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And this is just the beginning.

The year 2017 was when the US became a net exporter of natural gas for the first year in history. The production of natural gas has been surging since 2007, when fracking turned into a boom, whittling away at the need for importing natural gas via pipeline from Canada and via LNG from the global markets. Last year, according to the EIA’s just released data, the US exported 129 billion cubic feet (Bcf) more natural gas than it imported. And this is just the beginning:

Exports to Mexico via pipeline have been rising for years as more pipelines have entered service and as Mexican power generators have switched from burning oil to burning cheap US natural gas (the US imports no natural gas from Mexico).

In 2017, natural gas pipeline exports to Mexico surged 12% year-over-year to 1,543 Bcf. But in 2016, a new trend became visible: US natural gas exports via LNG tanker to Mexico (marked in red in the chart below), which rose from negligible in prior years to 28 Bcf in 2016 and to 141 Bcf in 2017. Total exports to Mexico jumped 20% year-over year in 2017, to 1,684 Bcf:

The US has a bilateral natural-gas trading relationship with Canada, both importing and exporting. Exports to Canada have surged from almost nothing in the late 1990s to a peak of 2,145 Bcf in 2016 but fell 5% in 2017 to 2,043 Bcf.

Imports from Canada, while they rose over the past two years, remain in the range established over the past two decades. But due to the surge in exports to Canada, net imports (imports minus exports) have plunged 43% from a peak of 3,600 billion cubic feet in 1999 to 2,042 Bcf:

…click on the above link to read the rest of the article…

Something Unexpected Just Happened In LNG Markets

February 28, 2018

Something Unexpected Just Happened In LNG Markets

In the increasingly topsy-turvy world of liquefied natural gas (LNG) markets, the world’s largest LNG importer could soon be exporting the super-cooled fuel to the world’s second largest LNG exporter – a situation unimaginable, even laughable just a few years ago.

On Monday, news broke that a Japanese consortium, made up of JERA, the world’s largest private LNG buyer, and Marubeni Corp., were planning to export gas to industrial users on Australia’s eastern coast. There is even a possibility that the Japanese consortium will construct an LNG import terminal in New South Wales (NSW), Australia’s most populous state.

A report three days ago in The Australian Financial Review said that the proposed terminal’s imports could represent up to 75 percent of NSW’s gas demand, while plans to increase the number of gas-fired power stations will increase that demand pull.

How could Japan, for all practicable purposes a hydrocarbon anemic country with scant oil and gas resources, import gas to oil and notably gas rich Australia?

The answer is straight forward: In an effort lock in lucrative prices for LNG in the Asia-Pacific region amid limited supply around the start of the decade, Australia went on an LNG export project development feeding-frenzy. Since the country doesn’t have an energy master plan there was no coordination on these massive CAPEX export projects. Adding insult to injury, budget blowouts and cost overruns since then have been the norm, casting further doubt on the wisdom of Australia having as many as ten major LNG export projects.

As a result, Australia will soon overtake Qatar as the world’s largest LNG exporter, with more than 80 million tons per annum (mtpa) of liquefaction capacity. Qatar, however, and likely for geopolitical reasons as much economic, has vowed to increase its production capacity from 77 mtpa to over 100 mpta in the next five years.

…click on the above link to read the rest of the article…

China Is Erasing The Gas Glut

February 23, 2018

China Is Erasing The Gas Glut

China and other countries in Southeast Asia are helping erase the LNG glut, which was thought to last well into the next decade.

China is in the midst of a radical overhaul of how many of its citizens heat their homes. The government has made an aggressive push to scrap coal burning, particularly in smoggy cities, replacing home coal furnaces with natural gas. The effort has been so successful, arguably too successful, that there has been natural gas shortages this winter.

At the global level, China is helping to eliminate the glut of LNG, which many analysts predicted would stretch into the 2020s after a series of high-profile LNG export terminals came online in recent years.

Several of them, including Chevron’s Gorgon LNG facility in Australia, saw tens of billions of dollars’ worth of investment, massive bets on the future of LNG demand in Asia.

At the start of 2017, there was an estimated 340 million tonnes of annual LNG capacity (mtpa) around the world, up by more than a quarter since 2012. But all of the new capacity helped crash prices. At the start of 2014, for instance, spot LNG prices in Asia – the Platts JKM marker – traded at about $20/MMBtu. A year later, spot cargoes were down by two thirds.

The long lead times for LNG export terminals make it hard for the markets to respond nimbly to changes in supply and demand. Sudden large additions of export capacity leave the market drowning in supply, while demand increases at a more gradual pace.

So many new terminals have already come online, but with 114 mtpa of LNG under construction, the LNG markets are thought to be under threat from still more waves of new supply. An estimated 57 mtpa was under construction in Australia, as of last year, with a further 31 mtpa in development in the U.S.

…click on the above link to read the rest of the article…

U.S., Canada Face Off For LNG Dominance

February 20, 2018

U.S., Canada Face Off For LNG Dominance

Considering that the North American shale revolution is the key global energy development of the past decade, it’s surprising that Canada’s natural gas production has actually been falling. Canada is still the world’s fifth largest gas producer, but output has dropped around 15 percent over the past 15 years to 16 Bcf/d.

As a free market economy without the over-influence of a national oil company, Canada’s future gas production is desired by the rapidly globalizing gas market. According to BP, Canada has about 80 Tcf of proven gas reserves, and with low incremental needs, this large endowment could make the country a worldwide gas exporter at some point in the 2020s.

The main problem for Canadian gas production is the decline of its sole export market, the U.S., where dry gas production has risen 35 percent to nearly 80 Bcf/d since 2010. In turn, over the past decade, Canada’s gas exports to the U.S. have been sliced in half to 5.5 Bcf/d. This decline will continue: The EIA projects that U.S. gas production will increase 40 percent by 2040.

Enter Canada’s necessity for LNG, the fastest-growing way to trade gas and a market that constitutes a rising 12 percent of all global use. There is great potential to export LNG off the coast of British Columbia, where cargoes can ship gas produced in western Canada to fast growing Asian markets. Western Canada accounts for around 70 percent of the country’s gas production.

Now already online, U.S. LNG will be a competitor for Canadian LNG. But, even with the Panama Canal expansion, the trip from British Columbia to Asia is still approximately two-thirds shorter than from the U.S. Gulf. Hampered today by a global supply glut, potential western Canada’s LNG projects should come online early next decade, right when expected higher oil prices will make Canada’s oil-linked LNG profitable, and the end of many long-term existing contracts will allow Asian buyers to seek new sources of supply.

…click on the above link to read the rest of the article…

Safety Officials Order Partial Shutdown of Sabine Pass LNG Export Facility After Discovering 10-Year History of Leaks

February 18, 2018

Safety Officials Order Partial Shutdown of Sabine Pass LNG Export Facility After Discovering 10-Year History of Leaks

Sabine Pass, the only liquefied natural gas (LNG) export facility in the country, has reportedly been experiencing safety issues for the past decade, and yet federal safety officials were only informed of this history while investigating the terminal’s latest leak in January. Owned by Cheniere Energy, Sabine Pass is located on the Gulf Coast on the border of Texas and Louisiana.

Regulators became aware of the export facility’s issues after the most recent accident and leak at an LNG storage tank. As NOLA.com reported:

“Supercold liquefied natural gas leaked into a space between inner and outer walls of a major storage tank at the Sabine Pass LNG export facility in Cameron Parish on Jan. 22, and its minus 260-degree temperature created numerous 1-foot to 6-foot cracks in the carbon steel outer tank wall, allowing some of the gas to escape.”

As a result of this recent leak, Alan Mayberry, associate administrator for the U.S. Pipeline and Hazardous Materials Safety Administration (PHMSA) sent a Corrective Action Order to Cheniere. The contents of this communication were not encouraging:

“To date, Sabine has been unable to correct the long-standing safety concerns described above involving the affected tanks, cannot validate the exact source or amount of the LNG that may have leaked into the annulus of the affected tanks, and cannot identify the circumstances that allowed the LNG to escape containment in the first place.”

According to PHMSA, the operators of the Sabine Pass facility don’t know how much LNG has leaked, don’t know how it happened, and can’t fix the problem, which seems like reasons for concern, especially considering problems with this and another tank began in 2 008:

…click on the above link to read the rest of the article…

LNG comes to Boston, a harbinger of the future?

February 18, 2018

LNG comes to Boston, a harbinger of the future?

The most curious natural gas story of the year so far comes out of Boston and seems to have echoes of a deepening Russia-related scandal in Washington. A liquefied natural gas (LNG) tanker bearing natural gas produced in part in Russia delivered its cargo to the Boston area for insertion into the natural gas pipeline system there. Apparently, the Russian company that supplied some of the gas may fall under U.S. sanctions against the financing and importation of Russian goods.

One of the many ironies of the delivery is that the United States is simultaneously importing LNG in one place even as it exports LNG from another. (I’ll explain later why this may become a more frequent occurrence in the years ahead.)

The hue and cry from the natural gas partisans blamed Boston’s predicament on the lack of pipelines to carry growing gas production from the nearby Marcellus and Utica shale deposits to needy Bostonians whose gas supplies had been depleted by a deep winter freeze.

Within the context of this narrow appraisal, the partisans are mostly correct. Attempts to bring more pipeline gas to New England have come to grief, especially in New York state where residents have strongly opposed new natural gas pipelines and storage facilities.

In addition, the state banned hydraulic fracturing—the main method for extracting gas from the Marcellus and Utica deposits—in 2014, claiming the process threatened water supplies. That ban, of course, prevented any shale gas development in southern New York under which the deposits lie. And, it brought into disrepute all things related to hydraulic fracturing or “fracking” including natural gas pipelines and storage facilities.

…click on the above link to read the rest of the article…

Momentous Change in US Natural Gas, with Global Impact

January 2, 2018

Momentous Change in US Natural Gas, with Global Impact

Even China is buying U.S. LNG.

In 2017, the US became a net exporter of natural gas for the first time. It started small in February, when the US exported 1 billion cubic feet more than it imported. By October, the last month for which data from the Energy Department’s EIA is available, net exports surged to 45 billion cubic feet. For the first 10 months of 2017, the US exported 86 billion cubic feet more than it imported. And this is just the beginning.

Exports to Mexico via pipeline have been rising for years as more pipelines have entered service and as Mexican power generators are switching from burning oil that could be sold in the global markets to burning cheap US natural gas. The US imports no natural gas from Mexico.

Imports from and exports to Canada have both declined since 2007, with the US continuing to import more natural gas from Canada than it exports to Canada.

What is new is the surging export of liquefied natural gas (LNG) by sea to other parts of the world.

This chart shows net imports (imports minus exports) of US natural gas. Negative “net imports” (red) mean that the US exports more than it imports:

The first major LNG export terminal in the Lower 48 – Cheniere Energy’s Sabine Pass terminal in Cameron Parish, Louisiana – began commercial deliveries in early 2016 when the liquefaction unit “Train 1” entered service. Trains 2 and 3 followed. The three trains have a capacity of just over 2 billion cubic feet per day (Bcf/d). In October 2017, the company announced that Train 4, with a capacity of 0.7 Bcf/d, was substantially completed and is likely to begin commercial deliveries in March 2018. Train 5 is under construction and is expected to be completed in August 2019. The company is now lining up contracts and financing for Train 6. All six trains combined will have a capacity of 4.2 Bcf/d.

…click on the above link to read the rest of the article…

Fracked Gas LNG Exports Were Centerpiece In Promotion of Panama Canal Expansion, Documents Reveal

July 3, 2016

Fracked Gas LNG Exports Were Centerpiece In Promotion of Panama Canal Expansion, Documents Reveal

At the center of that business, a DeSmog investigation has demonstrated, is a fast-track export lane for gas obtained via hydraulic fracturing (“fracking”) in the United States. The expanded Canal in both depth and width equates to a shortened voyage to Asia and also means the vast majority of liquefied natural gas (LNG) tankers — 9-percent before versus 88-percent now — can now fit through it.

Emails and documents obtained under open records law show that LNG exports have, for the past several years, served as a centerpiece for promotion of the Canal’s expansion by the U.S. Gulf of Mexico-based Port of Lake Charles.

And the oil and gas industry, while awaiting the Canal expansion project’s completion, lobbied for and achieved passage of a federal bill that expanded the water depth of a key Gulf-based port set to feed the fracked gas export boom.

Control of the Panama Canal by U.S. big business and Wall Street has, for over a century, served as a focal point of U.S. foreign policy in the Americas.

While no longer in de facto control of the isthmus as it was during the days of the Panama Canal Zone, Jill Biden’s presence as part of an official Presidential Delegation at the expanded Canal’s opening ceremony symbolized the importance of the waterway and de jure role of the U.S. government in pushing for its expansion over the past several years. So too did the attendance of the U.S. military’s Southern Command (SOUTHCOM).

And in turn, the reported participation of LNG exports giant Cheniere Energy at the kick-off serves as a portrayal of the importance of the Canal’s expansion to the oil and gas industry. The Panama Canal Authority estimates that 20 million tons of LNG may pass through on an annual basis.

…click on the above link to read the rest of the article…

This Six-Year Running Oil And Gas Trend Just Reversed Itself

April 22, 2016

This Six-Year Running Oil And Gas Trend Just Reversed Itself

The U.S. Senate this week approved a bill to speed permitting of new liquefied natural gas (LNG) export facilities. Just as news from one of the world’s most important LNG consumers shows the market isn’t what it used to be.

The place is Japan. Where statistics released Wednesday showed that annual Japanese LNG demand fell for one of the first times in recent memory.

Trade data showed that Japan’s total LNG imports for the fiscal year ended March 31 were down 6.2 percent as compared to the previous fiscal. With the country bringing in a total of 83.571 million tonnes of LNG for the 12-month period.

Here’s the most critical point. This was the first time in six years that Japanese LNG demand has fallen year-on-year.

That’s a crucial data point for the global LNG market. With rampant Japanese demand having been one of the major drivers of positive sentiment — and resulting business expansions — in the industry during recent years.

As the chart below shows, much of that ramp up in LNG demand came following the Fukushima incident in 2011. We can see how nuclear power generation (yellow bars) went to zero after 2011 — and natural gas use (red bars) jumped, along with coal (black).

Japan’s use of natural gas (red) spiked after the Fukushima incident in 2011

But with Japanese nuclear plants now coming back online, it appears that Japan’s rush for natural gas is over. A fact that had been strongly suggested by LNG prices such as the Platts Japan-Korea Marker — which has fallen to as low as $4.25/MMBtu recently, from as high as $20 back in 2012/13 when Japanese imports were surging.

…click on the above link to read the rest of the article…

Four More Whoppers about LNG in British Columbia

March 16, 2016

Four More Whoppers about LNG in British Columbia

The real facts behind Christy Clark’s rosy claims.

BC Premier Christy Clark: a million-dollar website to drum up LNG jobs, but not a single job yet.

The B.C. budget claims the province is making money from shale gas. But last month The Tyee showed the province is pouring more cash into the industry than it is getting back.

In fact the only time the B.C. government made any money from shale gas was during a land lease boom nearly a dozen years ago. Ever since then, revenues have dwindled to next to nothing due to low royalties and taxpayer-funded subsidies to the ailing shale gas industry.

Dig deeper, and four more claims made by the B.C. government turn out to be liquefied natural gas whoppers as well.

New information on employment numbers, shale gas reserves, transmission lines and the LNG promise of economic prosperity show that stretching the truth remains a persistent trend in the Christy Clark administration.

Whopper #1: Vastly less gas to sell than claimed

Let’s begin with the government claim that British Columbia “has more than an estimated 2,900 trillion cubic feet (tcf) of marketable shale gas reserves,” or more methane in the ground than the entire United States.

Last year David Hughes, a former analyst with Natural Resources Canada who mapped much of the nation’s coal and gas supplies, took a hard look at real reserves and found that the government claim had no basis in reality.

Hughes pointed out in a report for the Canadian Centre for Policy Alternatives that the BC Oil and Gas Commission estimated that B.C. only had 376 tcf of marketable shale resources. (Hughes added 40 tcf to this number for good measure, for a total of 416 tcf, to account for possible resources in developing plays.)

…click on the above link to read the rest of the article…

Three Wacky Accounting Numbers for LNG and Shale Gas

March 2, 2016

Three Wacky Accounting Numbers for LNG and Shale Gas

Close read of BC’s budget shows realities of this subsidized industry boondoggle.

Three things don’t add up in the British Columbia budget when it comes to declining revenues from the battered shale gas industry and its non-existent cousin, the province’s liquefied natural gas fantasy.

The first concerns revenue. Premier Christy Clark promised in 2013 that profits from the LNG industry would pour like manna into a $100-billion provincial prosperity fund.

In the months before the election that year, the government persuaded citizens that a complex, high-cost and foreign-owned industry, tied to a volatile greenhouse gas, could somehow make the province debt-free and bless it with Alberta-like prosperity.

Twenty LNG proponents all lined up at the government trough, expecting low royalties and taxes. But not one of the 20 proponents has committed to go ahead with a LNG project, because the economic justification has vanished in a sea of volatility. Many are folding, such as the Douglas Channel LNG project, because of what industry calls “unfavourable market conditions.”

New LNG terminals in Australia, Papua New Guinea and Angola have created an oversupply while demand is falling in key markets like Japan, South Korea and China due to economic stagnation. Prices for LNG are expected to remain in the tank for years or become as volatile as oil.

No matter. Faced with her pet industry’s dire prospects, Premier Clark took $100 million, about what the province will bring in through higher Medical Services Plan premiums, and boldly placed those hard-won tax dollars into B.C.’s newly created LNG prosperity fund.

Clark is trying to preserve the illusion of a revenue stream that doesn’t exist. In so doing, her government has out-Orwelled Orwell with some very creative explanations.

…click on the above link to read the rest of the article…

United States On Path to Becoming Major Exporter of Natural Gas Despite Climate Impacts

February 19, 2016

United States On Path to Becoming Major Exporter of Natural Gas Despite Climate Impacts

The first cargo of liquefied natural gas (LNG) was scheduled for export from Cheniere Energy’s new export terminal in Cameron Parish, in January, but the company reportedly delayed its plans by up to two months due to faulty wiring.

Following the announcement of the export delay, Cheniere Energy sought $2.6 billion to refinance its adjacent LNG import terminal in Cameron Parish which was impacted by extreme fluctuations in the price of oil and gas. The company built the import facility before the U.S. fracking boom took hold, and was therefore saddled with unnecessary import infrastructure in the new age of abundance of domestic gas availability and the prospect of U.S. exports.

Cheniere’s $20 billion, multiphase terminal is one of four LNG terminals in the lower 48 states that got the green light from the Federal Energy Regulatory Commission. And the existing Kenai LNG plant in Alaska, an export terminal operated by ConocoPhillips, was recently permitted to restart operations after closing down in 2013, when operations ceased due to a shortage of gas.

“The Chenier Energy project, as well as the over 40 proposed or approved LNG export facilities around the United States, are a serious threat to our climate,” Gulf Restoration Network organizer Johanna deGraffenreid told DeSmog. She criticized the massive export infrastructure investment craze for “promoting the use of fossil fuels on an international scale.”

But rather than acknowledging the climate risk posed by further expansion of LNG export infrastructure, the U.S. Congress and the Obama administration are moving in the opposite direction.

…click on the above link to read the rest of the article…

Emails: US Government Facilitated LNG Business Deals Before Terminals Got Required Federal Permits

January 5, 2016

Emails: US Government Facilitated LNG Business Deals Before Terminals Got Required Federal Permits

This release of the documents coincides with the imminent opening of the first ever LNG export terminal in the U.S. hydraulic fracturing (“fracking”) era, owned by Cheniere.

The documents came via an open records request filed by DeSmog with the Port of Lake Charles. The request centered around the Memorandum of Understanding (MOU) the Port signed with the Panama Canal Authority in January 2015.

Image Credit: Port of Lake Charles

The records offer an inside glimpse of how — as the U.S. Federal Energy Regulatory Commission (FERC) and U.S. Department of Energy (DOE) weigh environmental and energy policy concerns before handing out LNG export permits — other federal agencies have proceeded as if the permits are a fait accompli.

They also further raise the specter that, as some have highlighted, FERC and DOE merely serve as rubber-stamp regulatory agencies in service to powerful industrial interests. Further, they demonstrate how pivotal the proposed and nearly operationalPanama Canal expansion project is for the LNG shipping industry moving forward.

Missionary Work

While the LNG export company-heavy Port of Lake Charles signed an MOU with the Panama Canal Authority on January 6, 2015, the emails date back to February 13, 2014. The MOU mentions LNG a few times throughout the text.
Port of Lake Charles Panama Canal

…click on the above link to read the rest of the article…

Three Fibs Premier Clark Uses to Sell LNG Dream

December 21, 2015

Three Fibs Premier Clark Uses to Sell LNG Dream

Sorry, it’s not clean. It won’t pay off. It’s not popular. Here’s why.

Why does Premier Clark keep saying LNG will bring a bonanza of jobs and revenues? Photo: Province of BC Flickr.

The more Christy Clark defends her dream of an LNG industry, the more she turns cold gas into hot air. The B.C. premier’s interview with Andrew MacLeod published last week in The Tyee is a case in point. As MacLeod pressed with many LNG-related questions, Clark resorted to three big, bloated fibs.

Fib #1: LNG is ‘clean’

While making our documentary Fractured Land about fracking in B.C., co-director Fiona Rayher and I journeyed to Cornell University to interview Dr. Robert Howarth. He is a global expert on the climate impacts of fracking.

CLARK’S SITE C INCONSISTENCIES

On the massive, taxpayer-funded Site C dam project, our premier remains where she’s always been: all over the map.

First, she told us the power was needed for the enormously energy-intensive LNG industry.

Then she creatively interpretedthe Clean Energy Act to mean that LNG plants could power themselves by burning some of their own gas, saving them money. That would produce three times the greenhouse gas emissions as would electric power. It also means her previous justification for Site C is gone.

Even BC Hydro recently admittedto the BC Utilities Commission that without powering LNG, we wouldn’t need the electricity from Site C until at least 2029.

This dam is therefore an unnecessary taxpayer-funded boondoggle of at least $9 billion that would flood or disrupt30,000 acres of some of the best farmland left in Canada, while violating First Nations’ treaty rights. — D.G.

We told him our premier has affixed the label “Cleanest Fossil Fuel on the Planet” to B.C. LNG (derived almost entirely from a massive increase in fracking in the province’s northeast).

…click on the above link to read the rest of the article…

They’re Killing the Peace River Valley Now

December 17, 2015

They’re Killing the Peace River Valley Now

The $9 billion flaying, then drowning of a fertile zone has begun. We still don’t know why.

Random Acts of Kindness comic panel
Photos by Garth Lenz.

Last month the B.C government commenced the destruction of the fertile Peace River Valley, awarding a civil works contract worth $1.5 billion as construction crews methodically denuded the landscape of trees.

Taxpayers will be on the hook for at least $7.5 billion more by the time the devastation is done. The question looming larger than ever is whether the Peace River Valley must be sacrificed at all.

A range of rising voices insist that every argument made by the government for rushing to build a new mega-dam on the Peace River fails to hold water.

The government-dubbed “Site C Clean Energy Project” will flood scores of kilometers of valley river bottom (much of it valuable Class 1 agricultural land) and eventually generate enough power, says the province, to light up the equivalent of 450,000 homes.

According to one press release, the dam “will provide British Columbia with the most affordable, reliable clean power for over 100 years.” Jessica McDonald, president and CEO of BC Hydro, explained that “Site C is essential to keeping the lights on while maintaining low rates for our customers.”

Bill Bennett, Minister of Energy and Mines added that, “It’s clear that to keep rates low, we must choose the option of building Site C.”

But critics, ecologists, farmers, First Nations, economists and even a joint provincial and federal panel of experts challenge every single government claim about the project. They argue that there is no real need for the project given depressed prices and turmoil in mining, fracking and LNG markets that are supposedly hungry for the power Site C would provide.

Critics also say the high-risk dam, which could eventually cost $13-billion, won’t lower rates for citizens but raise them.

They also explain that hydroelectric dams are not climate friendly or “clean” by any scientific measure.

…click on the above link to read the rest of the article…

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