"For much of the state of Maine, the environment is the economy"
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2011 September 27
[Red bold emphasis added.]
Zin Smati, head of GDF Suez's North American division, told World Gas Intelligence [subscription required] last week that his company has diverted twelve LNG cargos so far this year that were originally slated for delivery to the Everett LNG terminal and Neptune LNG deepwater port. The article goes on to suggest that the company would like to divert some twenty LNG cargos per year going forward.
The U.S. Department of Energy (DOE) has given formal notice of the LNG re-export application filed by Dominion Cove Point LNG, LP, and set the deadline for public comments on the application for October 21, 2011.
The Texas Commission on Environmental Quality (CEQ) has filed comments with FERC regarding the planned Freeport LNG liquefaction [and export] project. The comments, available in FERC's eLibrary under Docket No. PF11-2, conclude that the air pollution from volatile organic compounds and nitrogen oxides produced from this project is "expected to be well below the 25 tons per year significance level," so no formal analysis is needed to ensure that the project meets the state's air quality rules.
Just a few years ago, energy companies trying to build liquefied natural gas import terminals in Oregon scoffed at the idea of switching their projects to export facilities. Industry officials dismissed the notion as economically unfeasible and suggested that environmentalists warning of such a shift were conspiracy theorists.
Both of Oregon’s U.S. senators are skeptical of this shift, as are a host of local and state officials, ratepayer advocates and industrial gas users. They rightly fear that such projects will increase domestic gas prices and compromise the nation’s long-term energy security.
Jordan Cove Energy Project, L.P. submitted an informational filing to FERC last week to notify the Commission that the developers of the project are considering shifting the proposed LNG import project to an LNG liquefaction and export project.
A liquefied natural gas terminal on Coos Bay looks less likely, after last week's announcement that developers would focus on exports rather than imports. What's more, some local residents who supported an import terminal may lack the stomach for an export facility.
Until recently, developers of the Jordan Cove Energy Project have pooh-poohed the idea of exporting gas. Now that underground hydraulic fracturing is unleashing cheap Rocky Mountain gas, Jordan Cove is eating those words.
The idea of condemning private land for an export pipeline will make Jordan Cove even more controversial than it already is. Conservatives and liberals find common ground in defending the rights of property owners against profit-seeking developers.
"We've been expecting the export announcement for quite some time -- imports didn't make any sense at all," said Shady Cove resident Bob Barker, whose property bordering the Rogue River would be crossed by the pipeline. "Now we have the scenario of selling the gas to the highest bidder. Since the price of U.S. gas is so much lower, exporting it will likely raise the price of domestic natural gas."
In addition to crossing a little more than 100 miles of private land, the pipeline also would go through some 30 miles of national forestland and 40 miles of U.S. Bureau of Land Management land. Easements would be needed on the private parcels, although FERC has granted the pipeline builders the right of eminent domain as a last resort.
"If we want to become energy independent, we shouldn't be exporting natural gas so companies can get richer at the expense of U.S. rate payers," she said. "I also believe they have to start all over with their permitting process. Their stated need is now totally different."
The Platts sixth annual Pipeline Development and Expansion Conference in Houston wrapped up last week, and the two days of presentations revealed a largely uniform message: We're building pipeline infrastructure as fast and vast as we can, and often it's still not enough to handle the burgeoning streams of crude, NGLs and natural gas.
…. NGL production, as well as natural gas, from shale is "absolutely off the scale." Thus this need for pipelines, and related infrastructure, resulted in urgent phrases from the conference such as "scrambling to keep up" and "unexpected demand on our system" and "considerable growth on the horizon."
Forecast output from shale gas is sufficiently large enough that Virginia-based Dominion has asked the US Department of Energy for permission to export LNG from its Cove Point terminal on the Chesapeake Bay, said manager Josh Eakle.
Save Passamaquoddy Bay/ Canada did not hold a public meeting this year because there has been little progress on the three LNG projects originally proposed for the bay.
Webmaster’s Comments: Calais LNG is, for all practical purposes, dead, even though it is still present in the FERC permitting process. Quoddy Bay LNG is irrevocably dead. Downeast LNG is the only project with any life left, and is currently awaiting a US DOT decision regarding new vapor-gas dispersion modeling and the resulting LNG terminal Exclusion Zone. It may be that the newly-calculated Exclusion Zone will be too large for the amount of land at the Downeast LNG proposed site. If not, then we can expect Downeast LNG to continue with its federal permitting.
Webmaster’s Comments: The US now has 14 LNG terminals — including one export terminal in Alaska that is due to shut down in October, and one import terminal in Puerto Rico. That results in 12 LNG import terminals in the lower 48 states — increasing US import capacity well over 15 times the need.
FERC has invited the Caddo Nation as well as the Alabama-Coushatta, Tonkawa and Wichita and Affiliated Tribes to participate in the Commission's review of the Freeport LNG liquefaction and export project.
Webmaster’s Comments: For once, the federal government is being appropriate regarding tribal rights and interests.
Speaking in Washington, D.C., [September 22nd], Michael Ware of Advance Capital said that LNG exports could encourage investment in renewable energy. Ware suggested that LNG exports could provide an outlet for relatively inexpensive domestic natural gas and allow renewable energy technologies like wind and solar to compete for domestic energy market share.
Webmaster’s Comments: The article's logic: Selling America's energy future via LNG exports would increase the cost of domestic natural gas, creating a better competitive position for renewables.
Not only has the U.S. natural gas snafu produced a temporary domestic surplus — with technology pointing toward vast new production — but it also prevents potential liquefied natural gas exports to high priced-markets such as East Asia. U.S. sales to South Korea, for example, would block a proposed Moscow-Seoul gas project whose transit fees through North Korea would bolster the bankrupt, peace-threatening regime in Pyongyang. [Brown emphasis added.]
Webmaster’s Comments: One can find any kind of goof-ball opinion, if one looks hard enough.
2011 September 22
[Red bold emphasis added.]
What does the flood of shale gas mean for liquefied natural gas imports, or LNG, in the United States? Odds are that the growth of such frozen gas that is shipped from aboard will remain flat at best. But that does not preclude its expansion overseas or its use in this country if natural gas consumption endures. The emergence of shale gas here has literally bumped LNG to the back burner. Now that the unconventional gas found a mile beneath the earth's surface can by drilled out using hydraulic fracturing, it has changed America’s energy picture. Estimates are that 100 years of the stuff now exists, which has put a damper on LNG imports that were once thought to be the future darling of natural gas.
Gas prices are expected to remain depressed in the U.S. with the EIA weekly report on gas inventories in the U.S. showing a higher than expected build up of reserves as the increase in production outstripped demand. … Analysts expect exports from the U.S. to meet international demand over the long term.…
The EIA long term forecast expects the U.S. to increase its Natural Gas demand to increase by 14% from 2008 to 2035 with growth in the industrial and utility sectors.  However despite increasing demand, supply from shale deposits across the U.S. are expected to flood the market and their output is expected to triple from present levels by 2020.  Despite depressed natural gas prices, LNG prices in the U.S. have risen in anticipation of demand from Asian countries. Liquefied gas can be shipped across to foreign markets and some estimates suggest that the U.S. could export as much as 5 Bcf / day of LNG by 2017 to meet the requirements in Asia and Europe.
Zin Smati, head of GDF Suez's North American division, told World Gas Intelligence [subscription required] last week that his company has diverted twelve  LNG cargos so far this year that were originally slated for delivery to the Everett LNG terminal and Neptune LNG deepwater port. The article goes on to suggest that the company would like to divert some twenty  LNG cargos per year going forward.
The U.S. Department of Energy (DOE) has given formal notice of the LNG re-export application filed by Dominion Cove Point LNG, LP, and set the deadline for public comments on the application for October 21, 2011. Further details are available in the Federal Register.
Webmaster’s Comments: Cove Point LNG has received so little LNG, due to abundance of nearby natural gas, that its LNG storage and regasification facility was in danger of warming up to the point of becoming inoperable. It attempted to get FERC to force a shipper to deliver LNG to keep the facility cooled down. The company is applying to re-export previously-imported LNG, and is considering exporting domestic source LNG.
A spokesperson for Dominion Cove Point told World Gas Intelligence [subscription required] that the company's application to export LNG filed with the U.S. Department of Energy was prompted by inquiries from potential customers to use the facility to export LNG starting 2016 or 2017. The spokesperson also noted that because there is already LNG liquefaction equipment at the terminal, fewer modifications are needed at Cove Point LNG than other LNG terminals hoping to liquefy and export LNG.
The Texas Commission on Environmental Quality (CEQ) has filed comments with FERC regarding the planned Freeport LNG liquefaction project. The comments, available in FERC's eLibrary under Docket No. PF11-2, conclude that the air pollution from volatile organic compounds and nitrogen oxides produced from this project is "expected to be well below the 25 tons per year significance level," so no formal analysis is needed to ensure that the project meets the state's air quality rules.
Webmaster’s Comments: Freeport LNG import terminal is now planning to export, due to lack of domestic market.
Cheniere Energy Partners will offer $60 million in shares for the development of its planned LNG liquefaction project at the Sabine Pass terminal, as well as other general business purposes. Upstream Online provides further coverage.
Platts LNG Daily [subscription required] reports that Japanese officials who met with U.S. Secretary of Energy Steven Chu this week encouraged the U.S. government to approve pending LNG export applications, expressing Japan's desire to import LNG from the United States. A source with the Japanese government told Platts that Japan secured “certain understandings” from Secretary Chu.
Japan plans to start importing liquefied natural gas (LNG) from the United States as early as 2015 to secure a steady supply amid growing demand for the fuel, the Nikkei business daily reported on Wednesday.
It's a jaw-dropping contradiction, a classic bait-and-switch. It's a thumb-in-the-eye of energy independence and the sort of numbing stupidity that, T. Boone Pickens argues, will confirm our legacy as "the dumbest generation."
"It's difficult to believe the world's largest gas companies didn't know what was going on with the gas market; that they've made a catastrophic decision to import massive amounts of gas while the market demanded the opposite," VandenHeuvel said.
Two weeks ago, Bob Braddock, who manages the Jordan Cove LNG project in Coos Bay, told The Oregonian's Ted Sickinger, "There is currently no need for import into North America. We accept that. If anything makes sense, it's export."
The Governor also repeated his call from earlier in the week that natural gas use should be expanded in the state, with large companies acting as the anchors on pipeline spurs that will eventually allow for residential use. He said without lower energy costs, businesses will not move to Maine.
Webmaster’s Comments: Natural gas is abundant in Maine. The problem is gaining access to it via delivery pipelines to homes and businesses.
AUGUSTA, Maine – Gov. Paul LePage said he will meet with natural gas companies over the next few months to see what the state can do to expand use of the fuel throughout Maine. He is convinced natural gas will be the “queen” of energy sources for at least the next decade.
Webmaster’s Comments: Gov. LePage made no mention of LNG import terminals. Perhaps he has finally recognized US natural gas vast supply realities and Maine's access to it.
The tanker Golar Arctic is to arrive at the terminal on Sept. 24, the data showed. The vessel can move as much as 140,648 cubic meters of LNG, or about 3.03 billion cubic feet of gas, equivalent to 4.6 percent of estimated daily U.S. gas production.
Webmaster’s Comments: It has actually become news when a US LNG terminal is expecting to receive cargo.
2011 September 13
[Red bold emphasis added.]
Young touted the 56-mile pipeline from Richmond to Madison as a key infrastructure project, offering large commercial users an energy source that's cheaper than oil. He noted that natural gas is already available in the Portland area, Lewiston-Auburn, Bangor-Brewer, and is expanding from Brunswick to Bath.
The pipe would measure 8 inches in diameter and run through the heart of central Maine, potentially alongside the Interstate 95 corridor in Waterville and Oakland, according to Young. Natural gas could be sold to area colleges, hospitals and large grocery stores, Young said, but probably won't be offered to residential customers anytime soon.
Webmaster’s Comments: The evidence is irrefutable; there is absolutely no need for Downeast LNG.
Big liquefied natural gas (LNG) export facilities are being built, and there’s some irony to this. One company that I’ve shorted successfully and mocked for almost a decade is Cheniere Energy, Inc. Cheniere Energy existed to borrow a billion dollars and build an LNG import facility. Then it decided that maybe we’re not running out of energy in America after all and changed its port from an import facility to an export facility. That gives you an idea of the sea change that’s happened in the domestic onshore oil and gas business. I haven’t heard any other analyst talking about that kind of change yet, but the realization will soon dawn on the market that America has vast energy resources and will have vast energy surpluses going forward.
Last week in Houston, a prominent energy researcher predicted that shale gas production will 'virtually eliminate" U.S. demand for liquefied natural gas imports. Also last week, the president of Japan's No. 2 natural gas distributor said LNG exports from Canada are more feasible than exports from the United States.
CALGARY - Encana Corp. foresees a "renaissance" [increase] in natural gas prices once terminals begin to pop up along the West Coast to export the fuel to energy-hungry Asian markets, but others addressing an energy conference on Tuesday weren't quite so enthusiastic.
In this decade, abundant domestic shale gas production is already having an effect as big as the dot-com and big-box revolutions and, looking forward, it can do more. It can make industrial and electrical generation conversions to gas secure, long-term investments. It can help U.S. employment by rebuilding domestic gas and associated pipeline and support industries.
While conferees are bullish about what shale gas can contribute to America’s competitive edge and overall economy, it won’t give the U.S. a unique boost indefinitely. China appears to have as much as – or more – shale gas than the U.S. In fact, if the U.S. has one real advantage, it’s the speed with which we can bring the gas on stream.
With LNG now gone (we hope), we again asked ourselves how could the redevelopment of the Weaver’s Cove site make the city a better place to live. We concluded that the site should maximize both job creation and the quality of life in the city.
We intend for Sabine Pass Liquefaction, LLC ("Sabine Liquefaction"), our wholly owned subsidiary, to enter into long-term, fixed-fee contracts for at least 3.5 mtpa (approximately 0.5 Bcf/d) of bi-directional LNG processing capacity per LNG Train, for a fee between $1.40 and $1.75 per MMBtu, before reaching a final investment decision regarding the development of the LNG Trains. As of February 25, 2011, Sabine Liquefaction had entered into eight non-binding memoranda of understanding (“MOU”) with potential customers for the proposed bi-directional facility representing a total of up to 9.8 mtpa of capacity. Each MOU is subject to negotiation and execution of definitive agreements and certain other customary conditions and does not represent a final and binding agreement with respect to its subject matter. We are negotiating definitive agreements with these and other potential customers.
The Center for Liquefied Natural Gas (CLNG) sent a letter to congressional energy leaders urging them to support the congressionally established regulatory process for considering LNG export applications.
"The regulatory process for considering LNG exports is working," [Center for Liquefied Natural Gas president Bill Cooper] continued. "DOE should be allowed to do its job within the boundaries established by the Congress as set forth in the Natural Gas Act. Unless DOE finds that an export application is not consistent with the public interest, then the burden is on those opposed to LNG exports to provide evidence beyond mere conjecture and innuendo." [Bold brown emphasis added.]
Webmaster’s Comments: Center for LNG (CLNG) president Bill Cooper — the same guy who opposes public participation in LNG terminal Exclusion Zone decision making (see his 2011 May 24 filing to the US DOT) — argues out of both sides of his mouth. He delivers safety and energy security misinformation to the public when it is suits his purposes (see 2006 November 7 item, "CLNG's Cooper fears complacency as natural gas prices drop this winter [TV transcript]," and the 2008 July 30 article, "CLNG: LNG ships study reveals minimal public safety risk").
2011 September 12
[Red bold emphasis added.]
Speaking last week in Houston, Kenneth Medlock of the James A. Baker III Institute at Rice University said that he expects shale gas production to "virtually eliminate" demand for LNG imports to the United States.
Much of the LNG capacity growth came from exporters salivating to serve what in the mid-2000s looked like a rapidly widening gap between U.S. gas consumption, which was rising, and U.S. production, which was falling from conventional fields. This is the same gap that revived plans to build the major pipeline to move gas from Alaska's North Slope to Alberta and on to the Lower 48 states.
Analysts with Pan EurAsian Enterprises, Inc., an energy industry consultancy, have released a comprehensive report entitled "LNG Exports from the United States – Wishful Thinking?" The report, available to subscribers or for online purchase, examines the potential for LNG exports from the United States and concludes that perhaps one or two LNG export projects could be completed in the coming years, but the completion of an LNG export project in Western Canada is more likely.
Webmaster’s Comments: Exporting US natural gas would deplete US energy security. Remember the energy security argument the LNG industry used when it thought it could make money importing LNG into the US? LNG industry veracity is irreparably broken.
He pointed out that the United States had moved from an LNG importer to an LNG producer (because of massive deposits of recently found shale gas) and suggested the country could eventually start exporting gas.
CNN’s business correspondent Ali Velshi expects there to be a further decline in US demand for T&T’s natural gas. “Yes generally,” he answered when the question was posed to him by the T&T Guardian, “but it is tied to if there is economic growth or stagnation. If we have economic growth the US cannot produce enough natural gas in the short term to change your situation. If we have no growth there is no need for more gas. The idea of greater natural gas use and production is in play but we are declining in consumption in the United States. We are declining in use of all energy,” he said. Velshi spoke with local media yesterday at the Unit Trust Corporation’s (UTC) Investor Conference 2011 at the Hyatt, Port-of-Spain. Presently, 40 per cent of the LNG requirements of US comes from T&T. [Brown emphasis added.]
Webmaster’s Comments: US declining demand for Trinidad & Tobago's LNG is accurate — but US natural gas consumption is declining? …Not according to data and projections from the US Energy Information Administration (see EIA's "Today in Energy," "U.S. Natural Gas Consumption" graph, and "Short Term Energy Outlook").
LePage on Friday nominated DEP [Department of Environmental Protection] acting Commissioner Pattie Aho to permanent commissioner, according to a press release. Aho has been serving as interim commissioner since June, when she replaced previous acting Commissioner Jim Brooks, who took a job at Verso Paper Corp. Brooks stepped in to replace Commissioner Darryl Brown, who resigned in April over concerns about a conflict of interest. Aho, a former Pierce Atwood attorney, was previously serving as deputy commissioner.
Webmaster’s Comments: Alarm bells should be ringing all over Maine with DEP Commissioner Brooks leaving to go to work for an industry he was responsible for regulating without having to first wait a couple of years before accepting such employment.
Prospects for conflict of interest in government regulatory bodies loom large in Maine.
Saint John Fire Chief Kevin Clifford, however, contends outside agencies have reviewed the size of the department and determined it needs all of its firefighters to deal with such threats as old housing stock and industry.
When Chatham County’s long-time lobbyist Lee Hughes signed a contract in January to also lobby for a company with controversial plans to truck LNG through the county, the affiliation seemed like a conflict of interest to some.
Hughes has maintained all along that no legal conflict of interest existed, in part because he’s registered to lobby for the county at the state level and was registered to lobby for the LNG company at the local level. He received a legal opinion from his attorney Thomas J. Mahoney Jr. backing up this position.
Mandates sent down from the Department of Homeland Security state first responders must be able to communicate locally and regionally, Owens said. A 9-11 report found both New York and the Pentagon had gaps in their communication lines hence the mandate to make communication all on the same level.
Webmaster’s Comments: The Passamaquoddy Bay communities' emergency responders on both sides of the international border do not have the ability to communicate with each other regarding an LNG incident — even responders from the potentially impacted communities on the Maine side of the border lack that capability.
As per federal LNG emergency response obligations, the Downeast LNG project would require New Brunswick and Maine emergency responders to have inter-responder communication capability. Since most New Brunswick communities on the bay that would be impacted by LNG transits, the Province of New Brunswick, and the Government of Canada have all indicated they will not cooperate — Downeast LNG has no hope for federally-mandated emergency management capability to coalesce.
Downeast LNG keeps on throwing cash down the project's money-pit, thinking that by doing so, somehow the results will change.
Earth-to-Downeast LNG president Dean Girdis and investor Yorktown Partners: Take a long, close look down the hole. There is no bottom.
The two-way trade has enjoyed rapid growth. According to China Customs, it jumped from US$2.024 billion in 2004 to US$7.158 billion in 2010, an increase of 2.5 times. China has not only substantially increased its imports from the Caribbean region, but also diversified its import mix. Asphalt and liquefied natural gas from Trinidad and Tobago, Jamaica Blue Mountain Coffee, and Caribbean rum have become increasingly appealing in the Chinese market. With more exchanges between the two sides, it is expected that a growing number of competitive Caribbean products will be enjoyed by Chinese consumers.
Trinidadian gas production last year was 4.1 billion ft³/d, compared with 3.8 billion ft³/d in 2009, according to the energy ministry. Half of the gas is used for LNG production, with the remainder for power generation, and for firing petrochemical plants and a steel mill.
Platts LNG Daily [subscription required] reports that a spokesperson for Atlantic LNG said that scheduled maintenance will be conducted on liquefaction trains 3 and 4 in September and October respectively.
The lure of Asian markets has oil and gas producers at home pushing for liquefied natural gas export terminals on B.C.'s West Coast - along with the associated required pipelines - and Enbridge Inc. has earned support for its proposed Northern Gateway pipeline .
Rising natural gas demand in Asia and increases in supply throughout North America -- including in the United States, Canada's traditional export market -- led to significantly higher natural gas prices in Asia than North America. This provided Kitimat LNG with a compelling opportunity to export natural gas across the water to the lucrative Asian market.
Right now, there is no facility in North America capable of liquefying natural gas for export (sic), which makes the Kitimat [in British Columbia] facility incredibly important. Cheniere Energy also has a facility project in the works on the Gulf Coast, but its construction is subject to further federal regulatory approval. At a price tag of $6.4 billion, the company that hasn't made a profit in 13 years also needs to come up with financing, securing Kitimat as North America's most likely bet right now. [Brown emphasis added.]
Webmaster’s Comments: The ConocoPhillips LNG export terminal on the Kenai Peninsula in Alaska has been exporting US-source LNG to Japan since 1969. The liquefaction and export terminal is shutting down in October, the company says, due to lack of market for its gas.
Carib Energy filed an application to the DOE earlier this year to export LNG from the U.S. It will transport the LNG from liquefaction facilities using approved 40-foot LNG ISO containers transported on ocean-going carriers. Carib is permitted to transport up to 11.53 Bcf of natural gas per year for a 25-year term.
Japan's No.2 natural gas distributor Osaka Gas Co said on Thursday it plans to obtain 5-10 percent of its imports of liquefied natural gas (LNG) until 2015 through the spot market and the remainder through long-term contracts.
Webmaster’s Comments: Not only are US LNG interests attempting to sell US energy security out from under us, LNG speculation-failure history is about to repeat itself.
The Russian Government recently unveiled plans to build the world’s longest tunnel, as part of a $65 billion USD project to develop Siberia and warm Russian-U.S. relations. The tunnel will supply the US with oil, natural gas and even electricity.
Webmaster’s Comments: There was a flurry of news coverage in 2007 regarding Russia's proposed "World Link" project; however, the coverage then dried up. With the US natural gas supply turnaround, there is one less reason for Russia to consider actually doing this project.
2011 September 8
Dominion applied to the Department of Energy earlier this summer to become a re-exporting facility, where shipments would come in, be stored on site and then re-exported, and then last week the company applied to be a regular export facility, “which would be a major investment in Calvert County,” Dominion Cove Point LNG plant spokesman Dan Donovan said. “It would turn Dominion Cove Point into a bi-directional facility, where at times we would import and at other times export.”
CLEVELAND, Sep 7, 2011 (GlobeNewswire via COMTEX) -- Chart Industries, Inc. announced today that the Chart Energy & Chemicals Group will sponsor the Zeus Modular & Mid-Scale LNG Conference on September 15, 2011 at the Hilton Hotel in Lafayette, Louisiana. The conference will be preceded by a tour of Chart's cold box manufacturing facility in New Iberia on September 14th.
A company spokesperson offered an update on the Port Dolphin LNG deepwater port project, saying that the company continues to consider accepting U.S.-sourced LNG from liquefaction terminals in the Gulf of Mexico. An energy analyst noted to World Gas Intelligence [subscription required] that "[i]f Port Dolphin is not using U.S.-based LNG, it’s a pretty tough sell."
Webmaster’s Comments: It's a "pretty tough sell" because foreign-source LNG costs more than US-source.
The report provides profound analysis and complete data on each segment of Trinidad & Tobago LNG value chain including source fields, connecting pipelines, liquefaction plants, trains, storage tanks, jetty and LNG carriers for all the existing and planned LNG terminals in Trinidad & Tobago.
Topics being covered in the conference include the impact to communities of a transient workforce, water resource management for unconventional gas exploration, and the evolution and future of the LNG markets.
With trains 1 and 2 at the Kitimat LNG facility, the increase in demand will be at least 3,000 GWh. If Shell builds a facility, it is expected to use 4,000 to 5,000 GWh. Progress Energy and Petronas are also looking at LNG. Currently there is only 1,000 GWh in BC Hydro's load forecast for LNG use. LNG production costs and GHG risk will rise if LNG producers are forced to self-generate electricity, making Oregon an attractive location.
A second pipeline, Northern Gateway, to the British Columbia (BC) coast would help open markets to Asia, but its volume — 550,000 barrels a day (b/d) — amounts to less than one half of 1% of global demand. Likewise, proposals to export liquefied natural gas (LNG) from BC pale in comparison with the plans of countries such as Australia that are fighting for the same LNG Asian buyers.
At a conference in Australia this week, Benjamin Kloss of BP discussed several economic considerations of U.S. LNG export projects, including natural gas supply markets, spot versus long-term supply arrangements, and market arbitrage potential.
Mexico City, 6 September (Argus) — The start-up of the 500mn ft³/d regasification terminal at Manzanillo, on Mexico's Pacific coast, has been delayed due to unfinished work on dredging a canal and re-routing a railroad line.Top
2011 September 5
[Red bold emphasis added.]
The facility only imported a total of four ships this year, he said. “Gas prices are lower in the U.S. than in the rest of the world so in conditions like that we’d be able to export natural gas,” he said, which was the basis for applying for an exporting permit. “It’s an effort to get more use out of our terminal since not many ships are coming in.”
Developer Downeast LNG, based in Washington, D.C., is still working to finalize its environmental impact study with the Federal Energy Regulatory Commission, and is consulting with the U.S. DOT on recent changes to federal safety standards for LNG facilities. A revised draft will be issued after Downeast LNG completes consultations with the DOT.
Developer Calais LNG has pulled its state application to build a $1 billion LNG terminal here, after multiple requests for extensions to complete its application. Calais LNG said the “extreme turbulence of the capital markets” stalled the project, as it struggled to find a new investor after GS Power Holdings LLC, a subsidiary of Goldman Sachs Group Inc., backed out. It plans to refile its application in the future.
According to the US Energy Information Administration, FERC, America's Natural Gas Association, and others, the US is currently in a 100-year natural gas glut. Even Maine has no shortage of access, as is evidenced by the Baileyville and Millinocket paper mills' natural gas pipelines projects; they are building access to the Northeast & Maritimes Pipeline's copious natural gas supply. Verso Paper in Bucksport has had similar access for some years. Also, several Maine communities are adding natural gas delivery infrastructure.
Due to a lack of need for LNG imports, Canaport is operating at a mere fraction of its capacity. The same is true — with considerably less import activity — of the two newly-constructed LNG import terminals offshore from Gloucester, Massachusetts, Northeast Gateway Deepwater Port and Neptune LNG.
Dominion Cove Point LNG terminal in Maryland has received only four LNG ships this year, resulting in a near shutdown due to inability to keep the equipment cold. It is currently planning to add LNG export capability, accessing the vast natural gas supplies in the nearby Marcellus Shale fields.
Gulf Gateway Deepwater Port 116 miles offshore from Louisiana, the world's first offshore LNG receiving terminal, new in 2005, is being scrapped by its owner, Excelerate Energy, due to lack of need.
There are around 30 new pipeline and pipeline expansion projects in the works (or newly completed) to deliver abundant natural gas supply to the Northeast.
The US already has around 15 times the LNG import capacity than is needed; it is grossly overbuilt. There are no economic or energy-security reasons to construct LNG import infrastructure in Maine, the Northeast, or the lower 48 states.
Furthermore, siting an LNG terminal in Passamaquoddy Bay cannot satisfy the world LNG industry's own terminal siting best safe practices. (See LNG Terminal Siting Standards Organization for more on this issue.) Unfortunately, US laws and regulations ignore the industry's own terminal siting best practices in determining acceptable sites.
Proposed Projects: Natural gas/LNG: Robbinston
In July 2009, Downeast LNG went completely through the Maine permitting process, including week-long hearings. When the company realized it would fail permitting, it withdrew its permits before the DEP could render its decision. More than two years later, Downeast LNG has still not re-entered Maine permitting.
When Downeast LNG filed with FERC, its terminal site diagram indicated the site's federal Exclusion Zones would extend halfway across highway US-1. No other US LNG terminal Exclusion Zone extends onto a US highway. The recent US DOT requirement to develop more conservative vapor-gas dispersion computer modeling makes it likely that the Exclusion Zone is even greater than Downeast LNG previously indicated. Exclusion Zones must be kept within the LNG terminal fence line, with the exception of property controlled by the terminal owner or by the government if that location is not a public gathering place for 50 or more people. To date, the US DOT has never rendered an interpretation of such a condition as Downeast LNG's Exclusion Zone extending onto a US highway.
Computer modeling for thermal radiation from a terminal LNG tank-top fire has not yet been examined — a potential fatal issue for Downeast LNG. The thermal radiation model currently in use has been demonstrated to be less than conservative, ignoring significant variables (wind speed at the tank top, flame tilt, tank wall thermal spalling causing cascading containment failure, and thermal radiation impact on a downwind LNG storage tank) that could result in a significantly greater Exclusion Zone than the Downeast LNG's site can accommodate. In Downeast LNG's case — according to the thermal radiation, fire, and explosion expert who submitted comments to FERC on this issue in 2009 — new modeling indicates Downeast LNG's thermal radiation zone would extend more than 900 feet beyond US-1 — approximately doubling the Exclusion Zone distance. Since Exclusion Zones must remain within the terminal fence line, Downeast LNG's terminal site appears to be vastly undersized, and is "painted in" by US-1. Downeast LNG has been aware of this problem for years, but has chosen not to move to a more appropriate location.
In 2006, Canada announced it is prohibiting LNG ships from transiting through Canadian waters to the proposed terminal. Downeast LNG and the US State Department have argued that such transits are protected by the UN Convention on the Law of the Sea (UNCLOS) "innocent passage" provision. However, since the US is not a member of the UNCLOS treaty, and since the treaty clearly states that UNCLOS rights inure only to UNCLOS treaty members, the US has no rights under that treaty. Canada, alone, has the decision authority on LNG transits to the proposed Downeast LNG terminal.
Plus, the US Coast Guard's Waterway Assessment for LNG transits to Downeast LNG's terminal requires Downeast LNG to…
- Obtain letters of agreement from Native American Tribes regarding use of the waterway — something Downeast LNG has refused to do, claiming Native Americans do not have rights in the waterway — and
- Obtain cooperation and coordination from the Government of Canada to ensure safe and secure LNG transits through both Canadian and US waters. The Government of Canada has repeatedly and firmly stated from the highest level that they will provide no such cooperation or coordination; that LNG transits are banned.
Downeast LNG has known of these insurmountable obstacles for several years. And yet, the company has irresponsibly chosen to pick a fight with a sovereign foreign government — against the requirements of the US Coast Guard — and offending Native Americans, rather than moving the project to an appropriate site.
Stalled Projects: Natural gas/LNG: Calais
The article states that financial markets are the reason for Calais LNG's situation. In actuality, it is the US natural gas market that has been turned on its head that resulted in Goldman Sachs deserting the project. The US natural gas market has been turned on its head by a century-long natural gas glut. Goldman Sachs is an astute investor, and knows a bad investment when it sees one.
Calais LNG has no financial backing. Calais LNG has lost its option to purchase the required bulk of the proposed terminal site. Calais LNG has deserted its offices in Calais.
In order for Calais LNG to refile its state applications, it would have to obtain financial backing, and then obtain a terminal site. Since the previous site is no longer unavailable, Calais LNG would have to begin anew with a different site, requiring starting over at FERC in addition to the State of Maine. "Stalled Project" in this case really should be "Dead Project, but unwilling to admit it."
Scrapped Projects: Natural gas/LNG: Pleasant Point
On October 17, 2008, FERC kicked Quoddy Bay LNG out of the federal permitting process, killing the project. On June 9, 2009, the Pleasant Point Tribal Government cancelled its lease agreement with Quoddy Bay LNG. Prior to July 29, 2009, FERC removed Quoddy Bay LNG from its maps of potential and proposed LNG projects. On April 23, 2010, the Bureau of Indian Affairs cancelled its approval of the ground lease between the Passamaquoddy Tribal Government and Quoddy Bay LNG, although the tribe had already cancelled the lease.
For Quoddy Bay LNG to have a project, it would have to somehow acquire a site. There is no project site and no agreement with anyone to develop the project. Quoddy Bay LNG has no permit applications anywhere, and no agreements with anyone; although it is being sued for breaking agreements to pay suppliers. Quoddy Bay LNG is unquestionably dead.
PORT OF SPAIN, (Reuters) - Lawmakers in Trinidad and Tobago approved a three-month extension of a state of emergency yesterday after Prime Minister Kamla Persad-Bissessar said it had averted “a criminal uprising” in the energy-rich country.
2011 September 2
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Webmaster’s Comments: Calais LNG still claims backing by financial vampire Goldman Sachs even though that bank deserted Calais LNG on 2010 July 21. Here's the Calais LNG website homepage statement…
"Calais LNG has secured the financial support of Goldman Sachs http://www.goldmansachs.com as a key investor and put together a group of highly experienced industry and regional experts dedicated to bringing Maine a state-of-the-art LNG facility that will provide a reliable, safe source of energy." [Bold emphasis added.]
Note: The Calais LNG website contains several dead links that originally pointed to company information, evidencing Calais LNG's pale ghost is fading into oblivion.
WASHINGTON -(MarketWatch)- Dominion Resources Inc. plans to begin exporting U.S. natural gas via a Maryland facility it currently uses for imports, taking steps to adjust to recent developments in the natural gas industry that have led to dramatic increases in U.S. gas production.
Citing abundant access to supplies of natural gas from Pennsylvania's Marcellus shale and elsewhere, Virginia-based Dominion Resources said Friday it has filed a request with the Department of Energy to begin exporting liquefied gas from its Cove Point terminal in Maryland.
Dominion applied to the Department of Energy earlier this summer to become a re-exporting facility, where shipments would come in, be stored on site and then re-exported, and then yesterday the company applied to be a regular export facility, “which would be a major investment in Calvert County,” Dominion Cove Point LNG plant spokesman Dan Donovan said. “It would turn Dominion Cove Point into a bi-directional facility, where at times we would import and at other times export.”
Sept. 02--El Paso Corp. will cut the ribbon today on its newest pipeline, a 680-mile, 42-inch diameter behemoth built to carry vast quantities of Rockies natural gas from the Opal hub in Wyoming to Malin, on Oregon's border with California.
"Ruby is the right pipeline at the right time," said El Paso spokesman Richard Wheatley. "Competing pipeline proposals did not move forward... If you research the natural gas resource base for the Rockies, it is huge. The additional capacity is definitely needed now and in the future."
In the short run, Ruby puts a market-based exclamation point on the notion that there is no need for terminals in Oregon to import liquefied natural gas. The rationale for those projects relied largely on demand in California -- needs now served by Ruby and the existing TransCanda GTN pipeline that runs through central Oregon.
The Jamaican Government has issued two Requests for Proposals for its LNG import plans. One Request for Proposals seeks submissions for LNG supply contracts and the other requests submissions regarding a floating LNG regasification facility.
Black and Veatch of Kansas, has begun work for the LNG plant that will be constructed on a barge and brought to a location on the west side of the Douglas Channel south of Rio Tinto Alcan’s aluminum smelter.
This would be the first barge-mounted export facility serving the Pacific Basin, as well as the first for exporting Canadian natural gas - assuming the project goes ahead as planned, it would be exporting LNG some 18 months before the proposed KM LNG plant.
PORTLAND, Ore. - The El Paso Corp. is holding a ribbon cutting ceremony Friday in Malin, near the California border, to celebrate the completion of a 680-mile pipeline that carries natural gas from Wyoming.
2011 September 1
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The Millinocket mill would use liquefied natural gas — not oil, as reported Tuesday — to fuel its burners until natural gas lines are installed, said Adrienne Bennett, LePage’s spokeswoman. The installation of the natural gas lines is expected to occur within two years.
Webmaster’s Comments: Who still needs convincing that there is enough natural gas in Maine? — despite Downeast LNG's claims that only a Maine LNG terminal can supply enough affordable natural gas to the state. Verso Paper in Bucksport has had a natural gas pipeline for years, now. The Woodland paper mill in Baileyville is currently constructing a 4-mile pipeline to access natural gas. And, now the Millinocket mill is getting natural gas.
The argument that a Maine LNG import terminal would be required for Maine or New England to have adequate natural gas supply was false even before now-defunct Quoddy Bay LNG began, since the Canaport LNG, Neptune LNG, and Northeast Gateway LNG terminal projects were already in progress, years ahead of the projects proposed for Passamaquoddy Bay. Plus, other import terminals were popping up elsewhere in the US. US LNG import capacity is now around 15 times the need, and that need is declining as domestic natural gas production increases.
Downeast LNG and zombie-project (no money, no site) Calais LNG fell into the same money pit that swallowed up Quoddy Bay LNG. When will Downeast LNG's backers, Yorktown Partners, finally get the picture and move on to something actually needed?
While Canada's oil production continues to benefit from world prices, the same is not true for natural gas - thus the continental oversupply situation - coupled with decreased imports into the United States should be reason enough to spur activity that will lead to the export of liquefied natural gas from Canada to Asian markets, sooner rather than later.
Webmaster’s Comments: Downeast LNG's "The Need for LNG" webpage first paragraph claims…
"The Northeast and New England market will see a continuing demand for natural gas, according to several studies. Estimates are that by 2015 there may be a total peak supply/demand deficit of up to 1.25 billion cubic feet per day (bcfd). Because of the forecasted demand and limited alternative supply options, an additional land-based LNG terminal is needed in New England."
Credibility is not Downeast LNG's strong suit.
Now that Hess LNG has abandoned plans to build a liquefied natural gas terminal at Weaver's Cove in Fall River, a city environmental group hopes to turn the site into a thriving commercial and residential development on the waterfront.
Because Jamaica already participated in Chávez's so-called Petrocaribe program, which provided liquefied natural gas to the Caribbean nation, Golding feared that "it would be easy to imagine a scenario in which Chávez offered to write off or defer a portion of these debts in return for government of Jamaica support of his positions in international fora." In drawing closer to Chávez, Golding continued, Jamaica was "getting mixed up with something from which it will be difficult to extricate ourselves." In conclusion, Golding thought that Chávez had become a "godfather with money." Jamaica, he said, was "being sucked into an agenda not of our own making. Chávez waves cash, we're mesmerized, and cave in to anything he wants."
Despite projections by a leading international auditing company that the nation’s gas reserves had nine more years, Atlantic’s chief executive officer Oscar Prieto has instead offered an alternative projection saying the country had enough reserves to fulfil its contractual arrangement for the next 12- 15 years.
- An end to all exploration and development of fossil fuels, such as petroleum in the Gulf of St. Lawrence (Old Harry), shale gas and LNG ports. Elimination of Quebec’s nuclear reactor system and an end to the exploration and development of uranium mines.….
In July, Shell Canada confirmed it was partnering with China National Petroleum Co., Korea Gas Corp. and Mitsubishi Corp. to look at building a liquefied natural gas (LNG) export facility on the coast of British Columbia. But of the four proposed LNG schemes under consideration for Canada’s West Coast, Shell’s could be a little different.
Although costs, production volumes and timelines haven’t been worked out, industry observers like FirstEnergy Capital are speculating that Shell and its partners are considering building a floating LNG structure off B.C.’s coast.
Progress Energy has amassed an estimated 900,000 net acres of land within the commercially productive Montney fairway of northeastern British Columbia and northwestern Alberta, which gives it one of the largest land positions among North American natural gas resources players. In the North Montney fairway of B.C., Progress controls 680,000 net acres of largely contiguous rights, and in the first half this year struck a joint venture with Malaysia state oil company PETRONAS to develop a significant portion of these North Montney assets and evaluate the feasibility of a liquefied natural gas export project.
The North America Gas Summit, which will take place October 3 – 5, 2011, in Washington, DC, is a unique gathering of senior-level energy executives, regulators and thought leaders from across the entire supply chain. The North America Gas Summit will serve as a platform for open dialogue between gas supply and demand - to address the latest regulatory issues shaping the future of the North American market, share best practices and discuss the impact of gas prices on shale gas development, public and media perception around hydraulic fracturing, demand creation through natural gas vehicle development and infrastructure needs, the potential of LNG exports and technology needs of liquefaction facilities, natural gas trading and pricing patterns, EPA regulations and expected outcomes of the current study undertaken, as well as the inherent realities of alternative energy.
Webmaster’s Comments: LNG export projects also reduce North America's energy security.