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29 May 2008

The reason for high oil prices — BusinessWeek

On May 13, the price of a barrel of oil briefly hit a record of $126.98 on the New York Mercantile Exchange The reason was ostensibly that Iran was cutting oil production. But there is no gas shortage. So why are prices still going up?

Goldman Sachs was one of the founding partners of online commodities and futures marketplace Intercontinental Exchange (ICE). And ICE has been a primary focus of recent congressional investigations; it was named both in the Senate's Permanent Subcommittee on Investigations' June 27, 2006, Staff Report and in the House Committee on Energy & Commerce's hearing last December. Those investigations looked into the unregulated trading in energy futures, and both concluded that energy prices' climb to stratospheric heights has been driven by the billions of dollars' worth of oil and natural gas futures contracts being placed on the ICE—which is not regulated by the Commodities Futures Trading Commission.

In case you've forgotten, it was only 2001 when BusinessWeek reported that some Wall Street firms were hard-selling to the public stocks that their companies were quietly divesting—and/or pushing questionable stocks for companies in which their affiliated banks had a financial interest. In a nutshell, some individuals with a specific vested interest in a certain financial outcome used the media to enrich themselves and their companies, leaving the public investor holding the bag. [Red emphasis added.] (May 13)

Webmaster's Comments: It's interesting to note that Goldman Sachs — whose ethics are in question and under investigation, as described in the above article — is claimed by Calais LNG project to be financing their project. One's character can be determined by the company one keeps.

Damage already inflicted [Editorial] — The Herald News, Fall River, MA

As if safety concerns, terrorism fears and environmental damage weren’t enough for local residents to wish Weaver’s Cove Energy had packed its bags long ago, Fall Riverites have another reason to despise the LNG proposal: It’s bleeding the city dry.

The City Council voted Tuesday to withdraw $250,000 from free cash to pay Holland & Knight, the Boston law firm the city hired to fight the proposal. The latest bill raises the city’s legal expenditures to $2.5 million over the last three years. And the bills continue to climb. Mayor Robert Correia has budgeted $250,000 in the coming fiscal year for LNG defense.

…acting City Administrator Alan Silva is right to suggest Fall River needs to pick its battles instead of employing a kitchen sink approach against LNG. [Red emphasis added.]

Gros Cacouna LNG terminal on back burner, but not out — The Gazette, Montreal, QC

Kvisle raised the possibility Rabaska's capacity might be expanded, effectively replacing Gros Cacouna. He would not rule out TransCanada and Petro-Canada becoming partners in the Rabaska consortium - now comprised of Gaz Metro, Ontario's Enbridge and Gaz de France.

Planned gasworks off Broward coast draws protests at meeting — Sun-Sentinel, Fort Lauderdale, FL

Broward County Commissioner Ken Keechl said the concerns are real and told Suez officials that he resented any implication that people who are alarmed by the project "are acting irrationally."

"Other than the expansion of the south runway at the airport, I've never seen an issue create such dissension so quickly," he said, referring to neighborhood opposition at Fort Lauderdale-Hollywood International Airport.

Fort Lauderdale Commissioner Christine Teel read a resolution the city passed last week, opposing the project.

Supporters of an LNG terminal in the Columbia River go on the offensive — The Oregonian, Portland, OR

NorthernStar's direct rebuttal of the state's conclusions mark a new dynamic in its bid to bring LNG to Oregon. To date, the company, aware that the state wields considerable power to block the bid, has tried to avoid a head-to-head public debate with state officials. The Federal Energy Regulatory Commission has overall licensing authority over LNG terminals.

Mike Carrier, Gov. Ted Kulongoski's energy policy adviser, said he didn't see anything that fundamentally undermined the state's conclusions.

Global demand squeezing natural gas supply — The New York Times, New York, NY

[This is an update to yesterday's story. — webmaster]

A longstanding assumption of American energy policy has been that natural gas would be plentiful abroad, and therefore readily available for importation, as production falls off in North America, where many fields are tapped out.

But some experts are starting to question that idea, saying natural gas could be subject to the same explosion in overseas demand that has made oil so expensive.

Supplies of L.N.G. are going to grow in the next few years, but experts say they will not be enough to satisfy the growing demand. Liquefaction plant projects that prepare the gas for shipping in producing nations like Nigeria and Russia are being delayed and even shelved because of political turbulence, cost overruns and increasing domestic demand for gas in their own countries. [Red emphasis added.]

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28 May 2008

Deepwater port brings new energy to region [Editorial] — The Daily News, Newburyport, MA

The new offshore terminus and pipeline network allows for a significant expansion of LNG capacity in New England — always a good thing given the region's lack of natural resources and geographic isolation. Unfortunately, we won't see a significant drop in natural gas prices, since the cost of that commodity follows the market for petroleum products generally; but any effort to increase energy supplies and alternatives is bound to benefit consumers in the long run. [Red emphasis added.]

Webmaster's Comments: Just like the Neptune offshore LNG terminal that will be receiving LNG around the end of 2009, the Northeast Gateway offshore facility is near the market — unlike the proposed and ill-sited Downeast LNG, Quoddy Bay LNG, and Calais LNG projects.

The Canaport LNG terminal in Saint John, NB, that will be receiving LNG around the end of this year — while not close to the US market — is close to the New Brunswick natural gas market, and already has pipeline capacity to carry natural gas to Boston and beyond.

These three LNG terminals moot the proposed LNG projects in Passamaquoddy Bay — an economic reality that has to be causing second thoughts about their projects in the minds of the developers' investors, if they have any sense, at all.

Mass. Attorney General's office responds to Weaver's Cove LNG suit — Sutherland LNG Law Blog, Washington, DC

According to Platts LNG Daily [subscription required], the office of the Massachusetts Attorney General responded to the suit recently filed by Weaver's Cove Energy by saying that Massachusetts has 20 days to reply and called the suit a "new attempt to avoid state environmental review." (May 27)

Council weighs its options in LNG battle — The Herald News, Fall River, MA

Fall River — The City Council debated the question on whether to alter the strategy in fighting Weaver’s Cove Energy’s persistent efforts to site a liquefied natural gas terminal in Fall River.

But the six-figure legal bills keep rolling in. (May 27)

Webmaster's Comments: This story is an indication of the lopsided nature of the FERC LNG permitting process — taxpayers pay millions of dollars to fight a FERC-approved project that even the Coast Guard says is unsafe. FERC claims to be a safety agency, but their Weaver's Cove LNG project approval proves otherwise.

FERC offers comments on Weaver's Cove LNG project — Sutherland LNG Law Blog, Washington, DC

Yesterday FERC made public a letter it filed with the U.S. Department of Commerce regarding Weaver's Cove Energy's proposed LNG import project. Specifically, the letter expresses FERC's continued support for the project and states that "the Commission continues to believe that the project is required in the public interest to develop the nation's energy infrastructure and to increase the reliability and security of the supply of natural gas to New England."

Webmaster's Comments: FERC personnel, while meeting with the public around Passamaquoddy Bay "claimed" that they're not advocates for LNG projects.

FERC is saying that Weaver's Cove LNG terminal is "required" — even though then-FERC Chairman Pat Wood stated in 2005 that only 7–9 new LNG terminals would be needed. There are now 31 LNG projects in operation, expanding, under construction, or permitted. LNG import capacity is already being met.

Congress needs to wrest LNG permitting control away from FERC and give it back to the states, as proposed in Sen. Wyden's Bill S. 2822. (See our Legislation Watch page to follow progress on this Bill.)

Natural gas in pause mode — The New York Times, New York, NY

Only a month after Cheniere Energy inaugurated its $1.4 billion liquefied natural gas terminal here, an empty supertanker sat in its berth with no place to go while workers painted empty storage tanks.

The nearly idle terminal is a monument to a stalled experiment, one that was supposed to import so much L.N.G. from around the world that homes would be heated and factories humming at bargain prices.

But now L.N.G. shipments to the United States are slowing to a trickle, and Cheniere and other companies have dropped plans to build more terminals.

Just about the only place where demand for L.N.G. seems not to be growing is the United States, an abrupt shift from expectations as little as one year ago.

[R]ecently domestic natural gas production has been stronger than expected and events abroad have drawn L.N.G. from the United States to countries that needed it more. [Red emphasis added.]

Webmaster's Comments: Even if the investors for Downeast LNG, Quoddy Bay LNG, and Calais LNG can't read the writing on the wall, the rest of us can — their projects are beyond hope, hopeless money pits.

Area LNG development on hold — Caller-Times, Corpus Christi, TX

[This same story is updated in story below it. — webmaster]

Market predictions made several years ago that drove projections and decisions in the United States have not panned out, Gaul added. As supplies are directed to Asia and Australia, the amount of LNG left for the rest of the world is limited. This is stalling construction through the United States, he said.

According to the Federal Energy Regulatory Commission, the three terminals near Corpus Christi are among 12 LNG import terminals approved by the commission that have yet to begin construction as of April 21.

[Cheniere] is in the middle of laying off about 200 employees, Gentle said. [Red emphasis added.] (May 27)

Webmaster's Comments: Market conditions haven't panned out, construction costs have risen significantly, Asia is willing to pay significantly more for LNG than the US, three new US LNG terminals are now in operation (Northeast Gateway, Freeport, and Sabine) — and 12 LNG terminals have been permitted that aren't being constructed. If anyone still had hopes for the three LNG terminals in Passamaquoddy Bay, they can now clearly see their hopes were misplaced.

3 area gas projects stalled — Caller-Times, Corpus Christi, TX

Almost five years have passed since three companies announced they would build liquefied natural gas terminals near Corpus Christi. Although much work has been conducted, construction plans have been delayed indefinitely.

Texada group endorses tanker ban resolution — Times Colonist,

A group of concerned citizens on Texada Island is embracing a resolution passed by the Powell River Regional District to ban ocean-going tankers carrying liquefied natural gas in the waters of Malaspina and Georgia straits.

Citing environmental and safety concerns, the regional district has resolved to urge the provincial and federal governments to ban the passage of LNG tankers in the area and seek support from other Vancouver Island and mainland communities that could feel the impact of WestPac's project. (May 27)

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Environmental Justice, Government & LNG:

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Historic meeting ends on pessimistic note — Indian Country Today, Canastota, NY

State Department refuses to complete cultural survey for TransCanada pipeline

Determining the pipeline's effects on cultural places appeared to have been a cursory and simplistic process. Longtime efforts by preservation professionals to protect the more ineffable indigenous sites - vision quest places, pilgrimage trails, natural resources critical to a craft, habitats of culturally important animals and even places with no material manifestations at all - were disregarded. (May 23)

Webmaster's Comments: The US Government does it again, mimicking a long and shameful history of inexcusable treatment toward North America's indigenous peoples. (See the following two stories regarding the Bureau of Indian Affairs.)

The Bureau of Indian Affairs network reconnects to the Internet — Native American Times, Glenpool, OK

On Dec. 5, 2001, the federal judge in a class action lawsuit against the Department of the Interior, Cobell v. Norton, entered a temporary restraining order requiring the Department to disconnect from the Internet all information technology systems that housed or provided access to individual Indian trust data, on the basis of perceived risks to that data. On Dec. 17, 2001, a Consent Order was entered which continued that prohibition and also established a process for the Department to obtain permission from the court to reconnect bureaus on a case-by-case basis.

Parts of the Department were permitted to reconnect in 2002. However, the five offices that work closely with Indian trust data remained off the Internet. On May 14, 2008, U.S. District Judge James Robertson, the presiding judge in the case, vacated the Consent Order thus allowing those offices to reconnect. In addition to the BIA, the offices to go back online are the Office of the Solicitor, the Office of the Special Trustee for American Indians (OST), the Office of Hearing and Appeals (OHA) and the Office of Historical Trust Accounting (OHTA).

Webmaster's Comments: Although the court has allowed the BIA to reconnect to the Internet, it is no indication of a sea change in concienciousness at the BIA or in the way they administer their trust responsibilities over Native American lands. It merely indicates that the BIA — after six-and-a-half years — has finally secured their online Indian trust account data.

In their historically abusive way, the BIA — without having performed the required statutory duties regarding lease approval of Indian Trust lands — approved the ground lease between Pleasant Point Passamaquoddy Tribal Government and Quoddy Bay LLC. The BIA has essentially admitted their negligence in federal appeals court during lawsuit proceedings brought by Nulankeyutomonen Nkihtahkomikumon against the agency.

The upcoming hearing at Federal District Court in Bangor will likely find against the BIA, making the ground lease invalid. At that time, Quoddy Bay LLC/Quoddy Bay LNG will have no legitimate lease, and thus, no LNG project.

Court order permitting Internet reconnection — US Bureau of Indian Affairs (BIA), Washington, DC

[The link below goes to the BIA homepage, but the article will eventually be archived and removed from the homepage. At that time the article can be accessed on the BIA's What's Hot archive page. — SPB webmaster]

In a major development with regard to the Cobell v. Norton litigation, the United States District Court for the District of Columbia Circuit on May 14, 2008, granted defendants’ motion to vacate the December 17, 2001, Consent Order Regarding Information Technology Security and has given its permission for the information technology systems of the Bureau of Indian Affairs (BIA), the Office of Hearing and Appeals (OHA), the Office of the Special Trustee for American Indians (OST), and the Office of Historical Trust Accounting (OHTA) to be reconnected to the Internet. A copy of the Court Order is attached.

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24 May 2008

Bear Head once again the focus of speculation — The Chronicle-Herald, Halifa, NS

It may be time now just to wait and see what happens before getting too excited about the prospects.

Ocean zoning law approved by Legislature — The Boston Globe, Boston, MA

"The reason it's important is you have things like LNG ([liquefied] natural gas terminals), wind turbines, other kinds of uses of the ocean, proposed at a pace that's increasing. We don't have the luxury anymore of being able to react to these one at a time," he said. (May 23)

Weaver's Cove: Latest appeal has been denied — The Herald Press, Fall River, MA

U.S. Sen. John Kerry, D-Mass., also hailed the denial. “We’ve said it before and we’ll say it again — this LNG terminal should never have been proposed, and we will continue to do everything in our power to make sure it is defeated once and for all.”

He said “common sense and the public interest” are winning out.

Shearer said Weaver's Cove's recently proposed offshore hookup is a way to avoid traversing the bridges. But an assistant corporation counsel for the city said Nash’s finding said the route north from Prudence Island in Rhode Island was “unsuitable.” (May 21)

Offshore natural gas site plans proliferate — Asbury Park Press, Neptune, NJ

It's the third natural gas-related facility proposed for the ocean well off the New Jersey coast. (May 21)

Webmaster's Comments: Offshore makes far more sense than shoreside, since risks to the public are fewer, terminal expansion is easier, security concerns are fewer, and terminal construction can be faster.

Pipeline to carry Trinidad LNG to US — The Trinidad Guardian, Port-of-Spain, Trinidad and Tobago

The two companies said in a statement on Tuesday that their Liberty Natural Gas Transmission Project will include a deepwater pipeline system which would receive gas 15 miles off the coast of New Jersey. The development, including an import buoy, may process as much as 2.4 billion cubic feet of gas by late 2011. (May 23)

Sweet and sour [Editorial] — Savannah Morning News, Savannah, GA

THE CITY'S decision this week to write off more than $300,000 in past due bills that the El Paso Corp. owed for fire protection on Elba Island is a sweet deal for the Texas-based company and a sour one for taxpayers.

It smacks of inconsistency. (May 23)

Landowners get windfalls from natural gas drilling — USA Today

Several years ago, EIA expected LNG to make up 20% of U.S. gas supplies by 2025. But that forecast has been halved, and little LNG is being delivered.

Terminals are at 50% capacity and expected to remain there for several years, partly because high building costs have discouraged construction of overseas liquefaction facilities, Ineson says. Also, producers are shipping most LNG to Asia and Europe, where customers are paying up to double U.S. rates.

The situation can partly be blamed on the domestic plenty. Abundant U.S. supplies should continue to temper prices and make it tough to attract LNG imports, says analyst Bob Linden of Pace Energy.

"The surprise is that LNG is not turning out to be as big as we expected," Ineson says. "But domestic supply is turning out to be better." [Red & bold emphasis added.] (May 23)

Palin forwards pipeline plan to Legislature — Juneau Empire, Juneau, AK

Gov. Sarah Palin on Thursday announced that TransCanada Corp.'s plan to build a North Slope natural gas pipeline would be forwarded to the Alaska Legislature for approval. (May 23)

Alaska governor backs Calgary firm — Calgary Herald, Calgary, BC

Administrators also compared the TransCanada plan to moving gas by pipeline but only as far south as Valdez, where it would be turned into liquefied natural gas and exported on tankers.

"Overland will be shown to be quicker, more economic and a better value for the state and other stakeholders," said Palin. "It will provide more jobs for Alaskans, while an LNG sponsor would face huge challenges to get that LNG to market." (May 23)

Webmaster's Comments: This pipeline would provide 4.5 billion cubic feet of gas (bcf) per day — expandable to 5.9 billion bcf per day — to the US. That's equivalent to 10–20 LNG import terminals, depending on terminal size.

Port authority faces one more hurdle with gas line announcement — Fairbanks Daily News-Miner, Fairbanks, AK

A summary of the administration’s findings stated that because the LNG would likely be shipped to Asia, an LNG project “would likely face significant political opposition when seeking the required export license.” (May 23)

Canadian firm's gas plan OK'd — The Anchorage Daily News, Anchorage, AK

Rejection of the LNG idea, sometimes referred to as the "all-Alaska" option because the pipeline would not go into Canada, is politically tricky for Palin, as some of its main backers had been strong Palin supporters during her 2006 campaign for governor.

Palin took pains, however, to suggest the LNG idea is still alive, because TransCanada has said its overland pipe into Canada potentially could accommodate a branch line to feed an LNG port. (May 23)

Alaska gov. backs license for natural gas pipeline — AP, Condé Nast

Palin's gas team also dismissed the option of an exclusively LNG project that would supply markets in Asia and Alaska. They said it was less economic and less likely to succeed because it did not address energy needs in the rest of North America. (May 23)

NW Natural's shareholders meeting is disturbed by anti-LNG protest, lawsuit — The Oregonian, Portland, OR

[L]andowner groups said they filed suit against the joint venture that NW Natural has formed with TransCanada Corp. to build a 211-mile pipeline serving a proposed LNG terminal near Wauna on the Columbia River, called Bradwood Landing. The lawsuit seeks to stop Palomar Gas Transmission and its agents from allegedly trespassing on private land or using any information its surveyors glean while trespassing for planning or promoting the pipeline.

The Oregon Department of Energy recently released a study concluding the state doesn't need LNG; LNG already costs far more than domestic gas; and the carbon emissions involved in liquefying, shipping and regassifying imported gas would cause more pollution than domestic alternatives. (May 23)

Pipeline opponents take to the street – and the courtroom — The Forest Grove News-Times, Portland, OR

The lawsuit alleges that that SWCA, Inc., an Arizona-based surveying company working on the Palomar proposal, has been trespassing on private properties west of Forest Grove to survey the land for a gas pipeline project. (May 22)

LNG opponents fighting on two fronts — Oregon Public Broadcasting

Northwest Natural spokesman, Steve Sechrist says that shareholders may  have something to say  about LNG, or pipelines. But he says some analyses of LNG have problems.

Steve Sechrist: “There was a cost estimate for LNG, for example, and assumptions for pipelines that may or may not get built. The assumptions in several cases, are that all of them would get built, and I don’t think that’s an assumption that anyone can make at this point.” [Red bold emphasis added.] (May 23)

CB council to demand voice in LNG siting — The World, Coos Bay, OR

The draft resolution suggested the current federal approval process might be un-American and that the city agreed with Gov. Ted Kulongoski’s position on the matter. The governor has asked the federal government to consider whether Oregon needs LNG in making its decision. (May 22)

Quickie: $80 million and 7 years later, SES abandons LNG terminal plan — The Cunningham Report

After spending seven years and $80 million trying to bring a liquefied natural gas import terminal to the Port of Long Beach, Sound Energy Solutions is closing its offices at the end of the month.

SES - a subsidiary of Mitsubishi Corp. and ConocoPhillips - was created to develop, build and operate the LNG reception terminal at the Long Beach port. In stark contrast to the major presence the company has maintained in Long Beach and within the goods movement industry since it came to town, SES is making a quiet exit with no formal announcement. (May 22)

Analysts: New liquefaction facilities will result in increased U.S. LNG imports — Sutherland LNG Law Blog, Washington, DC

Several analysts cited global market conditions, such as increased costs of liquefaction projects and heightened demand in emerging LNG markets in China and India, as potential challenges to increasing U.S. LNG imports. [Red emphasis added.] (May 22)

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20 May 2008

LNG facility in Mass. Bay takes first delivery — The Boston Globe, Boston, MA

Carrying about 1 billion cubic feet of liquefied natural gas, or LNG, from Trinidad, the ship Excellence became the first to use the deepwater port completed at the end of last year by Excelerate Energy LLC of Houston. Unlike other tankers which deliver liquefied natural gas to storage facilities where the LNG is reconstituted as gas for pipelines, Excelerate's tankers return LNG to its gaseous form on the ship and pump it directly into the pipeline.

"This is an important new source of natural gas delivered by an innovative technology," said Secretary of Energy and Environmental Affairs Ian Bowles. "The additional supply should ease concerns about shortages during the winter months, and offshore delivery poses fewer security and environmental issues than onshore LNG facilities." [Red emphasis added.]

Webmaster's Comments: Better technology, safer, more secure, and in place — embarrassing and mooting late-comers and outdated-technology speculators Downeast LNG, Quoddy Bay LNG, and Calais LNG.

LNG flowing from buoy off the coast of Gloucester — The Boston Herald, Boston, MA

Excelerate Energy LLC has begun pumping natural gas from its huge new LNG buoy system off the coast of Gloucester — a move that could transform the way dangerous liquefied natural gas is handled in the region. [Red emphasis added.]

Liberty Natural Gas to provide Northeast with new supply of clean burning energy [Press release] — PRNewswire, Yahoo Finance

JERSEY CITY, N.J., May 20 /PRNewswire/ -- Excalibur Energy (USA) Inc., a 50/50 joint venture company between Canadian Superior Energy Inc. ("Canadian Superior") and Global LNG Inc., a New York based privately held company, announced today the launch of its $550 million Liberty Natural Gas Transmission Project ("Liberty Natural Gas") as a new source of natural gas to meet the growing energy demands of the Northeast region. Liberty Natural Gas will be a deepwater pipeline system that receives gas fifteen miles offshore New Jersey, which subject to regulatory approvals, is expected to begin to deliver up to 2.4 billion cubic feet per day of natural gas by late 2011.

Webmaster's Comments: Yet another offshore LNG import terminal, the leading-edge technology for the industry. Such terminal siting has the following advantages — advantages that out-rank the three LNG proposals in Passamaquoddy Bay:

Significantly lower risk to civilians;

Fewer security concerns;

Easier expansion;

Better bad weather serviceability.