"For much of the state of Maine, the environment is the economy"
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30 Apr 2010
On Friday, the BIA gave a group of Passamaquoddy Tribe members the outcome they had battled for in court for the past five years and cancelled the tribe's 50 year lease with an Oklahoma-based company, Quoddy Bay LNG.
NN has battled the proposed natural gas terminal on tribal land at Split Rock ever since the BIA's original approval in 2005. They have always maintained that the project threatens the ecological health of Passamaquoddy Bay and would destroy an area important to the tribe's cultural, spiritual and economic lives.
In the lawsuit, NN contended that the BIA approved the lease authorizing the construction of the LNG terminal without complying with the National Environmental Policy Act and other federal environmental and historic protection law. [Red, yellow & bold emphasis added.]
Some members of the Passamaquoddy Tribe living on the Pleasant Point Reservation in northeastern Maine have battled the proposed natural gas terminal on tribal land at Split Rock from the project's onset in 2004. They said the project threatens the ecological health of Passamaquoddy Bay and would destroy an area important to the tribe's cultural, spiritual and economic lives.
The ENRLC prevailed in a companion lawsuit involving its Freedom of Information Act requests for records from the BIA. A federal court judge in Maine ruled that the BIA violated FOIA by failing to promptly release the requested documents.
"Quite unlike many other cultures, ours is a history enlivened by a bay rich in marine life, tides and beauty. We are the original occupants of this land, and it is our responsibility to keep it that way. The defeat of Quoddy Bay LNG and the land lease cancellation are irrefutable examples that Passamaquoddy Bay is an inappropriate location for a liquefied natural gas terminal."
Mary Bassett, another member of Nulankeyutmonen Nkitahkomikon, said: "Split Rock rests easier today." She said the group and its supporters will continue to work to protect Passamaquoddy Bay and that "all land, all humans and animal life deserve a healthy environment." [Red, yellow & bold emphasis added.]
Webmaster’s Comments: The UN Convention on the Law of the Sea (UNCLOS) is irrelevant regarding LNG transits into Passamaquoddy Bay. Even if the US had rights of innocent passage under the treaty, the US Coast Guard requirement that Downeast LNG (and Calais LNG) obtain Canada's cooperation for secure LNG transits has already been flatly and repeatedly refused by Canada. It puts the issue on the back burner, and the back burner has no supply of gas.
Senator Lisa Murkowski (R-AK) and experts in Arctic policy are pessimistic that the U.S. will ratify the Law of the Sea Treaty this year, even as [Norway] and Russia say their countries were able to hammer out an Arctic border dispute this week thanks to the Treaty.
Webmaster’s Comments: The US is not a party to the UN Convention on the Law of the Sea (UNCLOS), and — as the treaty clearly spells out — rights under UNCLOS apply only to members of the treaty. Despite false claims by the US Department of State, the US Coast Guard, Sen. Olympia Snowe, and Sen. Susan Collins, Calais LNG, and Downeast LNG have no UNCLOS right of innocent passage to transit Canada's waters into Passamaquoddy Bay.
(Aren't US agencies required to report fraudulent government behavior to their respective Inspectors General when they see it?)
Even if Downeast LNG and Calais LNG were to have UNCLOS innocent passage rights to transit LNG to their terminals, the US Coast Guard has already indicated in its Waterway Suitability Report (WSR) for Downeast LNG that it will not allow LNG ships to transit to US ports in Passamaquoddy Bay without cooperation from Canada. And Canada will not cooperate.
Calais LNG and Downeast LNG cannot bear fruit. They are wasting everyone's time, energy, and money on senseless state and federal permitting, while simultaneously creating a lot of strife.
(Has Calais LNG investor Goldman Sachs also hedged its investment against Calais LNG so that Goldman will make money on Calais LNG's inevitable failure?)
28 Apr 2010
On Friday, BIA cancelled the Passamaquoddy Tribe’s fifty year lease with an Oklahoma-based company, Quoddy Bay LNG. BIA’s decision comes in the wake of nearly five years of litigation and efforts by Nulankeyutmonen Nkihtaqmikon [standardized spelling: Nulankeyutomonen Nkihtahkomikumon] (NN), a group of members of the Passamaquoddy Tribe living on the Pleasant Point Reservation in northeastern Maine. NN was formed to protect their cultural and spiritual traditions from the harmful effects of the proposed LNG terminal on Passamaquoddy Bay. BIA’s decision was also prompted by the Tribe’s decision in June 2009 to terminate the lease. [Bold red emphasis added.]
The Vermont Law School’s Environmental and Natural Resources Law Clinic issued a press release Monday afternoon indicating that BIA canceled Quoddy Bay LNG’s contract with the Passamaquoddy Tribe on Friday. The law clinic represents a group of tribal members that is opposed to the firm’s plans to construct a liquefied natural gas terminal on tribal land on Passamaquoddy Bay.
Webmaster’s Comments: A stake has been driven through the vampire's heart. Nulankeyutomonen Nkihtahkomikumon has persevered and won the day!
Quoddy Bay LNG in 2008 withdrew its state permit application for the terminal, after the Federal Energy Regulatory Commission dismissed its application. Since then, the company has been sued by two Massachusetts firms for nonpayment of environmental and engineering services provided.
This week the U.S. Bureau of Indian Affairs (BIA) cancelled Quoddy Bay LNG's contract with the Passamaquoddy Tribe to use a portion of the tribe's land to construct an LNG import terminal. Quoddy Bay LNG President Don Smith told the Bangor Daily News that he intends to request that the BIA reconsider its decision.
Webmaster’s Comments: Truth and Don Smith avoid each other.
26 Apr 2010
At a minimum, though, Goldman faces “headline risk”, likely further probes and distractions from running the business, says Mike Mayo, an analyst with CLSA. The board is firmly behind Mr Blankfein, but a top-level sacrifice may eventually be needed, especially if the firm’s legal troubles escalate. Britain’s Financial Services Authority has launched an investigation. Frank Partnoy of the University of San Diego’s law school expects class-action and other private suits over, among other things, Goldman’s failure to inform markets last year that it had received notification of a probe. IKB is considering its options, as is AIG, which lost a fortune selling Goldman credit protection on duff CDOs.
Webmaster’s Comments: Goldman Sachs is Calais LNG's permitting financial backer.
Webmaster’s Comments: Ms. Dioron's claim that it was always under control defies logic; there was an unexpected explosion. It is fortunate no one was injured.
The explosion not only took neighbors off guard but also worried some of the Ludlow firefighters who told 22News they thought the battle would be a lot worse when they could see the smoke from about a mile away.
Webmaster’s Comments: This is one of three US LNG terminals under construction. Thirteen additional import terminals have already been permitted, in addition to the already-overbuilt LNG import infrastructure — over-mooting Calais LNG and Downeast LNG.
Last week Cameron LNG submitted an application to FERC requesting permission to install a back-up natural gas compressor for the terminal's boil-off gas system. In its application, the company says that installing this back-up compressor will diminish the need for gas flaring when its primary boil-off gas compressor is offline for maintenance.
H. Davis Thames, president of Cheniere Marketing, told the Platts Rockies Gas and Oil conference last week that he believes that the global LNG market should move away from long-term contracts based upon oil prices. Instead, LNG prices should track spot natural gas prices more closely, and exporting LNG from the United States could encourage that trend.
Among other troubling indications, it appears to be the firm's strategy to buffalo landowners into granting access and rights-of-way by telling those who object that their property will be seized via the legal theory of eminent domain. Or that the pipeline perhaps will be placed in such a way as to be even more of a detraction. Furthermore, Oregon LNG won't even specify exactly where they intend to place the pipeline. [Red emphasis added.]
[I]n Yamhill County, public sentiment runs contrary to the LNG efforts and extends to county government. Last month, the Yamhill County Board of Commissioners passed a resolution opposing the natural gas pipeline, saying they have not seen a demonstrated need for the gas to be piped through the area, affecting farmland.
In 2000, shale gas only represented 1.0 percent of US output, today it accounts for 20 percent and could surpass 50 percent by 2030, a study published by research firm IHS CERA found last month. With the sudden boost in production, the United States has even re-routed shipments of liquefied natural gas (LNG) to the European market, depressing demand for Russian pipeline gas. [Red, yellow & bold emphasis added.]
The discovery of shale gas in the US has lowered energy prices and limited need for LNG imports, putting a question mark over the need to rapidly start the technically challenging and costly Shtokman project. [Red, yellow & bold emphasis added.]
23 Apr 2010
Canaport LNG is due to receive a cargo of the fuel April 26, according to vessel tracking data compiled by Bloomberg. The vessel, Bilbao Knutsen, can carry as much as 135,049 cubic metres of LNG, or about 2.9 billion cubic feet of natural gas. The terminal can put about one billion cubic feet a day of natural gas into pipelines. The ship is due after leaving Trinidad and Tobago, according to the data.
Goldman Sachs' chief executive, Lloyd Blankfein is being sued by shareholders.
Webmaster’s Comments: Goldman Sachs is the money behind Calais LNG's permitting.
Rowe, who served for eight years as Maine’s attorney general, said he would work with other states to fight against harmful NAFTA policies and would get heavily involved to resolve the stalemate with Canadian officials over liquefied natural gas tankers in Passamaquoddy Bay. But Rowe said the state needs new ideas and new approaches to improve the business climate. [Red emphasis added.]
Webmaster’s Comments: One the other hand, Rowe's website states:
"Our natural environment, our coasts, rivers and lakes, mountains, fisheries and wildlife, and vast forestlands draw millions of visitors to Maine every year, and our natural resource base is the foundation of our agricultural, forest products, and commercial fisheries industries. Continued, careful stewardship and collaborative approaches will enable Maine to continue to protect special places in Maine's environment, sustain natural resource-based industries, and boost nature-based tourism.
"As Maine's Attorney General, I sought to protect what is special about Maine's natural environment." [Bold emphasis added.]
Mr. Rowe is speaking out of both sides of his mouth.
Webmaster’s Comments: The candidates need to do their homework. There is no need for LNG in Maine; and, if there were a need, it should be sited offshore — safely away from civilian populations.
Webmaster’s Comments: Les Otten is a candidate for Governor and supports LNG development in Maine.
But that attempt ultimately failed, a failure symbolized by the “delisting” of the company by the New York Stock Exchange after it had fallen from a high of $18 per share to well less than $1. Eventually, the company was dissolved.
The three-part plan was enacted on April 19. It approves the formation of a five-member LNG Threat Committee to keep the council informed of developments in the Weaver’s Cove Energy endeavor to obtain a permit for the facility.
It also calls on Jamestown to host a “congress of town councils” in which Newport County councilors would meet to ratify a joint resolution stating the opposition of county communities against the LNG proposal.
Lastly, an existing LNG panel – the Jamestown-based LNG Working Group – will be invited to share its assessment of the proposed LNG facility in a presentation to the Jamestown Town Council. [Red emphasis added.]
The Republican governor said although natural gas is a critical piece of the state's energy future, he is not convinced the offshore gas facilities are needed, or could significantly lower prices for customers. [Red, yellow & bold emphasis added.]
Governor Christie reaffirmed his administration’s commitment to environmental protection and articulated the administration’s opposition to Liquefied Natural Gas (LNG) facilities off the New Jersey coastline.
Today, Governor Christie added to his administration’s environmental protection accomplishments by announcing his opposition to LNG facilities off of New Jersey’s coastline. Under the Deepwater Port Act, the Governor of an adjacent coastal state has significant veto power over an LNG project.
During a Moss Point public meeting in October 2008, leaders from Transco pipeline, which delivers natural gas to customers in the Northeast and Southeast through a 10,500-mile system, said the 15.5-mile project would cost around $53 million. [Red emphasis added.]
The agreement has been signed between Gazprom's UK-arm, Gazprom Global (GGLNG), and Sempra Energy's Sempra LNG and allows GGLNG to supply LNG to Sempra LNG's receipt terminal in Lake Charles near the US Gulf Coast.
HOUSTON, April 22 /PRNewswire-FirstCall/ -- Cheniere Energy, Inc. ("Cheniere") announced today that it has agreed to sell its 30 percent limited partner interest in Freeport LNG Development L.P. to Zachry American Infrastructure, LLC, an independent member of the Zachry group of companies, located in San Antonio, Texas, and Hastings Funds Management (USA), Inc., a wholly owned subsidiary of Westpac Banking Corporation, acting on behalf of various institutional investors.
[H]is opposition to the NorthernStar Natural Gas LNG project has dominated his tenure so far. He says LNG tankers would make the river more dangerous, that the project could ruin Cathlamet's historical charm and that there are better uses for Cathlamet's waterfront than tying up LNG security and service vessels.
Former Secretary of State Bill Bradbury has made a lot of his staunch opposition to liquefied natural gas terminals in Oregon. Now, he's turned it into a new television commercial being launched by his campaign for the Democratic gubernatorial nomination.
Webmaster’s Comments: Bradbury's video ad is available at the above link.
“So this ad allows us to present a compelling message and a clear contrast between Bill and John Kitzhaber [who is equivocal on LNG]. If you are looking for a clear difference between the candidates this is it.”
Webmaster’s Comments: Bradbury's video ad is available at the above link.
About a dozen people, several who live along the pipeline route in Warrenton and Jewell, attended the event at the Judge Guy Boyington Building and testified about their negative experiences with the company.
The LUBA decision sent two of the 2008 approvals back to Clatsop County for further work, ruling that the county hadn't shown the project fits within the size limitations for the Bradwood site, nor that it adequately protects threatened and endangered fish and traditional fishing grounds as required by law.
His father, former Gov. Pat Brown, became an adviser to Indonesia's military junta after his second term ended in 1967 and helped Pertamina, Indonesia's national oil company, line up billions of dollars in loans from American banks.
Pertamina then set Pat Brown up with an oil brokerage firm, called Perta USA, that received slices of petroleum imports into California, and the elder Brown made his offspring partners in the firm – all except son Jerry at the time.
Jerry Brown's sister, Kathleen, acknowledged receiving a share of Perta USA when she ran for governor in 1994, but it's never been revealed whether he also received some of the firm's proceeds after leaving the governorship. [Red emphasis added.]
NEW YORK, April 22 - Sempra Energy plans to send nearly three cargoes a month to its Costa Azul LNG terminal in Baja California, Mexico, as supply from Indonesia ramps up, the head of Sempra's LNG division said on Thursday.
Despite low gas prices in the United States compared to in Asia, Sempra does see some returns from shipping gas across the Pacific to Baja California. "For us, the margins at Costa Azul are there," said Hulse.
Although natural gas supplies this week also increased 0.3 percent from the previous week, liquefied natural gas (LNG) imports fell 12.2 percent and Canadian imports dropped 0.6 percent. An increase in production since last week more than offset these declines in imports. [Bold red emphasis added.]
“LNG use in the US markets is dropping, and it does look like a repeat of last year,” Allen said. “For that reason we have not changed our estimate of U.S. LNG use for the year, despite the strong start to the year due to very cold weather.” [Red, yellow & bold emphasis added.]
Jay Copan, senior vice president of corporate affairs for the American Gas Association, told attendees at the LNG16 conference in Algeria that he expects LNG imports to play an important role in maintaining a diverse natural gas supply for the U.S. market despite increased production from U.S. shale gas plays.
Webmaster’s Comments: What Copan did not say is just as significant as what he did say: He said nothing about needing additional US LNG import terminals.
21 Apr 2010
This rally coincides with two important LNG happenings this month: The state of Oregon is considering extending a lease for Oregon LNG on the publicly owned Skipanon Peninsula in Warrenton. At the same time, Oregon LNG is being investigated by the Federal Energy Regulatory Commission for misconduct and abuse of stakeholders in the permitting process.
Developers have completed a land-use application for a pipeline to be built along with the proposed LNG terminal on Coos Bay, said Patty Evernden, Coos County's planning director. She expects to post the application on the county's Web site this week and schedule a hearing for the end of May.
MaxID Corp, a leading global provider of identity solutions delivered and assisted the United States Coast Guard in deploying its MaxIDValidate Mobile Software running on the iDLMaxG multi-modal handheld devices. The MaxIDValidate software is currently being used to validate each crew member on-board LNG tankers bound to the United States from Yemen. The software integrates biometric and biographic data from relevant U.S. data repositories and is based on required crew information submitted from the inbound ship.
20 Apr 2010
Goldman Sachs is angry – very, very angry. How dare the SEC file such a wing and a prayer case against us, senior executives splutter.
Only now is the full extent of the recklessness becoming clear. Financially, Goldman Sachs has managed to protect its back better than most, but sad to say, a growing volume of literature on the absurdities of the boom in credit derivatives places this doyen of Wall Street investment banks right there at the centre of it all.
The swaps and synthetic CDOs [collateralised debt obligations] … infringed two of the basic principles of insurance – that you must own the asset you are trying to insure, and what's more that you can only insure it once. Through swaps it is possible both to insure assets you don't own and insure them multiple times over, thus creating a direct incentive to burn the house down.
For bankers, there is no allegation so bad as to be accused of deceiving your own clients. Banks are built on reputation and trust; once that goes, they are finished. Andersen, the accounting giant, was utterly destroyed by client desertions after being charged over the Enron collapse.
An already inevitable clear-out of the Goldman Sachs old-guard is likely to be accelerated as a result of the SEC charges. I'd be amazed if Lloyd Blankfein is still chairman by the end of the year. Full catharsis will take much more. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Calais LNG's permit financing is provided by Goldman Sachs.
Both in the UK and Germany, opposition parties are demanding that Goldman Sachs be blackballed from government work at least until the outcome of the SEC’s fraud charges are known. That could be years.
There is nothing worse than to be accused of deceiving your clients. Who will want to do business with a bank suspected of double crossing those it deals with? The possibility of a meldown similar to that which befell Andersen after being charged over the Enron collapse cannot altogether be discounted.
The client desertions will come first at the edges of the Goldman revenue stream. Governments will stop using the bank for advisory work, corporations may have clauses in their articles of association that prevent dealings with banks charged with deception. The same may be true of some investors, such as pension funds.
This afternoon’s quarterly results from Goldman might lead you to the conclusion that it has already surged back. But the other way of looking at the latest profits bonanza is as Wall Street’s last hurrah. The shutters are already coming down fast. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Goldman Sachs is Calais LNG's permit financial partner.
Webmaster’s Comments: Calais LNG boasts of Goldman Sachs as its financial backer.
Also important to Les Otten: saying yes whenever possible. That means yes to wind, tidal power, LNG, nuclear power and even off-shore drilling in the Gulf of Maine -- anything, he says, to wean Mainers off of expensive and finite foreign oil. …. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Apparently Maine Governor candidate Les Otten does not understand that imported LNG is an expensive, foreign, and finite source of energy.
The cash-strapped town of Gloucester, Mass., portrayed in ‘The Perfect Storm,’ contends that it’s a high-risk terrorist target and entitled to Homeland Security money.
Kirk says the danger is real. The mayor wants to upgrade police and fire communications, build an emergency operations center, and train first-responders, among other goals. The town can't afford any of that without outside help. [Red, yellow & bold emphasis added.]
Hess wants to own a piece of Mount Hope Bay, with no compensation or any offset for the loss of this property, not to mention the loss of recreation opportunities, the loss of a fishery and the loss of commerce and businesses.
Webmaster’s Comments: This op-ed piece does not even mention the 4¼-mile-long subsea cryogenic LNG pipeline. The US Department of Transportation would require boaters to travel up to an extra 8.5 miles around the LNG ship berth in order to avoid the subsea pipeline Exclusion Zone running from the berth, through the bottom of Mount Hope Bay, and up Fall River to the land-based LNG facility.
The state claims in a letter sent to Adm. Thad Allen, commandant of the Coast Guard, that the captain of the port for the agency's southeastern New England sector violated the National Environmental Policy Act by not undertaking an environmental assessment, or issuing an environmental impact statement or making a finding of no significant impact, before it recommended the terminal.
"Many significant adverse environmental impacts to the human environment that are associated with such shipments have been identified to, and are well known to the USCG, yet it has illegally chosen to simply ignore all of them in the issuance of the 2009 [letter of recommendation] without consideration of such impacts," Rhode Island Special Assistant Attorney General Terence Tierney wrote.
Additionally, Tierney argued that the Coast Guard said in its denial to Rhode Island that the letter of recommendation was a form of "input as subject matter expert" to FERC, which means the agency is attempting to exempt itself from NEPA by following its own guidance and not complying with federal law.
Top officials, including state Department of Conservation and Natural Resources Secretary John Quigley and state Department of Environmental Protection Deputy Secretary John Hines, are slated to speak at the event.
Safety, Agriculture, Villages and Environment Inc. (SAVE) is hosting the forum "Pipelines, Communities and Safety: The Current and Future State of Affairs for Chester County" at the Octorara Primary Learning Center, 87 Highland Road, Atglen.
Analysts with Tudor, Pickering, Holt released a report yesterday stating that "[s]hale gas has changed the LNG business," and that previous forecasts of LNG volumes to be imported to the United States will likely prove to have been overly optimistic. [Red, yellow & bold emphasis added.]
FERC cited new pipelines, particularly the Rockies Express Pipeline connecting Wyoming to eastern Ohio and the resulting improvements in distribution, as one of the main factors behind reductions in price volatility and worked to reduce regional differences in gas prices, along with new LNG terminals in the US. “The United States is closer than ever before to being a single natural gas market with congestion limited to a few markets for a few periods during the year,” the report said.
A new research report form [sic] Tudor, Pickering, Holt (TPH) is predicting that LNG shipments to the US this year, will drop to 1.8bnft3pd, compared to the country’s current regasification capacity of around 15bnft3pd. Clearly not mincing its words, the report states: “Shale gas renders US LNG imports nearly unnecessary over the next five to 10 years”. As a result, the US is expected to become the buyer of last resort. [Red, yellow & bold emphasis added.]
NEW YORK, April 20 (Reuters) - U.S. gas traders might experience a touch of deja vu this summer when, for the second year running, an unneeded, bearish barrage of natural gas shipped from overseas fails to land on U.S. shores.
[A]s European and Asian markets show surprising demand resilience despite the economic downturn, U.S. natural gas prices slump and supply growth stutters, the U.S. might be spared from additional incoming cargoes.
Tudor Pickering Holt Energy analysts on Friday said: "We are lowering forecast 2010 U.S. imports from 2.5 bcfd to 1.8 bcfd on the view that better-priced Asian/European markets will attract the market's spot cargoes." [Red, yellow & bold emphasis added.]
The Gas Exporting Countries Forum (GECF), made up of nations controlling 70 per cent of the world’s gas reserves, has dropped an Algerian proposal to cut gas exports, thereby proving it is no “Gas OPEC”.
The US emerged last year as the world’s biggest gas producer, narrowly eclipsing Russia, although – unlike Russia – it still consumes more gas than it pumps. The increased output was due to a parallel round of technological improvements in a field so esoteric that it went unnoticed by most market watchers.
The genie of abundant, affordable gas supplies was out of the bottle, at least in North America. That ruined most gas exporters’ expectations that the US would become a significant market for liquefied natural gas (LNG), and put the economics of capital intensive gas liquefaction projects in jeopardy. [Red, yellow & bold emphasis added.]
“Whilst unconventional LNG does have an, albeit limited, role to play, the significant impact of unconventional gas on the LNG industry is more likely to be the reduction in LNG demand that it causes.
We have certainly seen this in North America where shale gas has significantly impacted LNG demand,” he said. [Red, yellow & bold emphasis added.]
“The Explorer will stay until autumn to receive LNG via ship-to-ship and to regas the LNG,” said Andree Stracke, chief commercial officer of Excelerate, an LNG trading company based in The Woodlands, Texas, that’s half-owned by RWE AG. “The vessel is under regas charter” to Kuwait National Petroleum Co.
Excelerate’s Exquisite, which loaded an LNG cargo at Cheniere Energy Inc.’s Sabine Pass terminal in Louisiana on April 16, may bring the cargo to Kuwait, said Charles Martin, director of analysis at Waterborne Energy Inc., a Houston-based provider of LNG shipping data.
Webmaster’s Comments: Kuwait has purchased LNG from the US!. Plus, this demonstrates advantages of regasification-vessel-as-terminal: storage can move ad hoc to where LNG is needed, LNG trans-shipment is easily done, and regasification is done offshore — safely away from civilian populations, unlike proposed, unsafe, and superfluous Downeast LNG and Calais LNG.
19 Apr 2010
The case the US regulator has brought against Goldman is damning. It alleges that just before the subprime bubble burst in 2007, the bank worked with a hedge fund manager, John Paulson, to market certain subprime mortgage-related securities. Goldman did not tell the purchasers that they were buying an interest in loans hand-picked by Mr Paulson, who took a very bearish view of the subprime market. Or that he had chosen them for their high likelihood of default.
The buyers were also not informed that Mr Paulson’s purpose in structuring the deal was to take a short position against the investments they were making. This trade ultimately netted him roughly $1bn in profits, while the buyers lost their investment.
Webmaster’s Comments: Goldman Sachs is the funding behind Calais LNG's permitting. What does this news say about these bedfellows?
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they're about to do it again
The world's most powerful investment bank [Goldman Sachs] is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates.
[A]s the presidential campaign heated up, the accepted explanation for why gasoline had hit $4.11 a gallon was that there was a problem with the world oil supply. ... But it was all a lie. While the global supply of oil will eventually dry up, the short-term flow [of oil] has actually been increasing. In the six months before prices spiked, according to the U.S. Energy Information Administration, the world oil supply rose from 85.24 million barrels a day to 85.72 million. Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Not only was the short-term supply of oil rising, the demand for it was falling — which, in classic economic terms, should have brought prices at the pump down.
And here's the real punch line. After playing an intimate role in four historic bubble catastrophes, after helping $5 trillion in wealth disappear from the NASDAQ, after pawning off thousands of toxic mortgages on pensioners and cities, after helping to drive the price of gas up to $4 a gallon and to push 100 million people around the world into hunger, after securing tens of billions of taxpayer dollars through a series of bailouts overseen by its former CEO, what did Goldman Sachs give back to the people of the United States in 2008? Fourteen million dollars. That is what the firm paid in taxes in 2008, an effective tax rate of exactly one, read it, one percent.
Instead of simply imposing a fixed government levy on carbon pollution and forcing unclean energy producers to pay for the mess they make, cap-and-trade will allow a small tribe of greedy-as-hell Wall Street swine to turn yet another commodities market into a private tax collection scheme. This is worse than the bailout: It allows the bank to seize taxpayer money before it's even collected. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Calais LNG's permitting money is coming from Goldman Sachs. Are these the kind of people who should be messing with our future?
Lifting of the moratorium has not softened the Canadian position…. A spokesman for Prime Minister Stephen Harper told the Portland Press Herald this week that officials remain opposed to allowing LNG tankers through Head Harbour Passage.
That angers Sen. Kevin Raye, R-Perry, who accuses Canadian officials of blocking economic development opportunities in Washington County while aggressively expanding the energy-based economy just across the border.
“If it turns out to be ineffective at protecting Maine’s interests, we should revisit it,” said Raye, the Senate minority leader. “I remain gravely concerned about the belligerence of the Canadian government.” [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Belligerence? Canada is in perfect synch with the world LNG industry terminal siting best safe practices. Calais LNG and Downeast LNG are defying their own industry's safety advice.
There is no comparison between Canaport LNG, on open water five miles outside of Saint John, requiring no transits past population centers, as opposed to Calais LNG and Downeast LNG that would place thousands of New Brunswickers, Passamaquoddys, and Mainers in federal Hazard Zones while transiting up a long, winding, and difficult waterway.
The LNG projects simply need to move outside of Passamaquoddy Bay to be able to both satisfy LNG industry best practices and to sidestep Canada's prohibition. So why won't they do it instead of bellyaching about Canada?
Such inflammatory political statements are pandering to LNG supporters without considering reality.
In the early part of the decade, Kvisle thought North America would need every cubic foot of natural gas it could get its hands on. Then new drilling technology unlocked huge gas volumes from shale formations right at home, so there was no need for LNG imports.
"I consider ourselves fortunate that the projects did not get through the regulatory process, and as a result we didn't spend a lot of money on them," Kvisle said. [Red, yellow & bold emphasis added.]
The following link leads to a YouTube.com page containing a video.
"Study after study shows we're awash in natural gas. We have well over a 200-years' supply, by current estimates." — T. Boone Pickens [Red, yellow & bold emphasis added.]
The City of Fall River and the Rhode Island Department of Environmental Management have filed separate appeals of the U.S. Coast Guard's Letter of Recommendation filed in the Weaver's Cove LNG proceeding.
The following link will access a PDF file.
In addition to increased gas production in the mid‐Atlantic area and expanded pipeline and storage capacity, new market area Liquefied Natural Gas import capacity appears to have reduced winter price volatility in New England. Over the course of 2009, 2 Bcfd of sendout capacity was added at the Northeast Gateway terminal in Massachusetts Bay and the Canaport terminal in St. John [sic; Saint John], New Brunswick. A fourth terminal, Neptune, off the northern coast of Massachusetts, began operation with a possible additional sendout of 750 MMcfd.
During the course of this winter, there were days when these terminals as well as the Everett terminal near Boston accounted for half of New England’s gas supplies. On those days—days nearing all‐time natural gas demand peaks in the Northeast—the basis from Henry Hub never exceeded $5.25 MMBtu. In the past, gas commonly reached a premium of $10‐15 per MMBtu on peak days. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Existing natural gas infrastructure satisfied need and has leveled out natural gas prices. There is no market justification for the additional LNG import terminals proposed by Calais LNG and Downeast LNG. Plus, there are over 30 pipeline projects in the works to bring shale gas to the Northeast, further mooting LNG projects in Passamaquoddy Bay.
Shale gas has destroyed demand for liquefied natural gas imports in the US, sinking cargoes into a deep freeze for perhaps the next 10 years according to a new research report by Houston-based securities analyst Tudor, Pickering, Holt.
“We got a lot of capacity out there that is under-utilised,” Pursell said, adding therefore that it is “highly unlikely” any new regasification terminals will be built in North America. [Red, yellow & bold emphasis added.]
GE Energy Financial Services is injecting further funds into a $1.1 billion (€818 million) LNG regasification terminal under construction in Pascagoula, Mississippi, US, aimed at increasing supplies of gas to the northeastern and southeastern US.
Prices were facing pressure from increased drilling activity, a sign of growing production, and mild weather--which can stifle demand for the fuel and help boost gas inventories. [Red emphasis added.]
Platts LNG Daily [subscription required] reports that two companies, Examr and Hoegh LNG, submitted final proposals for the LNG import project proposed for Jamaica. The piece also notes that the Jamaican government will announce its selection for the project in the first week of May.
Gas price is expected (ask Robert Riley) to remain low because of the oversupply of cheap shale-gas in the US (a product that will emerge elsewhere) and the massive increase in LNG from Qatar (and other places), Qatar possibly the only exporter that can make money on both the US and European markets. [Red, yellow & bold emphasis added.]
Clatsop County hearings officer Peter Livingston has decided that despite this week's Oregon Land Use Board of Appeals remand of two land-use issues on the Bradwood Landing liquefied natural gas project, the county will not abandon the approval process already underway for the company's supplemental land-use applications.
In the Pacific Northwest, NW Natural Gas claims that the Palomar pipeline and Bradwood Liquefied Natural Gas (LNG) terminal will bring “clean” fuel to the United States. But the truth is the real impacts of LNG importation are enormous, and extend far beyond the Pacific Northwest.
The extraction-based economy ravaging the Peruvian Amazon thrives on transferring the natural resources of Peru’s forests to foreign markets – a bad deal for both the environment and Peru’s indigenous and rural communities. Today the main foreign market for Peruvian LNG is Mexico, and there are no LNG import facilities on the western coast of the United States. But the Palomar Pipeline, backed by Northwest Natural, is a critical piece in a proposed network of LNG pipelines and import terminals which would throw open the doors of the US market to LNG from Peru and other countries in western South America. [Red, yellow & bold emphasis added.]
The FINANCIAL -- According to RIA Novosti, the Gas Exporting Countries Forum (GECF), a "gas equivalent" of the OPEC oil cartel, will convene on Monday in the Algerian city of Oran to decide whether to raise prices for gas supplies to Europe and other regions, the Russian energy minister said.
Qatar, GECF member and the world’s biggest gas exporter, has invested heavily in building new LNG facilities and is not interested in reducing production. Russia, another of the group’s biggest exporters, no longer supports the idea either, despite recent comments from Gazprom bristling at the success of US shale gas, and its problems with the growing preference for cheaper spot pricing for pipeline gas. [Red, yellow & bold emphasis added.]
"When you drop the (OPEC) quota, someone else is not taking your place, but in gas, you have two important countries that are not members -- the United States and Australia," Khelil told journalists after the meeting, adding the group had instead decided to strive for oil-gas parity -- someday. [Red emphasis added.]
Webmaster’s Comments: Paying US$13 instead of the current US$4 for the same amount of natural gas? Is that how LNG would reduce the cost of natural gas, as New England LNG developers like Downeast LNG and Calais LNG claim?
Russian Energy Minister Sergei Shmatko also said they had also agreed that liquefied natural gas should not compete with other forms of gas. [Red, yellow & bold emphasis added.]
“The producers are living in a fantasy world if they think that they can influence prices by cutting production,” because it won’t be enforceable, John Fahy, managing director of energy consultant Eras Ltd. in London, said in a telephone interview.
The fuel’s value is falling as Qatar raises liquefied natural gas output 44 percent this year and new supplies from North American shale rock cut U.S. imports to their lowest in more than a decade last year. Purchasers have reduced their take from long-term contracts priced to oil and bought more from spot markets such as the U.K., where the price for same day delivery is 21 percent below its five-year average.
Production of unconventional natural gas in the U.S. is sustainable, Khelil said today. It has led to an oversupply of LNG import capacity in the U.S. and Australian LNG output will exacerbate the surplus, he said.
Webmaster’s Comments: The world natural gas industry is screaming, "The US has an overabundance of domestic natural gas, and an overabundance of LNG import terminals."
ORAN, Algeria -(Dow Jones)- New natural gas production from the U.S. is leading to an excess of capacity in liquefied natural gas, Algeria's energy minister said Monday. [Red, yellow & bold emphasis added.]
Mr Khelil blamed the significant drop in spot market gas prices, which have fallen 28 per cent in the US since the start of this year to about $4 per million British thermal units, on the global economic crisis and new production technologies that have unlocked large volumes of unconventional “shale gas” in the US, ending the country’s reliance on imports. [Red, yellow & bold emphasis added.]
MOSCOW, April 19 (Reuters) - Rising shale gas production, which allowed the United States to surpass Russia as the world's largest gas producer in 2009, is a "problem" for state-run gas giant Gazprom, a government minister said on Monday. [Red, yellow & bold emphasis added.]
[T]he more we rely on gas to generate electricity--to meet incremental demand, including from EVs, and to back out higher-emitting sources like coal--and the more gas we put directly into vehicles, the likelier it is that we'll need to import LNG to balance supply and demand. If the international gas market were controlled by an OPEC-like cartel that was able to constrain output to put pressure on prices, then eventually this would translate into higher gas prices here--closer to crude oil's--and that would make both natural gas vehicles and EVs running on gas-generated power less competitive with fuel-efficient gasoline and diesel cars. So for both EVs and NGVs, it's good news that the gas producers meeting in Algeria seem unlikely to be able to match OPEC's market power any time soon.
[U]sing natural gas rather than diesel in vehicles could actually increase climate change, says Robert Howarth, professor of ecology and environmental biology at Cornell University. "You're aggravating global warming more if you switch," he says.
Howarth is basing his conclusion on a preliminary analysis that includes not only the amount of carbon dioxide that comes out of a tailpipe when you burn diesel and natural gas, but also the impact of natural gas leaks. Methane, the main component of natural gas, is much more effective at trapping heat than carbon dioxide, so even small amounts of it contribute significantly to global warming. When you factor this in, natural gas could be significantly worse than diesel, he says. Using natural gas would emit the equivalent of 33 grams of carbon dioxide per megajoule. Using petroleum fuels would emit the equivalent of just 20 grams of carbon dioxide per megajoule.
But for all the shortcomings of Howarth's analysis, it points to a real need. Before Congress passes any bill promoting natural gas, a thorough study of the potential impact needs to be taken into account, including the energy it takes to obtain it, and the impact of methane leaks. [Red emphasis added.]
15 Apr 2010
On Wednesday, Canaport LNG spokeswoman Kate Shannon said construction of the third tank is complete, but that it must still be cooled to the proper temperature for storing LNG. That process is expected to occur within the next two weeks.
Back in March, Phil Ribbeck, the president of Repsol Energy North America said the company aims to double its winter output to New England in 2010-11, up to 800 million cubic feet of natural gas a day.
Webmaster’s Comments: Canaport LNG has a maximum capacity of 1.2 billion cubic feet (BCF) / 28 million cubic metres of natural gas output per day. Even after doubling output in 2010-2011, it will still be operating at just 66% capacity. If there actually were a need for more natural gas, you can bet Canaport LNG would be increasing output further.
"The emergency services in this area of New Brunswick have neither the resources nor the training to even begin to respond to an LNG incident. To consider imposing this risk on those who cannot protect themselves is not the right way to be a good neighbour." [Red, yellow & bold emphasis added.]
[The following was originally reported today in the Portland Press Herald under the headline, "Canada still barring ship access to proposed LNG sites in Maine"]
Ottawa's reaction followed a news release by LNG advocates in Maine noting that the corridor ban had ended and urging Canada to drop its opposition to tanker traffic through Head Harbour Passage, the access route to two proposed terminals in Passamaquoddy Bay. Those projects, in Calais and Robbinston, are seeking state and U.S. permits. But without some compromise by Canada, they cannot be built.
[Maine Senate Minority Leader Kevin Raye, R-Perry], who grew up in Eastport, said the Canadian government's position amounts to a threatened blockade of U.S. waters. "The U.S. does not accept that erroneous interpretation," he said of Canada's control of water access to the terminal sites. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Maine Senator Raye ignores the US Coast Guard's own prohibition of LNG tankers into US waters in Passamaquoddy Bay. The Coast Guard's Letter of Recommendation for Downeast LNG — and Calais LNG's route includes the same transit route as Downeast LNG — requires the LNG applicants to obtain Canada's coordination and cooperation for safe and secure transits through the waterway. That has nothing to do with the innocent passage issue that Senator Raye and others are focusing on.
Even if Canada were to allow LNG transits, but refuse coordination and cooperation, the US Coast Guard has already indicated it will refuse LNG carriers into US waters in Passamaquoddy Bay.
The Portland Press Herald on Thursday quotes a spokeswoman for Canadian Prime Minister Stephen Harper as saying the government remains opposed to the terminals in Robbinston and Calais in Washington County. Canadians say ships going to those terminals would have to pass through their waters. [Red, yellow & bold emphasis added.]
Legislators hoped lifting the moratorium would encourage more cooperation between Maine and Canada and pressure the country into backing down from its opposition to proposed liquefied natural gas terminals in Down East Maine. But Canadian officials have already reiterated their stance against LNG terminals. "Nothing has changed in terms of our position," New Brunswick Southwest Member of Parliament Greg Thompson told Canada's CBC News. Maine and Canadian officials have battled over whether tankers en route to LNG terminals in the state can pass through Canadian waters. [Red, yellow & bold emphasis added.]
The board's decision to appeal came only after learning fines and penalties owed by Southern LNG for overdue taxes would be significantly lower than what had been anticipated, said Chairman Terry Tolbert.
The request will involve extending the time allowed for the export of LNG, but it will involve the same amount of gas approved for export by the energy department in a 1999 extension of the export permit, ConocoPhillips spokeswoman Natalie Lowman said.
It’s a Groundhog Day moment for the Clatsop County Commission
This charade has cost the county valuable administrative time. In political terms, these ridiculous decisions have devalued the commission's credibility. At the heart of the commission's Bradwood votes was an assumption that what's good for NorthernStar Energy LLC (Bradwood's developer) is good for Clatsop County. And in political terms, it has seemed as though commissioners, except for Rohne, were in NorthernStar's pocket.
14 Apr 2010
"Under the old system, we were practically giving up the right of way for foreign interests, namely Canadian interests, to pass right through our state and deliver low-cost energy," says John Hansen, a spokesman for the group Maine Jobs First, which sought the new corridor development process.
"This gives us a lot more introspection, a lot more opportunity, to get a reasonably fair share of the pie, if there's going to be one," Hanson says. "Plus we need clean energy desperately in the state at a reasonable cost."
Buxton says the law ends a moratorium on the development of energy corridors in the state. That moratorium was established in reaction to Canada's stated opposition to a proposed liquefied natural gas facility in Washington County. Although an LNG plant operates in [Saint John], New Brunswick, Canadian officials oppose the Washington County plan because of the navigational difficulties posed in that area of Passamaquoddy Bay. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Tony Buxton, Maine Jobs First, and friends initially argued that Maine LNG projects would reduce the price of energy in the state, but now they're faulting Canada for "delivering low-cost energy."
Once again, the manufactured myth is repeated that New Brunswick and Canada oppose LNG in Washington County. Both of those governments have repeatedly indicated they do not oppose LNG in Washington County or in Maine. What they do oppose is LNG in Passamaquoddy Bay, and they will ensure it never happens.
We've mentioned it before, and here it is again: Downeast LNG and Calais LNG are guaranteeing their own failure by remaining inside Passamaquoddy Bay. They could avoid that certainty by moving outside of Passamaquoddy Bay. The fact that the developers remain in the bay indicates they are merely project zombies, collecting their paychecks while waiting to keel over.
The decision to lift the moratorium is a goodwill gesture toward Canada and Canadian industries that want to transport electricity or products such as natural gas through Maine to large American markets, [Barry Hobbins, chairman of the joint standing committee on utilities and energy] said.
"Nothing has changed in terms of our position," he said. The federal government has safety and environmental concerns about LNG tankers sailing through the narrow passage. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Maine has finally recognized Canada's dominant position on this issue.
Yesterday, FERC released its Final General Conformity Determination for Pennsylvania for the AES Sparrows Point LNG terminal and pipeline project. FERC concluded that LNG terminal and associated pipeline would conform to Pennsylvania’s air quality standards.
The following link will access a PDF file.
The Coast Guard is disestablishing the permanent safety zone at Trunkline LNG in Lake Charles, LA and replacing it with a security zone with new boundaries. The Coast Guard is also establishing two additional permanent security zones on the waters of the Calcasieu River for the mooring basins at Cameron LNG in Hackberry, LA and PPG Industries in Lake Charles, LA. The Coast Guard is also disestablishing the Calcasieu River ship channel moving safety zone and replacing it with a moving security zone. The revised moving security zone extends channel edge to channel edge on the Calcasieu Channel and shoreline to shoreline on the Calcasieu River, 2 miles ahead and 1 mile astern of certain designated vessels while in transit on the Calcasieu Channel or Calcasieu River.
On Monday, [the Oregon Land Use Board of Appeals (LUBA)] ruled the county still hasn't proven that the $650 million Bradwood Landing LNG project meets standards for small- to medium-scale development, the only kind allowed at the Bradwood site 25 miles east of Astoria. The board also decided the county hadn't shown that the project would adequately "protect" salmon and salmon fishing grounds in the Columbia River as required by law.
The board found that an area of riverbed slated for dredging to accommodate LNG ships needs to be included in the 100-acre zoning limit for the project, but an area occupied by the gas pipeline can be subtracted, so a new calculation of the project size is needed.
The states of Oregon and Washington, Columbia Riverkeepers and the Nez Perce Tribe are appealing the federal [FERC] approval, arguing the commission made its decision before environmental reviews and state permits were in. [Red, yellow & bold emphasis added.]
The Costa Azul terminal, the first LNG receiving port on the West Coast of North America, serves Mexico, California and the U.S. Southwest, according to Sempra. BP’s Tangguh LNG supplies LNG to the terminal under a 20-year contract.
Pipeline transportation of natural gas is less capital intensive and complex compared with LNG projects. While the key parameters that determine pipeline construction costs are diameter, operating pressures and length, for LNG transportation, costs are largely a function of the distance between liquefaction and regasification terminals.
However, while gas pipelines can run across various national borders and can easily connect to existing national transmission grids, for LNG, further investments are required to transport natural gas to the domestic transmission grid. Over moderate distances, costs incurred from natural gas pipelines are lower than those of LNG. [Red emphasis added.]
Yet now major energy companies such as Exxon believe in shale gas and America faces a domestic supply glut of natural gas. LNG terminals are now discussed in terms of how much they can export. [Red, yellow & bold emphasis added.]
NATS [subscription required] suggests in its LNG Week in Review that the driving force behind LNG markets in the United States and Western Europe is the push to refill natural gas storage inventories. NATS also notes that price advantages for U.S. LNG destinations over European terminals has eroded.
Separately, analysts with Raymond James released an analysis yesterday predicting that domestic natural gas supplies and LNG imports are "threatening to overwhelm [U.S. gas] storage this summer." [Red, yellow & bold emphasis added.]
Webmaster’s Comments: US domestic natural gas supplies and existing LNG import infrastructure are proving to be sufficient. Additional LNG import infrastructure would be a waste of money.
In the U.S., shale gas will account for 50 percent of supply by 2035, up from 20 percent now, according to IHS Cambridge Energy Research Associates. [Red, yellow & bold emphasis added.]
[Russia's] plans – as well as those of existing and potential LNG exporters in the Middle East and North Africa – to ship LNG to the U.S. market, have been dealt a serious blow by what experts call a “silent revolution” in U.S. shale gas production. Its low cost (an IEA analysis rates it at $5 per Mbtu) combined with a 10-percent return rate promises a growing role of shale gas in the U.S. energy mix, at the same time largely reducing its needs for imported LNG. This and the biggest drop in gas demand over the last 40 years (in 2009 it fell by 4-5 percent globally) is expected to bring a gas glut of some 200 billion cubic meters by 2015. [Red, yellow & bold emphasis added.]
12 Apr 2010
Energy Information Administration economists now expect the Henry Hub natural gas spot price to average $4.44 per million British thermal units this year, a 49¢ increase over the 2009 average, but a significant downward revision from the $5.17 projected earlier. The EIA says "the price outlook is lower primarily because of an average 2 billion cubic feet per day upward revision to the 2010 domestic natural gas production forecast."
The number of working natural gas rigs has increased by almost 200 since the end of last year to 950 at the end of March. That will offset the slight decline expected in net natural gas imports of natural gas and LNG. [Red, yellow & bold emphasis added.]
April 12 (Bloomberg) -- Natural gas futures fell in New York, on speculation that rising production and tepid demand will send U.S. stockpiles soaring in the months ahead. [Red, yellow & bold emphasis added.]
PET continues to actively manage its natural gas price risk. Natural gas prices in North America have weakened considerably since the beginning of 2010. The Trust remains cautious with respect to near term natural gas prices as impacted by strong supply from shale gas plays in the United States, increased LNG supply, weak industrial gas demand due to the economic recession and recent strength in the Canadian dollar.
Webmaster’s Comments: Construction is anticipated to be completed in 2011, adding to the gross over-build of LNG import infrastructure.
The Nikiski LNG plant is a prime customer for Cook Inlet gas. And the prime customer for the LNG the plant produces is Japan. While Japanese demand has fallen, the plant still does enough business to operate -- and thus, keep Cook Inlet wells operating.
"At least 20,000 square kilometres of the Beaufort Sea is contested -- and perhaps much more," he added. "The push into Arctic oil and gas also creates pressure to resolve the long-standing dispute over the status of the Northwest Passage. With the Arctic sea ice receding, companies will wish to ship oil and liquefied natural gas through those waters to refineries and markets in the eastern United States."
Webmaster’s Comments: The probability of wanting to ship LNG to US ports via the Northwest Passage is becoming more remote, due to market impacts from domestic shale gas.
9 Apr 2010
Baerg said the company issued a media alert for the Sunday test just in case the smoke is visible. The test, which is expected to last no more than an hour, will be on the ventilation system that will be used during the construction of the tanks’ interiors.
The test will involve the controlled release of dozens of smoke flares simultaneously inside the southernmost tank. The company will use nontoxic flares similar to those fire departments use for training.
Webmaster’s Comments: This is one of the three US LNG import terminals currently under construction, adding to the already grossly-overbuilt LNG import infrastructure. There are 13 additional LNG import terminals already permitted but not under construction, compounding the surplus of terminals issue.
Since the 10 existing US LNG import terminals have been running at only a small fraction of capacity, and since North America is drowning in domestic natural gas supply, with over 30 pipeline projects in play to bring supply to the Northeast, increasing availability and reducing prices here, Calais LNG and Downeast LNG are superfluous, lost causes.
Webmaster’s Comments: So much domestic natural gas is getting in LNG's way.
BP and ConocoPhillips, developers of the Denali natural gas pipeline proposed for Alaska, have begun the process to conduct an open season for capacity on the pipeline. However, Platts LNG Daily [subscription required] reports that if the open season does not attract commitments for at least 85% of design capacity, project backers may consider other options, including connecting to an LNG export facility.
LNG sales are usually done in long-term contracts with adjustments for inflation, and if an LNG spot market index is used similar to the method planned o be used for North America sales it could result in a royalty value substantially different than the actual sales value of the LNG.
Another way there could be larger volumes of gas moving to Southcentral is if a large LNG project were built in Valdez, which could require up to 3 billion cubic feet a day of gas moving through a 48-inch pipeline built to that plant. As a part of its open season planned this summer, TransCanada Corp. will offer the alternative of a pipeline to Valdez for any customers interested in building a large LNG plant.
Then came shale gas. U.S. gas production is now up for the first time in a decade. Throw in demand reduction forced by the recent recession and it looks as if over-, not under-supply may be America's issue.
Begging the question: where will all of the new LNG developments sell their gas? [Red, yellow & bold emphasis added.]
Shale gas will account for 50% of US supply by 2035, up from the current 20%, according to a report by IHS Cambridge Energy Research Associates. [Red, yellow & bold emphasis added.]
U.S. development of its natural gas resources could reduce dependence on foreign sources of energy and some political analysts believe liquefied natural gas could be exported across the Atlantic to undermine Russia's periodic threats to cutoff European customers. [University of Houston chemical engineer and energy expert Michael Economides] agrees.
"Twenty-five European countries depend for more than 75 percent of their oil and gas on Russia," Economides added. "Now, if for instance, the United States, with all this gas, can actually export gas to Western Europe, it turns the whole energy independence conundrum on its head, because we clearly have enough gas to change the equation in Europe." [Red, yellow & bold emphasis added.]
“The reality”, Yazev said, “is that 51 billion cubic meters of gas is being produced in the United States today and that is 6.7 percent of the total amount of gas being produced in America. Today, the US imports 41 billion cubic meters of gas and says it will import significantly more”. He said, “There has been something of a technological breakthrough in shale gas” which has already halted projects to build LNG plants in many countries. The United States, China and Australia have already begun to stop building facilities to produce and handle LNG, though some sites will be reserved.
Canada has also joined in shale gas production. Yazev said that he thinks Russia must absolutely study all the facts related to producing shale gas, since the impact this non-traditional source of energy could be significant on both Russia’s own market and on the country’s export potential
8 Apr 2010
Public Hearing to be Convened on Controversial Washington County Facility
PORTLAND, ME March 18, 2010 – Conservation Law Foundation (CLF) hailed today’s decision by the Maine Board of Environmental Protection to take jurisdiction over, and hold a public hearing on, a liquefied natural gas facility and associated pipeline being proposed by a group led by an ex-legislator from Washington county, Augusta insiders seeking to block an energy corridor proposed by Governor Baldacci, and an arm of the banking giant Goldman Sachs.
CLF opposes the project. Sean Mahoney, CLF vice president, and director of its Maine Advocacy Center, notes that the project’s environmental impacts are inappropriate, given the lack of need for new natural gas supply in Maine.
“Given the current glut of natural gas, the projected significant increase in domestic sources of natural gas and the projected lack of any increased demand for gas from current levels, moving forward with the project is a waste of resources and provides false hope for a part of Maine that is in desperate need for real solutions.” [Red, yellow & bold emphasis added.]
PROVIDENCE — Rep. Deborah Ruggiero, D-Jamestown, will host an event in Jamestown April 26 for residents to discuss with state leaders Hess LNG’s proposal to bring liquefied natural gas tankers through Narragansett Bay. She will be joined by Sen. President M. Teresa Paiva Weed, D-Newport.
“The Hess LNG terminal [would] be environmentally and economically detrimental to Aquidneck Island and Jamestown, negatively impacting tourism, the marine industry, fishing and the tourism industry. This facility [would] provide only a few short-term jobs at the expense of long-term jobs in the marine trades, tourism, fishing and retail. Tourism is a $680 million dollar industry in Newport. Cruise ships are on a tight schedule and if bridges close for a tanker those tourism dollars [would] go elsewhere. Also, Narragansett Bay, Beavertail and Fort Adams State Park are held in public trust for public benefit not to be conveyed to a private company for profits,” Ruggiero said. [Red emphasis added.]
Webmaster’s Comments: Human error can never be ruled out.
THE LONGTIME boyfriend of a state lawmaker from Queens lobbied Albany last year on behalf of a company that plans to build a liquefied natural gas terminal off the Rockaways, raising eyebrows in her district.
While the JP Morgan-Cheniere deal could reap benefits in the longer term, finding lucrative deals will be difficult short term as weak U.S. gas prices make it hard to generate profits from sending gas there.
As a U.S. LNG importer, Cheniere has struggled the make profits in recent years, after building the biggest LNG import terminal in the United States on the bet that LNG tankers would flock to the United States.
Large increases in U.S. domestic supply, from the growth of unconventional gas plays like shale, has meant that U.S. LNG imports have not increased as was anticipated three or four years ago, and Cheniere's Sabine Pass terminal has received only sporadic deliveries.
Webmaster’s Comments: The US has significantly overbuilt LNG import infrastructure, with even 13 more already-permitted terminals standing by. Existing US import terminals have been operating at under 10% of capacity. Projects like Calais LNG and Downeast LNG were already 7 years late when they began.
Without continued exports, some have warned that the Southcentral electricity and space heating market is too slim to entice continued production. The problem has gotten bad enough that natural gas distributor Enstar recently predicted it would be importing LNG by 2013, barring dramatic changes in the Cook Inlet production picture.
Both ventures aim to be in service by around 2020, with plans to deliver about 4.5 billion cubic feet of gas per day to North American markets via larger lines to Canada. TransCanada's other option is smaller in size and cost - between $20 billion and $26 billion - for a liquefied natural gas facility that would export the fuel by ship.
Some lawmakers have become skeptical of the idea of a mainline to North America because of other gas plays ahead of Alaska's and improved methods to tap natural gas stored in shale formations elsewhere. There's also the question of whether there will be sufficient demand beyond the next decade to make a major project succeed for all involved.
Like TransCanada's project, the Denali offer includes offtakes for gas delivered within Alaska and through Canada. While Denali isn't putting out a second possibility -- a smaller line straight south to Valdez for LNG exports -- Fackrell said that lacking bids on 85 percent of capacity in this initial open season, there's room for recrafting a smaller line or considering a line for LNG export, instead of through Canada.
Just days after the Feds approved the state backed TransCanada-ExxonMobil Alaska Pipeline Project starting to take producer bids for gasline space May 1, their competition BP-ConocoPhillips Denali Project is now asking for virtually the same thing.
Attention now turns to the next few months, when the competing projects plan to court North Slope gas producers and seek shipping commitments as part of what's called "open season."
In its filing Wednesday with the Federal Energy Regulatory Commission, Denali noted the risks involved. It's seeking leeway to consider other options -- a scaled-down project, an entirely different project, such as a line to a liquefied natural gas plant, or allowances to drum up additional support for the original -- if it doesn't get commitments for at least 85 percent of the line's capacity at open season.
Webmaster’s Comments: North American natural gas is, relatively speaking, dirt cheap.
CHEYENNE, Wyo. -- El Paso Corp. said today that construction of the $3 billion Ruby gas pipeline from Wyoming to Oregon is on track to begin later this spring following Federal Energy Regulatory Commission approval of the project.
El Paso's project, many experts believe, could eliminate the need for some or all of the three liquefied natural gas import terminals that have been proposed in Oregon. Much of the gas imported to an LNG terminal is expected to flow to customers in California, as is the gas in the Ruby pipeline, putting the projects in competition for the same customer base.
Webmaster’s Comments: US domestic natural gas supply may trump the proposed Oregon LNG import projects, as is the case in the Northeast.
Providing coverage on the first of as many as four planned public meetings on eight supplemental applications filed by Bradwood Landing LNG, the Daily Astorian reports that Clatsop County staff recommended conditional approval of five of the eight applications.
US supply assumptions have been turned upside down in the last 3 years, they observed at the Apr. 7 natural gas breakout session at the Annual Energy Outlook Conference cosponsored by the US Energy Information Administration and Johns Hopkins University’s School for Advanced International Studies. “I sometimes wonder if we would have built 14 bcf of LNG import capacity if we’d known about this,” said Benjamin Schlesinger, president of Benjamin Schlesinger & Associates LLC, Bethesda, Md. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: Schlesinger's observation is right on target — the US has grossly overbuilt LNG import capacity.
NYMEX natural gas prices have fallen substantially below NYMEX Appalachian coal prices, which have remained stable over the past month (see Exhibit 1). This has re-established the economic incentive for coal-to-gas substitution in US power generation.
Webmaster’s Comments: Goldman Sachs predicts lower LNG imports into the US — undermining support for Calais LNG — while the Energy Information Agency (EIA; see story below) predicts greater LNG imports.
Is anyone convinced yet that the natural gas industry and government have no grasp on realities of the natural gas market?
The U.S. Energy Information Administration (EIA) predicts in its Short-Term Energy Outlook that LNG imports to the United States will increase by approximately 0.5 Bcf/d in 2010 over last year. The report also notes that if global LNG demand decreases while global LNG supply increases, LNG imports to the U.S. market may increase by a greater margin this year.
Webmaster’s Comments: The predicted LNG import increase is equivalent to ½ the capacity of one large LNG import terminal. Since US LNG terminals have been averaging at only around 10% of capacity, the predicted increase is insignificant.
Hot on the heels of news that the Energy Information Administration's weekly oil inventory data is miscalculated (which we covered in a recent podcast) comes new revelations that the agency's natural gas production numbers are junk, too.
In the next EIA-914 report, due out on April 30, the agency will use a new methodology to both revise January's numbers and analyze data for February. Exactly how the statistics will change is yet to be confirmed, but at the very least, the EIA says it will use more recent data in its production estimates for smaller companies (switching to data only 6-18 months old, rather than several years), and it will recalibrate data monthly, rather than annually.
[M]onthly output volume doesn't seem to matter nearly as much as the weekly natural gas inventory numbers—and those are still telling a story of massive oversupply. [Red, yellow & bold emphasis added.]
The developments in the US market also has implications for Canada. The ceo of Nova Chemicals recently said that the growth of US natural gas capacity may make natural gas production in Canada less economical, which in turn could lead to a feedstock shortage for Canadian petrochemicals producers. [Red, yellow & bold emphasis added.]
As before, the latest proposal would require petroleum and natural gas facilities that emit greater than or equal to 25,000 metric tons of CO2 equivalent in a year to report. Covered facilities would include offshore petroleum and natural gas production, onshore natural gas processing, natural gas transmission, underground natural gas storage, liquefied natural gas (LNG) storage, and LNG import and export, plus, in a departure from the April 2009 proposal, natural gas distribution and on-shore petroleum and natural gas production. At present, however, the Agency is not proposing to include crude oil transportation in its reporting system.
Ill at ease and at a crossroads, the Russian gas behemoth Gazprom has lately been struggling to redefine itself, after being hit by an economic double whammy of a global oversupply of gas and lower demand projections for gas in the near future.
The shale gas boom is also hitting Gazprom hard in other export markets. Gazprom’s ambitions to grow a major business in North America based on liquefied natural gas (LNG) imports from Russia now face considerable challenges, as the shifting landscape in shale gas production is forcing many Canadian companies to investigate and invest in the booming energy potential.
As long as unconventional gas supplies continue to grow in the North American market, the long-term pricing environment is unlikely to be sufficient to support the economic development of high-cost projects, such as the Shtokman liquefied natural gas project in the Russian Arctic or the Yamal LNG project, researchers at Wood Mackenzie found.
With the United States consuming less liquefied natural gas, gas exporters like Qatar have been diverting LNG to the European market, further putting downward pressure on spot market gas prices. [Red, yellow & bold emphasis added.]
5 Apr 2010
Shale gas, said Jonathan Lewis, senior vice-president of Halliburton's drilling and evaluation division, is "fundamentally changing the energy landscape in North America and is doing so with unprecedented speed."
The U.S. Coast Guard proposed to establish new and modify existing regulated navigation areas (RNAs) and safety/security zones off the coast of Massachusetts in the vicinity of the liquefied natural gas (LNG) deepwater ports (DWPs) in the Boston Captain of the Port (COTP) Zone. Comments on this proposal should be submitted by June 1. [Red emphasis added.]
Agency after agency, on the local, state and federal level, have said an LNG facility doesn't belong in Mount Hope Bay or in a residential area at Weaver's Cove. It is too dangerous to public safety and too damaging to the economic development of the region. Weaver's Cove needs to face reality and end its quest to bring a project to the SouthCoast that the public in Massachusetts and Rhode Island overwhelmingly opposes.
[A]s we await the FERC decision, Hess LNG President Gordon Shearer continues to deluge the media with tired old arguments that do not address the dangers that his LNG shipments would pose — much less acknowledge the availability of recently discovered gas reserves in the U.S.
Unlike Shearer’s LNG, which comes from foreign sources, the vast American reserves are located in the mid-Atlantic states, which means gas could be delivered to New England through ordinary pipelines. [Red & yellow emphasis added.]
News video and interview available from the page below.
Webmaster’s Comments: Gordon Shearer ignores reality in rationalizing his project.
Recently, Mining Minister James Robertson appeared to suggest that moves by Government to accelerate the introduction of liquefied natural gas, LNG as Jamaica's main source of electricity generation, replacing petroleum-based fossil fuels, could speed the recovery of bauxite/alumina. At its height bauxite/alumina is said to have netted in the region of US$500 million for the Jamaican economy.
This is a quick cheat sheet for the 95 percent of Alaskans who don't understand the intricacies of gas line progress but would like to be able to follow along when other people talk about it. So if you'll be patient with me now, I'll resist the urge to jump in and correct you when you try to explain to someone else why an oboe needs two E flat keys and three different fingerings to play an F.
Advocates note Obama has placed a natural gas pipeline in Alaska on a list of top five green energy projects for the United States. However, opponents say new technology to exploit gas locked in shale deposits in the Lower 48 undermines the need for the natural gas pipeline to feed U.S. markets.
"The amended notice does reference a single hearing, which is the proper way in which to notice a hearing that will start on a specific date and time and that we anticipate will be continued to dates certain," he wrote.
[T]he additional hearings listed in the county's public notice were intended to be held only as needed to continue Tuesday's proceeding. If four hours aren't enough to hear everyone, the hearing will be continued from 3 to 7 p.m. Thursday at the same location. Two potential hearing dates are scheduled for 3 to 7 p.m. April 13, and April 15.
With the abundance of natural gas in our own country and Canada, opponents such as Adams are concerned the pipeline could be used to export gas overseas. What was considered paranoia a few years ago is today garnering a second look. [Red emphasis added.]
[T]he strongest argument against coal, nuclear power, and LNG terminals has been the discovery of massive amounts of "unconventional" natural gas in the U.S. over the last ten years. What made producing that gas possible? A modest $185 million investment in unconventional gas technology in the early 1980's, which was then modified by the gas industry itself over the years. But simply drilling for that gas will have huge environmental effects unless we can find ways to do it better. [Red, yellow & bold emphasis added.]
Webmaster’s Comments: LNG does not lower the price of natural gas in the United States, impeaching claims by Calais LNG and Downeast LNG that their projects would lower the cost of energy. Moase's opinion is in keeping with the data showing LNG imported near Boston costs significantly more than the natural gas arriving by Maritimes & Northeast Pipeline prior to Canaport LNG injecting gas into that pipeline.
The upcoming meeting of the Gas Exporting Countries Forum (GECF) in the Western Algerian city of Oran on April 19 is expected to discuss a proposal for a natural gas supply cut, to shore up falling prices.
If a consensus on the proposal was reached, this will amount to Opec process of setting quotas. Such a move would rekindle concerns of energy-consuming developed countries over the creation of a gas cartel - so-called Organisation of Gas Exporting Countries (OGEC). [Red, yellow & bold emphasis added.]
Webmaster’s Comments: LNG prices would increase. Overbuilidng LNG import infrastructure more than it is already overbuilt makes absolutely no sense. There is a 100-year sea of domestic natural gas already available in North America, there are three more LNG import facilities under construction, and there are an additional 13 LNG import terminals already permitted. Plus, there are over 30 pipeline projects to bring plentiful domestic natural gas to the Northeast, evening out supply and prices across the US. The Calais LNG and Downeast LNG projects make no energy or economic sense.
Apr 05, 2010 – The global LNG industry is in a crucial stage of it development as a key supplier of natural gas to the world markets. Natural gas has been touted as the fuel of the future due to its clean burning nature, thereby forecasting a positive outlook for future demand. However, in the current scenario, with the economic downturn, the natural gas demand and thereby the LNG demand has slackened. Also, increases in natural gas supplies from unconventional sources have altered the supply situation, inducing a surplus in supply. In this scenario, the global LNG industry faces a significant challenge in the short to medium term. [Red & yellow emphasis added.]
1 April 2010
Platts Gas Daily [subscription required] reports that Canadian Superior has said that it expects to file permit applications this summer for the proposed Liberty LNG deepwater port project and that the company is evaluating joint venture options related to the project.
Webmaster’s Comments: Offshore, safely away from civilian populations — unlike Calais LNG and Downeast LNG.
As we debate this, natural gas is being recovered from the recently found Marcellus shale deposits – one of the largest in the world – in New York and Pennsylvania. This increase in domestic natural gas production will decrease all LNG imports in the Northeast.
Meanwhile, domestic supplies of natural gas to New England and the Northeast are increasing thanks to CanaPort [sic] and two truly offshore LNG facilities operating off of Massachusetts (none of these LNG facilities are owned by Hess). [Red & yellow emphasis added.]
Stone said that this terminal would be the fifth in New England and that there is already a wealth of natural gas in the region, adding that there is “no clear compelling need for another LNG terminal.” [Red & yellow emphasis added.]
Captain Mark P. O'Malley, Captain of the Port for Sector Baltimore, informed AES Sparrows Point LNG this week that no update is required at this time for the project's Waterway Suitability Assessment (WSA).
JACKSON COUNTY, Miss. -- Stamford, Conn.-based GE Energy Financial Services announced Wednesday it is acquiring a 30 percent interest in Gulf LNG Energy's $1.1 billion liquefied natural gas terminal, being assembled on 40 acres on Bayou Casotte in Pascagoula.
"We can buy much larger quantities of LNG with the help of JP Morgan than we could by ourself," Charif Souki, chief executive officer of Cheniere Energy, told Reuters. "They have a balance sheet and we have assets, which is a pretty good match."
Recently Gov. Ted Kulongoski’s (D-Ore.) office submitted comments to FERC and the National Marine Fisheries Service (NMFS) regarding NMFS' analysis of the environmental effects of LNG vessels delivering cargos to the planned Bradwood Landing LNG regasification facility. Specifically, the Governor's natural resources policy director states that, in light of the U.S. Coast Guard's concerns regarding the external ballast intake screens proposed by Bradwood Landing LNG, NMFS' Biological Opinion of the project should consider the impact on Columbia River fisheries of the LNG vessels' unscreened ballast and cooling water withdrawals.
Explosives (High Yield)
After the events of Sept. 11 became clear by the carnage unleashed by al-Qaeda, the U.S. quickly learned how their operatives had factored in the use of jet fuel as a major component of their means of attack. With this said, liquified natural gas (LNG) must also be considered as a significant potential threat for high yield explosives. A Sandia National Laboratories report considered four ways of a terrorist attack against a tanker: (1) ramming with another large ship or vessel, (2) triggered explosion, such as a sub-surface mine, (3) an external assault with an explosive charge and (4) a hijacking.
Webmaster’s Comments: The Klaxon and Sandia National Laboratories said it, we didn't.
Passamaquoddy Bay-area emergency response resources fall far below the capacity to handle such a disaster, and establishing that capability would be cost-prohibitive and impractical — especially due to cross-boundary impacts and realities.