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Passamaquoddy Bay & LNG

New Brunswick

Irving Oil’s and Repsol’s expensive lesson about LNG — The Globe and Mail, Toronto, ON

Spain’s Repsol SA and its junior partner Irving Oil Ltd. found themselves caught on the wrong side of the rapid transformation in the North American energy market from import-dependent to export-oriented.

Located at the tip of Saint John’s Mispec Point in the Bay of Fundy, Canaport LNG began importing liquefied natural gas in 2009 just as the continent’s shale gas production was exploding and plans for several LNG import facilities across North America were being shelved.

The facility now operates at a small fraction of its name-plated 1.2-billion-cubic-feet-a-day capacity, with only the occasional ship docking at the site, although there are a few more in winter when the plant can send gas by pipeline to New England.

But future U.S. sales are threatened as pipelines companies rush to connect the northeast region with the prolific and low-cost Marcellus shale gas field that is producing in Pennsylvania, West Virginia and Ohio. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG is playing hookey, failing to learn this lesson.

Northeast

Christie signals Port Ambrose Jersey Shore LNG project could be vetoed — NJ.com, NJ

The Liberty Natural Gas Port Ambrose terminal is being considered by federal regulators, but Governor Chris Christie could veto the project at any time – and he said he would consider doing so Tuesday afternoon.

“I vetoed that once already, they’re coming back again now,” Christie said. “I’m very concerned about making sure we protect our coastline.”

In 2011, Christie vetoed a nearly identical proposal to build a terminal in between shipping lanes into the Port of New York and New Jersey, citing threats to the state economy. [Red & bold emphasis added.]

Debate continues over natural gas port (Aug 29) — The Hub, Manalapan NJ

LONG BRANCH — Controversy continues to build over a proposed natural gas port off the coast of New Jersey and New York.

Throughout the last two months, thousands of activists, residents and area officials filed an estimated 10,000 official comments with federal agencies regarding the project, which calls for two submerged buoys and 19 miles of sub-sea pipe approximately 24 miles off the coast of Long Branch.

On Aug, 20, state Sen. Jennifer Beck (RMonmouth) introduced a resolution calling on New York and New Jersey officials to join her in rejecting the proposal.

USA: LNG project faces opposition, people want offshore wind (Aug 27) — OffshoreWind.biz

The Natural Resources Defense Council (NRDC), along with other environmental organizations and with a large public support, has submitted a letter to the U.S. Maritime Administration in response to the agency’s request for public comments on a proposed liquefied natural gas (LNG) project off the coast of New Jersey and New York.

NRDC opposes the Port Ambrose LNG project because an offshore wind project has been proposed for the same area in the ocean....

USA: Environmental groups oppose Port Ambrose LNG project (Aug 26) — LNG World News

Environmental Groups led by The Natural Resources Defense Council (NRDC) and Clean Ocean Action submitted letters with the U.S. Coast Guard (USCG ) and the U.S. Maritime Administration (MARAD), regarding the environmental impact of the Port Ambrose LNG import terminal.

Liberty Natural Gas LNG proposal off NY & NJ coast (Jul 22) — Center for Environment, Commerce & Energy, Washington, DC

Liberty Natural Gas LLC is asking the federal government for permission to build a facility where ships carrying liquefied natural gas (LNG) would dock, vaporize the gas and pump it into the New York City area. The company says it will never use the $300 million terminal in the Atlantic Ocean to export the gas overseas.

Liberty, based in Manhattan wants to serve a niche market in the New York City area, where winter prices rise because pipeline capacity falls short of demand.

Webmaster's comment: Like Downeast LNG, the above proposal is unnecessary due to the abundant supply of domestic natural gas. Pipeline expansion from the nearby Marcellus Shale is a superior long-term solution to both projects.

Note: The Center for Environment, Commerce & Energy has supported numerous US LNG import projects.

Heat comes back, prices stand up, Marcellus roars (Aug 23) — Platts

Heat ignited natural gas NYMEX prices to three-week high, Marcellus production soars again, and changes are coming to Mexico’s oil and gas regime. Platts Gas Daily editors Rodney White, Bill Holland, and Stephanie Ritenbaugh (in Pittsburgh) discuss. [Red & bold emphasis added.]

Webmaster's comment: The soundfile on the above page indicates that the Marcellus is producing enough natural gas to supply the entire US Northeast!

BCG: US manufacturing and LNG exports are not a zero sum game (Aug 26) — LNG World News

Another report on natural gas released last week by the Boston Consulting Group titled “Behind the American Export Surge: The U.S. as One of the Developed World’s Lowest-Cost Manufacturers”....

Cheap and abundant natural gas has the potential to boost our economy in other ways as well. Some question if America can sustain this manufacturing recovery while also exporting U.S. natural gas, fearing liquefied natural gas (LNG) exports will drive up domestic natural gas prices. This concern is unwarranted. The BCG study projects U.S. shale-gas production will double to 12 trillion cubic feet by 2035 – more than enough for domestic industry and for exports. Furthermore, economic studies released by the Department of Energy and a host of other groups have found that even in the highest export scenario (up to 16bcf/day), there will not be a significant impact on US natural gas prices. In fact, studies find that increased LNG exports will support more production in towns across the country delivering greater benefits – local jobs, tax revenues, and growing supportive industries. The domestic manufacturing renaissance and LNG exports are not a zero sum game but instead both are significant economic opportunities that must be harnessed in the years to come.

Oregon

Oregon LNG refutes Clatsop County preemption claims (Aug 27) — LNG Law Blog

Oregon LNG filed an answer to Clatsop County, Oregon's and others' motions to intervene in its FERC LNG terminal application docket. In its answer, Oregon LNG argues that the Clatsop County land use permitting requirements are preempted by the Natural Gas Act (NGA) and that existing legal precedent clearly establishes that Clatsop County may not use its land use regulations to veto a pipeline's construction in a manner that conflicts with FERC's exclusive siting authority under the NGA. The answer also addresses, among other things, FERC's authority to issue conditional orders and issues related to the Coastal Zone Management Act, the Clean Air Act, and the Clean Water Act.

United States

Report predicts higher domestic gas prices if U.S. LNG exports meet projections — LNG Law Blog

According to Oil & Gas Journal (O&GJ), a new report by Facts Global Energy (FGE) projects U.S. LNG export volumes to be higher than U.S. gas production predictions by the U.S. Energy Information Administration (EIA), resulting in higher domestic gas prices than projected by EIA. In 2020, FGE projects U.S. LNG exports to exceed EIA production projections by 34.5 million tonnes per year (tpy). In 2030, FGE projects 50 million/tpy more than EIA's projection. Based on FGE's projections, the U.S. domestic gas price in 2030 could be several dollars higher than predicted by EIA. [Red & bold emphasis added.]

FGE: US gas price sensitive to LNG exports (Aug 27) — Oil & Gas Journal

The future price of natural gas in the US depends greatly on development of LNG exports, the outlook for which remains unclear, says Facts Global Energy (FGE).

In an analysis comparing its projections for LNG exports with a base-case production forecast by the Energy Information Administration’s Annual Energy Outlook (AEO), FGE sees problems.

“Clearly, if LNG exports increase by some 50 million tpy more than projected by the AEO, US gas prices could settle at a higher plateau—perhaps $7-8/MMbtu if domestic demand remains robust,” FGE says. [Red & bold emphasis added.]

Japan aims for lower LNG prices and possible new suppliers (Aug 27) — UPI

As part of its push for cheaper prices of liquefied natural gas and more sources for imports, Japan plans to host an LNG conference next month, a government official said.

Japan now pays $16 per thousand British thermal units for LNG, while the price in the United States was only $4, Kihara said. Factoring for the liquefaction process and transport, Kihara noted that the price from the United States jumps to $11 or $12, but "that's still 30 percent cheaper than what we are paying now," he said.

Buying U.S. shale gas was like purchasing from a "supermarket" at true market prices, he added.

New US LNG export reality bucks conventional wisdom, yields new question (Jul 29) — Rigzone

The United States' newfound abundance of natural gas has answered a question that was pressing just several years ago: where will the country find enough gas to meet its growing energy demand? Now, however, another question is on the minds of many U.S. producers and large-scale consumers of natural gas: where will the country's surplus of domestically produced natural gas go? Some would like to see it sold as LNG on the world market to the highest bidder. Others advocate more limited sales of LNG only to countries that have entered into free trade agreements with the United States. In addition, this second group has argued for keeping natural gas prices stable in order to provide a competitive advantage for domestic manufacturers. Finally, a third set of stakeholders opposes large-scale LNG exports altogether. [Red & bold emphasis added.]

Alaska

Tim Bradner: Cook Inlet natural gas shortage turns into surplus (Aug 24) — Anchorage Daily News, Anchorage, AK

Explorers are finding new natural gas in Cook Inlet. Talk of gas shortages and the need to import liquefied natural gas has faded.

The possibility of a gas surplus is doubly embarrassing because the Alaska public is paying most of the costs of the new drilling through generous incentives approved by the Legislature, which was spooked by apparent shortages.

How did all this happen, and so quickly? Was there really a gas shortage? Were the utilities crying wolf when they told the public that gas might have to be imported? Were the producing companies warehousing gas they knew was there?

Webmaster's comment: The natural gas/LNG industry has had the Cook Inlet area of Alaska in an hysterical state for quite a while, claiming they would need to import LNG because they have exported all the local natural gas resource. So, the industry got money from the state to do some more drilling. Who's betting they won't start exporting LNG again — so that they'll run out once more and have another supply-shortage panic!

Northeast

Environmental groups and citizens file comments opposing Port Ambrose project (Aug 23) — LNG Law Blog

A group of environmental organizations led by Clean Ocean Action, the Natural Resources Defense Council, and numerous citizens have filed comments with the U.S. Coast Guard and the U.S. Maritime Administration opposing Liberty Natural Gas's Port Ambrose LNG import terminal application. The proposed deepwater terminal would be located offshore New Jersey and New York.

Canada

Canadian LNG projects ‘difficult to justify,’ report says (Aug 22) — Financial Post, Don Mills, ON

LNG projects proposed by San Ramon, Calif.-based Chevron Corp., ExxonMobil Corp. and others for the northwest coast of British Columbia may struggle to meet demands by overseas buyers for sales volumes linked to low North American gas prices instead of the higher-priced marker that prevails in Asia, the Norwegian-based International Gas Union said.

“Project costs in Canada far exceed counterpart projects in the United States where the natural gas market is much more liquid,” said the organization, whose 110 members represent 95% of the world’s gas market.

United States

Five theories on US LNG exports (and why they’re probably wrong) [Blog] (Aug 23) — The Barrel

DOE officials have remained tight-lipped about when the next approvals may arrive, but that has not stopped the speculation. Sources have said they wouldn’t be surprised to see a half dozen or more approvals before the end of the year. Others have said it’s not outside the realm of possibility that there will be only one more approval in that time.

In truth, no one may know for sure, but with rumors rampant, let’s take a look at five theories we’re hearing and look at why they may be wrong.

[N]early everyone familiar with the LNG issue believes that DOE will not reject any application, unless the applicant is involved in a criminal conspiracy, the US energy market collapses or some equally unlikely scenario unfolds. [Red & bold emphasis added.]

Webmaster's comment: Even criminal conspiracy would likely not deter DOE approval. In 2006 FERC publicly admitted on multiple occasions that they would issue permits to construct LNG terminals to Adolf Hitler, James Manson, or Idi Amin, if they completed the permitting process correctly. What's more, Congress does not require the DOE or FERC to prohibit sociopaths from owning or operating LNG terminals.

North America

New report on North American LNG market released (Aug 23) — LNG Law Blog

The International Gas Union has released a report on the global LNG market throughout 2012 and through the first quarter of 2013. A special report is included on the risks associated with North American LNG export proposals. According to the Vancouver Sun, the report casts doubt on the economic feasibility of western Canadian LNG export terminal prospects.

Northeast

County moves to exempt gas plant from zoning regs — TheBayNet, Hollywood, MD

A proposal to exempt the Dominion Cove Point Liquefied Natural Gas (LNG) Import or Export Facility in Lusby from the Calvert County Zoning Ordinance will be the subject of an upcoming joint work session conducted by the county commissioners and planning commission. Without taking a formal vote, the Calvert County Commissioners gave staff the green light Tuesday, Aug. 20 to move forward with the process. If the proposal is approved it would give the LNG facility a similar exemption that was granted to Calvert Cliffs Nuclear Power Plant.

County staff stated the exemption was being sought due to rigorous federal standards that must be met by the facility’s owners and operators. A synopsis of the proposal claimed the action was consistent with the county’s Comprehensive Plan since it supports building a strong economy based on renewable resources.

“We don’t have the expertise to inspect these complicated facilities,” said Commissioner Susan Shaw [R]. [Red & bold emphasis added.]

Webmaster's comment: Apparently, the Calvert County Commissioners do not comprehend the neaming of "renewable."

Beck introduces bill calling for rejection of proposed natural gas port (Aug 20) — Senator Jennifer Beck, NJ

Senator Jennifer Beck (R-Monmouth) has introduced a resolution calling on New York and New Jersey to reject the proposed Liberty Natural Gas (LNG) Port Ambrose Project. LNG has applied to federal authorities for permission to build a port in the ocean 17 miles off the coast of Jones Beach on Long Island and 24 miles off Long Branch, New Jersey. The proposal requires approval from the U.S. Maritime Administration, the Coast Guard and the governors of New York and New Jersey. Governor Chris Christie rejected a similar proposal in 2011.

“This a potential slippery slope, and while LNG contends the facility will be limited to importing natural [gas], there is no saying that they won’t expand to exporting in the future,” Beck explained. “This project could negatively impact some of the shore’s most important industries, including tourism, fishing and boating. We are still recovering from the devastation of Sandy; we should focus on rebuilding and not proposals that invite more problems.” [Red & bold emphasis added.]

Governor should scuttle LNG port [Opinion] (Aug 20) — MyCentralNewJersey.com, NJ

A company pitching a liquefied natural gas terminal off the New Jersey coast didn’t get very far a couple of years ago, when Gov. Chris Christie vetoed the plan. An amended proposal moving the project more toward the New York coast didn’t get a much better review from Christie; then-Attorney General Jeffrey Chiesa told federal officials in March 2012 that Christie remained opposed to the amended project.

We don’t know what Christie is waiting for, but we urge him to shut down this project as soon as possible. It is still as bad an idea for New Jersey as it has been all along.

This isn’t merely Not in My Backyard resistance. There’s also little evidence of any great need for the facility. This debate comes at a time when the nation is tapping into vast fossil-fuel reserves that had previously been inaccessible, thanks to a process known as “fracking” — injecting a mix of water and chemicals into the ground under high pressure — and other new drilling technologies. But obtaining them also comes with great environmental risk; the chemicals used in fracking, for instance, could pollute our waterways and watersheds.

...The Liberty Natural Gas project offers little meaningful benefit to New Jersey — or anyone else, for that matter. [Red & bold emphasis added.]

British Columbia

Missing Skeena River map spawns feedback deadline extension — Metro News, Canada

Outcry over a proposed [liquefied] natural gas (LNG) plant project description document that was missing the Skeena River has prompted the federal government to extend two deadlines for public participation.

Members of the public who wish to weigh in on what should be examined during the environmental assessment now have until Sept. 20 to provide their comments.

Northeast

NJ Senator wants to block natural gas port off Jersey’s coast — New Jersey 101.5 Radio, Trenton, NJ

Liberty Natural Gas (LNG) wants to build a port in the Atlantic Ocean just 24 miles off Long Branch and just 17 miles off Jones Beach on Long Island. LNG has applied for permission and is waiting for the decision to come from the U.S. Maritime Administration and the Coast Guard as well as New Jersey Gov. Chris Christie and New York Gov. Andrew Cuomo. A New Jersey lawmaker wants the answer to be “no.”

Today, New Jersey Sen. Jennifer Beck introduced a resolution calling on New York and New Jersey to reject the LNG’s proposed “Port Ambrose Project.” One reason given is that the port would discharge 3.5 million gallons of chemically treated sea water and requires 20 miles of sea floor dredging to accommodate the pipeline. Two years ago, Christie rejected a similar plan.

United States

US LNG export approvals should hinge on contracts, FERC process: think tank — Platts

"...[I]f a company completes its pre-filing process and contracts out a given percentage of its capacity, the exports are deemed to be in the public interest," [Brookings Institution Energy Security Initiative] wrote.

Webmaster's comment: Exactly how does completing FERC's prefiling process and having contracts to sell LNG to foreign buyers have anything to do with the US public interest? The Brookings Institution's think tank is a thinly-veiled lobbyist for the energy industry, not an advocate for the public interest. Read the full report, Revising the LNG Export Process: Policy Recommendations to Reduce Uncertainty (PDF file).

United States: The legal landscape of "fracking" - the oil and gas industry's game-changing technique is its biggest hurdle (Aug 15) — Mondaq

By the end of this decade, the United States will surpass Saudi Arabia as the world's largest oil producer, and will be nearly energy independent by 2035. This was the astonishing prediction made by the International Energy Agency in its latest World Energy Outlook report. The forecast is all the more surprising when one recalls that just a decade ago, the U.S. was thought to be running out of domestic natural gas and oil and was looking at becoming a long-term net importer. What a difference a decade makes! [Red & bold emphasis added.]

New Brunswick

It’s time for a reality check on pipeline promises [Opinion column] — The Guardian, Charlottetown, PE

Liquefied natural gas is flowing into Canaport and the pipeline still connects New Brunswick and New England. But it hasn’t turned out to be an economic bonanza, far from it. The province is still labouring under near-stagnant economic growth and the government is running massive deficits. [Red & bold emphasis added.]

Webmaster's comment: Repsol was unable to unload Canaport LNG when it sold all its other LNG assets because Canaport is losing money.

British Columbia

Pacific Northwest LNG comment period must reopen, says lawyer — The Northern View, Prince Rupert, BC

In a letter sent by counsel Andrew Gage, the two groups [West Coast Environmental Law and the Tbuck Suzuki Foundation] say the fact the Skeena River was missing from the original map filed by Pacific NorthWest LNG means some impacted parties may have missed out on providing feedback.

Webmaster's comment: It seems that Canadian LNG regulators are as public-unfriendly as US regulators.

United States

LNG exports: A chat with CLNG's Bill Cooper — Rigzone

As the head of a trade association of LNG producers, shippers, terminal operators and developers, Center for Liquefied Natural Gas (CLNG) President Bill Cooper is naturally pleased with the latest DOE action on the LNG export issue. However, he finds the pace at which DOE has rendered LNG export decisions too slow.

Cooper: It is understood that due to our abundant natural gas resources LNG exports will have a minimal impact on natural gas prices and won't undermine domestic consumers. Again, as the DOE's commissioned third-party NERA report found, "all export scenarios are welfare-improving for U.S. consumers." The geopolitical implications and effect on our trade balance have also been recognized – specifically the global economic and environmental benefits that will come when our trading partners have access to an affordable, clean-burning fuel source. [Red & bold emphasis added.]

Webmaster's comment: Center for Liquefied Natural Gas president Bill Cooper ignores the reality that exporting LNG reduces US energy security by depleting the resource.

U.S. should rethink restrictions on natural gas exports — International Business Times

Prompting this debate is the sudden domestic abundance of natural gas. Natural gas production in the U.S. has risen rapidly due to recent technological advances. U.S. natural gas prices are now highly competitive internationally, creating an opportunity for U.S. gas producers to export large quantities of liquefied natural gas (LNG). [Red & bold emphasis added.]

Top

Maine

State seeks natural gas bids again (Aug 15) — Mainebiz

The state has renewed its search for a natural gas provider in the Kennebec Valley, issuing a new request for proposals on Wednesday.

A previous attempt to find a natural gas supplier for those state buildings ended in conflict after Summit Natural Gas of Maine contested a contract award to the Brunswick-based Iberdrola subsidiary Maine Natural Gas. The state rescinded its award decision late last year because an appeals board found the state's request for proposal was not clear about the scope of the project.

Since that time, both companies have been jockeying for corporate and municipal clients in the Kennebec Valley, where construction of two separate natural gas networks is under way. [Red & bold emphasis added.]

Webmaster's comment: ...WITHOUT importing LNG. Downeast LNG is on a fool's quest.

New Brunswick

Canada: Six LNG cargoes imported in H1 — LNG World News

Canada imported six liquefied natural gas cargoes in the first half of this year, according to the National Enegy Board.

Canada may become a huge LNG exporter while several major energy companies have proposed to build LNG export terminals to develop the country’s vast shale gas reserves. [Red & bold emphasis added.]

Webmaster's comment: Vast natural gas resources in Canada and the US eliminate the need to import LNG. Downeast LNG's project consists of fog and mirrors.

United States

Energy Department expands LNG exports as shale gas soars — Forbes

Natural gas production from the Marcellus Shale region of Pennsylvania and West Virginia has risen by 50% over the past year, producing the equivalent of 550 million barrels of oil. [Red & bold emphasis added.]

Webmaster's comment: Earth to Downeast LNG's Dean Girdis: In case you haven't noticed, that horse you're riding is dead.

US DOE could OK four more LNG export applications before pausing: report — Platts

The US Department of Energy could approve soon as many as four more applications to export LNG before stopping the approval process to review new data, analysts with FBR Capital Markets said in a report Thursday.

DOE has approved three applications to ship LNG to non-FTA countries, including since May two totaling 5.6 Bcf/d, but 19 applications, totaling 23.6 Bcf/d, are still pending.

Analysts with FBR said that ... DOE will approve one to four more LNG export applications, totaling between 1 Bcf/d to 2.79 Bcf/d, before it will "taper" the process by, potentially, pausing approvals to analyze the cumulative impact of approved and proposed projects.

BP’s past casts a long shadow over its future in the US (Aug 14) — Platts

BP filed a lawsuit Monday challenging the EPA’s suspension of the company’s ability to win new business with the federal government. The suspension was initiated last November when BP agreed to plead guilty to criminal charges stemming from the April 2010 Deepwater Horizon blowout and spill in the Gulf of Mexico.

A more serious mandatory debarment was issued in January, when BP’s guilty plea was formally accepted. The debarment prohibits BP’s exploration and production arm from doing any business with the government from its corporate headquarters in Houston, essentially eliminating BP as a bidder for Outer Continental Shelf leases.

[EPA officer Richard Pelletie's] language in his 20-page decision is damning. He makes clear that he weighed the evidence against BP in the context of a broader and longer safety record, going back to the 2005 explosion of BP’s Texas City refinery, which killed 15 workers.

Pelletier concludes that, despite BP’s detailed plan outlining the internal safety and culture improvements it is making, the company’s past speaks louder than its present.

Webmaster's comment: When BP was proposing the Crown Landing LNG import terminal in New Jersey, at a 2005 public meeting in the Quoddy area, FERC's Office of Energy Products then-Director of Gas, Environment and Engineering Richard Hoffman indicated that BP's egregious willful health and safety negligence, and absence of corporate safety culture — as determined by OSHA after the Texas City, Texas, refinery explosion — would not prevent FERC from issuing a permit to construct an LNG terminal. (See http://www.savepassamaquoddybay.org/news_archives/2005/news_2005sep.html#30_bdn)

The above news article demonstrates that the EPA takes its public and environmental safety responsibility far more seriously than does FERC.

Canadian Maritimes

Confederation Bridge shut down for natural gas leak — CBC News

“There was a leak that was detected so the truck was stopped there and the highway was closed for a period of about two hours, just to ensure everyone’s safety and to ensure the leak was contained and repaired,” she said.

The truck was coming from the U.S., heading to Prince Edward Island. [Red & bold emphasis added.]

Webmaster's comment: New Brunswick and Nova Scotia have natural gas wells. New Brunswick imports LNG. Nova Scotia is planning two LNG export projects. One wonders why natural gas is being shipped by truck from the US to Prince Edward Island.

Gas leak forced Confederation Bridge to close Saturday night — The Guardian, Charlottetown, PEI

Another tanker truck was brought to the site to purge the natural gas out of the leaking vehicle.

The bridge has been closed to traffic before, but only in cases of severe weather or special events such as the Terry Fox Run.

Webmaster's comment: Was the truck leaking natural gas during its trip across Maine and New Brunswick? Was the US Department of Transportation notified? What trucking/natural gas company was it?

New England

Markey: Step up security at Boston LNG terminals (Aug 13) — Boston Globe, Boston, MA

BOSTON (AP) — U.S. Sen. Edward Markey is asking President Barack Obama to order the U.S. Coast Guard to review security procedures for shipments of natural gas from Yemen to terminals near Boston.

In a letter to Obama, Markey says security threats in Yemen raise what he calls real questions about whether it’s safe and reliable for tankers to continue delivering shipments to the Everett LNG terminal. [Red & bold emphasis added.]

Sen. Markey asks President Obama to review safety of Yemeni LNG imports to Mass. (Aug 13) — Maritime Executive

Everett Terminal Receives Imports from Middle East Terrorist Haven; DOE Approved Another New Export Terminal for Valuable Resource

Citing increased terrorism activity in Yemen, Senator Edward J. Markey (D-Mass.), member of the Foreign Relations Committee, asked President Barack Obama to direct the U.S. Coast Guard to review security procedures for shipments of natural gas from the Middle East nation delivered to a terminal in Everett, Massachusetts, adjacent to Boston. Senator Markey, a leading advocate of limiting liquefied natural gas (LNG) exports, also questioned the continued approval of LNG export terminals in light of fact that New England continues to rely heavily on imported natural gas, including from the terrorist haven of Yemen.

Yet last week, even as terrorism concerns spiked in Yemen, the Department of Energy approved yet another export terminal in Louisiana to send more American natural gas abroad. It is the third such terminal approved in recent months. In the letter to the president, Senator Markey notes that it is his belief “that using our domestically produced natural gas here in America to reduce our dependence on foreign supplies from unstable and unsafe regions should take precedence over any plans to export U.S. natural gas abroad. The deteriorating security situation in Yemen only serves to highlight and heighten this imperative.”

Webmaster's comment: New England's reliance on imported LNG is largely due to long-term contract commitments.

Markey warns of security threat from imports of Yemen natural gas (Aug 12) — The Hill, Washington, DC

In a letter to President Obama, Markey said exports of natural gas should be restricted so that the U.S. isn't put in the position of needing to import natural gas from countries like Yemen, the home of al Qaeda of the Arab Peninsula (AQAP).

Markey argues tankers filled with liquefied natural gas from Yemen — which dock at the Everett, Mass. port — pose a significant threat.

Oregon

Sierra Club files protest on Oregon LNG export terminal application (Aug 13) — LNG Law Blog

Sierra Club has filed a protest with FERC in opposition to LNG Development Company, LLC's (d/b/a Oregon LNG) application to construct an LNG export and import terminal in Warrenton, Ore. Sierra Club argues, as it has in other LNG export terminal cases, that LNG exports will (1) induce gas production from hydraulic fracturing leading to environmental harm and (2) raise domestic gas prices. [Red emphasis added.]

World

Gunmen kill Yemeni troops guarding LNG export plant (Aug 11) — CBC News

Suspected al-Qaeda militants killed four Yemeni soldiers in their sleep early on Sunday in an attack on forces guarding the country's only liquefied natural gas (LNG) export terminal, a local official said.

The official said the gunmen infiltrated a checkpoint guarding the Balhaf LNG terminal in the southern Shabwa province, killed one soldier and then entered a cargo container where four more troops were sleeping and shot them dead.

A Yemeni government spokesman said last week that the $4.5 billion gas facility, jointly managed by Yemen LNG and France's Total, was one of two energy targets that suspected al-Qaeda militants had been plotting to attack.

[The LNG facility] supplies gas cooled to liquid for export by ship, under long-term contracts to GDF Suez, Total and Korea Gas Corp. [Red & bold emphasis added.]

Webmaster's comment: GDF Suez imports LNG from Yemen to the Everett LNG terminal near Boston, as well as the Neptune LNG facility offshore from Gloucester and Boston that has been idle for over two years due to lack of need.

Yemeni energy company denies attack report (Aug 13) — (UPI) iStock Analyst

Yemen LNG said there was no validity to reports of an attack by al-Qaida on the Balhaf liquefied natural gas export terminal, the country's only such facility.

Gunmen kill five Yemeni troops guarding LNG plant (Aug 12) — Maritime Executive

Update: Yemen LNG denies that such incident took place at its Balhaf facility. However, Yemen LNG was informed by Police Authorities that there was an incident involving the Army and local tribesmen that took place around 60KM from Balhaf on the road between Mukalla-Aden.

A private security source working for oil and gas firms in Yemen said Sunday's killing appeared to be in retaliation for recent drone strikes that killed scores of Islamist insurgents in the south.

"The checkpoint they attacked is one of many leading up to the gas facilities," said the source, who spoke on condition of anonymity. "The militants know that it's impossible to penetrate all of the checkpoints and that's why they didn't attempt to go further. They just wanted vengeance."

Passamaquoddy Bay

Downeast LNG moving forward with LNG import project — LNG Law Blog

In response to a recent FERC data request, Downeast LNG, Inc. has submitted a letter stating that it has exercised its land option agreement for its proposed LNG import terminal site, and has purchased the terminal site property. [Red, yellow & bold emphasis added.]

New England

USA: Three LNG cargoes imported in June — LNG World News

The Everett LNG terminal received two cargoes while the Sabine Pass terminal received one cargo.

Webmaster's comment: Everett LNG continues to import LNG due to a long-term contract. Its overall imports have fallen dramatically due to lack of need.

Northeast

Oppose offshore LNG: Public comment deadline August 22 - Sample comments below (Aug 6) — Clean Ocean Action, Sandy Hook, NJ

[S]ubmit your comments to the federal government opposing Liberty Natural Gas's offshore LNG facility called Port Ambrose. See below for sample topics and comments opposing the project. Feel free to use the language and facts and make sure to personalize it. Share this link with friends and family.

Gulf of Mexico

U.S. approves Lake Charles Exports to sell natural gas overseas (Aug 7) — Bloomberg Businessweek

The Energy Department approved Lake Charles Exports LLC to ship natural gas from its terminal in Louisiana, the third facility the Obama administration has backed to sell to nations that lack free-trade agreements with the U.S.

The Energy Information Administration, which analyzes data for the U.S., forecasts gas production will increase to about 70 billion cubic feet a day this year from 69 billion in 2012.

The U.S. has previously approved liquefied natural gas exports from the Sabine Pass LNG Terminal in Cameron Parish, Louisiana, and the Freeport LNG Terminal in Quintana Island, Texas. About 19 applications are pending at the department.

United States

USA: Bicameral Task Force on Climate Change releases recommendations for DOE — LNG World News

The Bicameral Task Force on Climate Change released a white paper recommending 20 concrete steps the Department of Energy should take in carrying out the President’s Climate Action Plan. The recommendations include strengthening specific energy efficiency standards, accelerating the development and deployment of low-carbon energy technologies, expanding the use of energy savings performance contracts to save energy at federal facilities, encouraging reforms in state building codes and utility rate structures, maximizing the contribution of power marketing administrations, and analyzing the climate change impacts of liquefied natural gas exports. [Red & bold emphasis added.]

Third LNG terminal approved! (Aug 8) — Energy & Capital

In what will no doubt be seen as a welcome development by the American gas sector, the U.S. government issued its approval for natural gas exports from a third facility, to be situated in Lake Charles, Louisiana.

If operators and developers are able to set up export agreements with nations around the world, it would definitely ease the gas glut (thus raising prices to levels where gas operators find it worthwhile again). More importantly, it would relieve the serious flaring problem we’ve got going on here.

Take the Bakken shale in North Dakota, for example. We’re flaring $100 million of natural gas every month simply because there isn’t enough infrastructure to transport the gas. As I said, prices are so low that operators just keep seeing natural gas as a profit-less avenue, but we lack the pipeline and export infrastructure that could actually put all this gas to meaningful use.

Even if the U.S. now has so much gas that it’s become ridiculously cheap, on an international level, natural gas is still a very valuable and useful commodity. The ongoing shale boom won’t last forever. There is just no way we can afford to keep flaring off gas at present rates. [Red, yellow & bold emphasis added.]

Mexico: U.S. natural gas savior? (Aug 8) — Energy Legal Blog

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

[E]xport terminals cannot export gas to foreign countries lacking a free trade agreement with the U.S. without permits from the U.S. Department of Energy and the Federal Energy Regulatory Commission (“FERC”). The queue for approval is long with only three facilities (including most recently the Lake Charles LNG Project in Lake Charles, Louisiana) receiving approval from the Department of Energy and only one of those (the Sabine Pass project in Cameron Parish, Louisiana) receiving approval from FERC. Given the long construction lead times for these projects and political pressure from environmentalists and buyers of natural gas who want prices to remain low, it won’t be until 2016 when any significant volumes of LNG are exported from the continental United States. Rival producers such as Qatar, Australia and Indonesia are rapidly signing contracts with Japan, Korea and China to satisfy the long-term needs of those countries as America continues to delay the development of its LNG infrastructure.

Meanwhile, the historically low natural gas prices created by the production glut are forcing energy companies to find a profitable market for their natural gas in the short to medium term. They appear to have found one in America’s backyard: Mexico. Constructing pipelines to straddle the U.S.-Mexico border entail less regulatory complexities and attract less political attention than LNG exports. With the existing U.S.-Mexico natural gas pipelines almost at capacity, energy companies cannot build border pipelines fast enough, with several new pipeline projects coming online, including Kinder Morgan’s El Paso Natural Gas Co. export pipeline near El Paso, Texas, with a capacity of 0.37 billion cubic feet per day. According to the U.S. Energy Information Administration all of the in-progress pipeline projects on the U.S.-Mexico border could result in a doubling of American natural gas exports to Mexico by the end of 2014.

The U.S. is the gassiest country (Aug 7) — Energy Trends Insider

Over the past seven years, the US has firmly established itself as the global king of natural gas production (and consumption). In 2011, the US produced 62.7 billion cubic feet per day (bcfd) — more natural gas than any country had ever produced in a single year. That record fell in 2012 when the US produced 65.7 bcfd — which represented just over 20% of all the natural gas produced in the world. And thus far in 2013, US natural gas production is running ahead of 2012’s record production level.

LNG exports would probably cause higher domestic natural gas prices, hurting Dow and certain other heavy users of natural gas, as well as consumers. Regardless, expect more LNG licenses to be approved, and as long as natural gas production remains strong then natural gas producers in the US should benefit.

Mexico

Mexico: U.S. natural gas savior? (Aug 8) — Energy Legal Blog

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

[E]xport terminals cannot export gas to foreign countries lacking a free trade agreement with the U.S. without permits from the U.S. Department of Energy and the Federal Energy Regulatory Commission (“FERC”). The queue for approval is long with only three facilities (including most recently the Lake Charles LNG Project in Lake Charles, Louisiana) receiving approval from the Department of Energy and only one of those (the Sabine Pass project in Cameron Parish, Louisiana) receiving approval from FERC. Given the long construction lead times for these projects and political pressure from environmentalists and buyers of natural gas who want prices to remain low, it won’t be until 2016 when any significant volumes of LNG are exported from the continental United States. Rival producers such as Qatar, Australia and Indonesia are rapidly signing contracts with Japan, Korea and China to satisfy the long-term needs of those countries as America continues to delay the development of its LNG infrastructure.

Meanwhile, the historically low natural gas prices created by the production glut are forcing energy companies to find a profitable market for their natural gas in the short to medium term. They appear to have found one in America’s backyard: Mexico. Constructing pipelines to straddle the U.S.-Mexico border entail less regulatory complexities and attract less political attention than LNG exports. With the existing U.S.-Mexico natural gas pipelines almost at capacity, energy companies cannot build border pipelines fast enough, with several new pipeline projects coming online, including Kinder Morgan’s El Paso Natural Gas Co. export pipeline near El Paso, Texas, with a capacity of 0.37 billion cubic feet per day. According to the U.S. Energy Information Administration all of the in-progress pipeline projects on the U.S.-Mexico border could result in a doubling of American natural gas exports to Mexico by the end of 2014.

New England

Cooler weather crushes gas prices, Boston cheaper than Louisiana [Podcast] — Platts

Will natural gas prices rebound from their five month lows? Falling temperatures took gas prices with them and a Platts’ analysis of September’s forward packages show traders expect natural gas has further room to fall. For the first time ever, it will be cheaper to buy gas for Boston than in Louisiana because of the Marcellus Shale. Platts editors Bill Holland, Kate Winston, Keiron Greenhalgh, and Stephanie Ritenbaugh (in Pittsburgh) discuss. [Red, yellow & bold emphasis added.]

Webmaster's comment: Downeast LNG's purpose is being crushed by massive Marcellus Shale reality.

Maine

Eye on Augusta: Legislature goes big for natural gas (Aug 1) — Free Press, Rockland, ME

On June 26, the Legislature passed LD 1559, the so-called "ominibus energy bill," which aims to reduce heating and electricity costs by both investing in natural gas pipelines and energy-efficiency programs. The law, which combines several pieces of legislation, is the product of a committee process that involved various stakeholders, from environmentalists to industry groups. Not all sides were happy with the end result.

The most controversial provision in the bill allows the Public Utilities Commission (PUC), with approval from the governor, to collect fees from ratepayers to buy up to $75 million annually in natural gas pipeline capacity, with the goal of spurring private investment in new pipelines into the state. [Red & bold emphasis added.]

Webmaster's comment: Downeast LNG claims that building new natural gas pipelines is nigh impossible. Downeast LNG's pants are on fire.

United States

US lawmakers press Energy Dept on power to revoke LNG permits — Reuters

In response to a similar inquiry from then-Congressman Edward Markey last year, the department said it did not intend to use its power to revoke permits as a "price maintenance mechanism" and that the department would only consider taking actions under "extraordinary circumstances."