Export Company, LLC and Lake Charles Exports, LLC to export a total of 730 Bcf/year (2.0 Bcf/day), or 15 million metric tons per annum, of LNG over 20 years to nations without a Free Trade Agreement (non-FTA) with the United States from the proposed Lake Charles LNG export terminal in Calcasieu Parish, La. Regarding environmental issues associated with the export applications, DOE adopted FERC’s Final Environmental Impact Statement for the Lake Charles LNG export terminal project which concluded that construction and operation of the project would result in adverse environmental impacts but most impacts would be reduced to less-than-significant levels. [Colored & bold emphasis added.]
The U.S. Federal Energy Regulatory Commission has granted environmental approval for the proposed $10 billion Golden Pass LNG export project to be built at the existing import facility in Sabine Pass, Texas.
The LNG export project would have “no significant impact on the environment when recommended mitigation measures are implemented,” FERC said in its final environmental impact statement.
The project has received U.S. Department of Energy authorization for exports to free trade agreement countries and awaits DOE authorization to export to non-free trade agreement nations. [Colored & bold emphasis added.]
Webmaster's comment: How is it possible that absolutely every LNG terminal project that goes before FERC is determined to have no significant environmental impact? What are the odds that every LNG terminal project site selection has been perfect?
As one project after another is shelved, the provincial government is short on alternatives
But one by one, LNG proposals have been falling like dominoes as companies have shelved or deferred projects.
There are other uses for natural gas – methanol production, for example. But so far, it doesn’t look like the provincial government is giving much thought to anything but LNG.
At the recent Canada LNG Export Conference in Vancouver, industry stakeholders and experts from across the complete LNG value chain made clear that Aboriginal consultation must be the top priority for LNG proponents in Canada.
Last October, Finance Minister Mike de Jong predicted: “We are poised to see the final steps taken. Every step of the way, there have been detractors and naysayers and people who have dismissed the opportunities.”
Those final steps hit a speed bump last Friday when the Hawaii Public Utilities Commission nixed NextEra Energy’s proposed $4.3 billion purchase of Hawaiian Electric Industries.
The merger was kaput. The export deal – a long shot at best – was pronounced dead this week.
B.C.'s long-promised pot of liquid gold has now passed through pretty well all the spin cycles.
Despite countless reports that the world faces a glut of LNG, the government's website to this day proclaims that “Global trade in liquefied natural gas doubled between 2000 and 2010 and is expected to increase by another 50 per cent by 2020.”
In its November 2014 World Energy Outlook, the IEA reported that Canadian LNG costs could be among highest in the world, pegging the export price at between $13 and $14/MBtu (million British thermal unit). LNG's spot price is currently less than $5.00 MBtu.
There's an upside for the government. The public never bought the hype in the first place. [Colored & bold emphasis added.]
Beguiled by the petroleum industry’s promises of new investment and jobs, the Clark government has repeatedly proved itself a patsy in acceding to the LNG industry’s every demand.
In the process, it has subjugated B.C.’s global-leading 2008 climate action plan to its misguided vision for the unchecked exploitation of non-renewable natural gas.
It has broken its own law, in failing to meet B.C.’s legislated targets for provincial greenhouse gas reductions.
This analysis explores how that taxpayer-subsidized boon to Big Oil stands to be further entrenched under the recommendations for updating B.C.’s climate action plan last fall by the government’s handpicked Climate Leadership Team (CLT). [Colored & bold emphasis added.]
In a letter to the Canadian Environmental Assessment Agency on July 22, representatives of a group calling itself the Allied Tsimshian Tribes of the Lax Kw’alaams, and the Gitanyow Hereditary Chiefs, say more time is needed to properly consult them as hereditary chiefs and address their environmental concerns by collecting more scientific evidence and evaluating it with them.
Their argument is that consultation has taken place with band councils but not the proper land and aboriginal rights holders.
“The Crown has provided a process of deep consultation to the six area Indian Act bands while ignoring the hereditary tribes and houses whose aboriginal rights and titles will potentially be infringed by the project,” said the letter to CEAA signed by Garry Reece for the Allied Tsimshian Tribes of Lax Kw’alaams and Glen Williams of the Gitanyow Hereditary Chiefs.
Robin Junger, a lawyer with McMillan in Vancouver who specializes in aboriginal and environmental law, said the latest development raises an important question on consultation.
In some cases, band councils may have the authority to speak on behalf of a First Nation people, but generally that right rests with the collective grouping of people with a common language and culture.
Hereditary chiefs of the Gitwilgyots, including Donald Wesley, known as S’mooygyet Yehan, have said Lelu Island is off limits to LNG development because of concerns about Flora Bank.
Added to continuing low global gas prices, news of the abandonment of a potential deal that would have seen a massive investment in liquefied natural gas to power electricity in Hawaii led to local LNG-opponents predicting the failure of Woodfibre LNG.
On July 15, it was announced a potential deal between Fortis Hawaii Energy and Hawaiian Electric Companies, which would have seen natural gas supplied by an expanded Tilbury Island liquefied natural gas facility in Delta, would not go ahead. Asserting a preference for renewable energy to power the island state, Hawaii’s Public Utility Commission denied a takeover of the electric company that would have paved the way for the LNG investment.
“Hawaii’s commitment to a fossil-free renewable energy future was unshaken – a commitment sorely lacking in B.C.’s government,” said Eoin Finn, of the anti-LNG group, My Sea to Sky.
…Dermod Travis, executive director of IntegrityBC, which bills itself as a political watchdog organization, referenced the dead deal as “another setback” in the plans for a burgeoning LNG industry.
“When you look at what our costs are and what the spot price is, it is going to have to be a real big rebound before any potential LNG plant is going to be profitable,” Travis said.
“Woodfibre thinks that somehow because they are going to be small that that means they will be an exception to all the other economic rules of the industry,” he said, adding that in his view, smaller producers are higher-cost producers. [Colored & bold emphasis added.]
U.S. natural gas traders may be in for a bumpy ride.
Price swings in the gas market have been fairly muted over the past two years as abundant output from shale basins kept futures trading within a narrow range. That’s about to change as the U.S. boosts exports of the fuel in the form of liquefied natural gas, leading to potential supply constraints in the colder months, according to EBW Analytics Group.
Booming shale production has put the U.S. on course to export more gas than it imports by mid-2017, the first time that’s happened in 50 years. That could limit supplies to domestic buyers in the winter, making the market vulnerable to price spikes when demand for the heating fuel is highest.
Within five years, the International Energy Agency expects the U.S. to become the third-largest LNG supplier in the world. As of July 15, the U.S. Department of Energy had given 18 authorizations for projects to export as much as 13.22 billion cubic feet a day of gas to countries that don’t have free-trade agreements with the U.S.
“As more and more coal plants retire, that safety valve to moderate and to modulate price swings is shrinking very dramatically,” Weissman said. [Colored & bold emphasis added.]
Webmaster's comment: This illustrates one good reason why the mad rush to export LNG has been a bad idea.
House Republicans want the Interior Department to drop plans to regulate methane emissions on federal lands.
The Interior Department released new methane standards for oil and natural gas drilling on federal land in January, looking to restrict accidental or deliberate methane leaks at sites and restricting the burning, or flaring, of gas that isn’t captured there.
The rule is part of a government-wide effort to restrict leaks of methane, the main component of natural gas and a powerful greenhouse gas.
Opponents of the effort, including Republicans and the drilling industry, say drillers have done a good job of restricting emissions on their own, and that they have a financial incentive to capture as much methane as they can by delivering natural gas to market. Republicans’ call for quicker permitting of transmission lines is a component of that argument. [Colored & bold emphasis added.]
On July 21, 2016, the U.S. District Court for the District of Massachusetts issued an order finding that Maxim Power Corp. and several affiliates and an employee (collectively, the “Maxim Respondents”) were entitled to a full trial on the merits and discovery rights. The ruling came in an action by the Federal Energy Regulatory Commission (“FERC”) seeking an order affirming FERC’s assessment of significant civil penalties against Maxim for alleged violations of the Federal Power Act’s (“FPA”) prohibition on market manipulation and related FERC rules. … Noting that a process in which FERC acts as both investigator and judge is inherently biased, the court found that due process requires that the FPA’s reference to de novo review of a FERC penalty assessment be interpreted in a manner that ensures that respondents in FERC enforcement actions be afforded an opportunity to a full hearing and discovery rights at the district court stage.
…The court also noted that the fact that FERC performs both an investigatory and adjudicatory function under its existing enforcement processes creates “an inherent bias in the decision making process, even if that bias is entirely unintentional and even if the combination of functions does not alone violate due process.” … [Colored & bold emphasis added.]
Tim Kaine is no Bernie Sanders, and his positions on energy issues illustrate that point. While Hillary Clinton’s running mate supports policies to address climate change, he’s also been supportive of his home state’s coal industry, offshore drilling in the Atlantic and of LNG exports. He teamed up with Wyoming Republican John Barrasso to sponsor a bill that would require the Department of Energy to decide on an LNG export application within 45 days.On offshore drilling, Kaine campaigned for the Senate criticizing Interior’s earlier decision to leave Virginia out of its five-year drilling plan and promising to pursue legislation to allow that production.…
Discoveries of oil and gas in new regions in the U.S. typically bring the need for additional pipelines to take the resources to market. But with natural gas production booming in the past 10 years, industry experts believe that increased use of gas for power generation and deference by regulators may result in a potential overbuild of pipeline infrastructure.
"Back in 2012 or 2013, maybe production did overwhelm infrastructure, but if you see where we're headed, pretty soon infrastructure is going to overwhelm Marcellus," Elefant said. "There have already been some reports questioning whether there is enough gas in Marcellus to sustain all of these pipelines."
FERC has increasingly relied on information supplied by pipeline operators in making decisions to grant approvals, and the issue has manifested itself through exports of liquefied natural gas.
Another problem with overbuild is pipeline abandonment, which could leave abandoned infrastructure on private property. Elefant said that FERC does not require pipelines to put up money for potential decommissioning or make plans for abandoning them down the line.
"If you have companies that are overbuilding, then by definition, there's no need," Elefant said. "The constitution says you can only take private property with just compensation and if there's a public need."
Elefant said that the determination of need and the certificate that authorizes the taking of property are done at FERC, so that once a pipeline company has that certificate and uses it in an eminent domain proceeding, the landowner has little ability to challenge it. Such challenges are considered to be collateral attacks on a FERC decision.
"FERC really needs to take a closer look at need on a case-by-case basis," Elefant said. "The best way to do that is to have adjudicated hearings again." [Colored & bold emphasis added.]
CALGARY — The passage of two LNG tankers through the Panama Canal on [July 25 and 26] marked a long-expected shift in global LNG shipping patterns, albeit one that comes amid a souring outlook for natural gas markets that has already hampered projects in the U.S. and British Columbia.
The expansion of the canal, which was widened and re-dredged to allow much larger vessels to pass through, will significantly reduce the cost of shipping liquefied natural gas to Asian markets from Atlantic waters. Before the expansion, the oversized LNG carriers were forced to travel around South America to reach some of the biggest LNG markets like Japan and South Korea.
Even so, the expansion will have a limited effect on the economics for new LNG developments on Atlantic coastlines like the U.S. Gulf Coast. “The way the global market has changed the last couple of years, and all of the supply that’s coming on, its significance is going to be less than what was thought at the time,” says Robert Ineson, the managing director for North American natural gas at IHS Energy.
Demand for the product is waning in most Asian markets that were largely responsible for bringing about the initial surge of demand. The five largest markets in Asia have seen decreased imports of LNG for four consecutive years, according to the International Energy Agency. [Colored & bold emphasis added.]
Shell-chartered Maran Gas Apollonia-measuring 289 meters in length and 45 meters in beam-arrived Monday from the Sabine Pass LNG Terminal on the U.S. Gulf Coast, signaling the arrival of the highly-anticipated segment to the waterway.
The Expanded Canal can accommodate 90 percent of the world's LNG tankers, which will have a major impact on global LNG flows and offer numerous benefits to shippers.
For example, with the United States poised to become one of the world's top LNG exporters in the next five years, the Canal will allow vessels departing the U.S. East and Gulf Coast for Asia to enjoy significant reductions in voyage times (up to 22.8 days roundtrip), making U.S. gas deliveries to major Asian importers very competitive. Vessels departing the U.S. Gulf Coast for the West Coast of South America will similarly experience generous time savings.
In addition, LNG ships from the production plants in Trinidad and Tobago could head to Chile where LNG is regasified and distributed for energy-producing purposes. For this route, the Expanded Canal provides savings of 6.3 days in transit time compared to the Magellan Strait.
The global natural gas glut could get much worse if China has its way.
The spot prices for liquefied natural gas (LNG) have plunged in recent years, falling by more than 75 percent from the 2014 highs. Too much supply has run headlong into a market that has seen demand slow significantly.
But China could make things much worse. In an effort to find a domestic source of energy, and clean up its horrific air pollution problems by shutting down coal plants, the top state-owned energy companies are scrambling to develop shale gas.
…If China ramps up shale gas production, it might not need nearly as much imported LNG as everyone expected. That would put billion-dollar investments at risk, such as ExxonMobil’s recent $2.5 billion offering for InterOil, a company that has gas assets in Papua New Guinea and will allow the oil major to expand LNG exports from that country. Or, Royal Dutch Shell’s $54 billion purchase of BG Group could turn out to be a major loser if LNG markets remain depressed for years to come, something that would be more likely if China succeeds in developing a successful shale gas industry. [Colored & bold emphasis added.]
Utility seeks to reduce shipping costs through LNG swap deals
Tokyo Gas Co., Japan’s second-biggest buyer of liquefied natural gas, is in talks with European companies to swap cargoes it owns from the U.S. with those in Asia to reduce shipping times and costs.
The utility is offering cargoes from the Cove Point project on the U.S. East Coast, which is expected to start up late next year and from which its contracted to buy 1.4 million tons a year, Executive Officer Kentaro Kimoto said in an interview. Kimoto declined to identify European companies Tokyo Gas is in talks with and the volume it would be resell
Japan is among countries forecast to have an LNG oversupply in coming years, transforming some of the world’s biggest buyers of the fuel into sellers. Jera Co., a joint venture between Tokyo Electric Power Co. Holdings Inc. and Chubu Electric Power Co., plan to announce a second flexible deal by the end of this year that would allow it to resell the fuel to European customers as it seeks outlets to offset possible demand declines at home.. [Colored & bold emphasis added.]
“This is likely just a short-term uptick in spot prices,” said Gautam Sudhakar, IHS Markit Ltd.’s Washington D.C.-based director of global LNG. “In addition to the resolution of these temporary supply outages, there is a lot more capacity coming into the market and ramping up in 2017. Supply growing faster than demand should prevent a strong uptick in prices.”
The rally in spot prices has been aided by supply disruptions. Chevron’s Angola LNG plant shut for maintenance and isn’t expected to restart until late September. The company suspended output at its Gorgon project twice this year after it began operation in April.
In addition to those plants resuming output, new supply should come online later this year from a second production train at the Australia Pacific LNG project on Curtis Island, a second train at Gorgon and a second train at Sabine Pass. Cheniere Energy Inc. will shut the first production train at its Sabine Pass terminal in Louisiana in September for planned maintenance. [Colored & bold emphasis added.]
The future for gas companies is looking grim and this means market forces will effect what our governments should have done and force the industry's closure, says Lachlan Barker.
THE FINANCIAL REPORTING news for Queensland’s liquefied natural gas (LNG) companies is disastrous – for yet another quarter.
The price they are getting for LNG is down to US$5.19 (AU$6.93), from US$8.94 for the full year 2015 and down already from the first quarter price in 2016, of US$6.24.
This puts the LNG that Santos are exporting from their Queensland GLNG plant at well below profitable.
…Santos was losing close to US$2 per gigajoule shipped.
Since [Origin and Santos are] going to be exporting LNG at a loss/break even for the foreseeable future – scratch that, forever, with forever being the life of the project – it’s clear they will never be able to put a dent in that debt pile using profit from Queensland LNG. [Colored & bold emphasis added.]