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Germany Admits it Needs More from Russia than Nordstream 2

Germany Admits it Needs More from Russia than Nordstream 2

During the years the U.S. and its satraps in Poland and the Baltics fought the Nordstream 2 pipeline it was always apparent Germany was in the driver’s seat.  It was also apparent that this would be the wedge issue that would ultimately force Germany to pursue independent policy from the U.S.

Nordstream 2 is and was always a reaction to the U.S.’s meddling in Europe’s energy policy which this cycle of began with the scuttling of the South Stream pipeline in 2013.

From the EU’s perspective changing the rules under which South Stream would operate after the contracts for it were signed was a way of gaining leverage over Russia and Gazprom.  So too was the help protesters in Kiev received to overthrow the Yanukovich government from the U.S. and the EU.

That operation was meant to put the Ukrainian pipelines under EU control where they could dictate terms to Gazprom and choke the profit out of its gas deliveries.  It would also advance NATO and the EU to Russia’s western border and there was to be nothing Putin could do to stop the U.S. from putting nukes targeting Moscow there.

Too bad for them it didn’t work out that way.

This is one of the reasons why the U.S. is so incensed with Russia and Putin over Ukraine.  It’s why his chickenhawks in his cabinet and John McCain pushed so hard for sanctions and weapons support to Ukraine before the dearly-departed Brain Tumor killed him.

Obviously, the other was being stymied in taking over Crimea and forever losing the opportunity to grab the port at Sevastopol.

So, why the history lesson?

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

Is The U.S. Using Force To Sell Its LNG To The World?

Is The U.S. Using Force To Sell Its LNG To The World?

Middle East

The Trump Administration trade policy is nowhere so clear as in the energy area. For years it was thought that the younger Bush Administration was one of the most energy industry friendly in history. But the Trump Administration has gone far beyond that.

Hiring Ray Tillerson, the former CEO of ExxonMobil, as U.S. Secretary of State, sent a strong signal to the entire industry, even though his tenure proved to be temporary.

Prior to that, the Administration withdrew from the Paris Climate Agreement, a long-held priority of Exxon and the entire oil industry. Following hard upon that, the Environmental Protection Agency (EPA) has reduced or eliminated regulations limiting carbon and other pollutants.

Exxon has for more than a decade underwritten the now discredited, right wing attack on climate change as a hoax. Although the energy industry has now publicly acknowledged climate change as a global threat, in practice the subject is still largely ignored.

Going further, the Trump Administration has removed and reduced regulations that hampered the industry expansion, including allowing drilling on both ocean coast, while easing safety regulations that were brought into effect after BP’s Gulf of Mexico disastrous spill, the worst in U.S. history.

Government protected nature preserves are being opened to exploration and drilling for the first time in generations. Added to that was the dropping of regulations that for many years prohibited export of U.S. crude. Since then, the U.S. has become a major player in the global energy industry.

The Administration currently plans to rescind and lower fuel efficiency standards for autos and trucks. That is likely to encourage increased purchase of larger SUVs, increased oil consumption, and rising gasoline prices.

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

What If There Isn’t Enough Energy Going Forward?

Nuttapong/Shutterstock

What If There Isn’t Enough Energy Going Forward?

We’ll be forced to live with less. Maybe a LOT less.

Currently the media is breathlessly cheering the record amounts of US oil production. Stories like this one get top billing on major news websites:

Texas Gulf Coast exports more oil than it imports for the first time (CNN)

It’s a big achievement that highlights a surge in US oil exports, and that shows how the shale boom can make America less reliant on foreign oil.

“It’s a definite milestone. Nobody saw this coming 10 years ago,” said Bob McNally, president of consulting firm Rapidan Energy Group and a former energy official under President George W. Bush. “It’s an unambiguously good thing. It diversifies our dependence from the volatile Middle East.”

Texas is the epicenter of the shale revolution, with soaring production in the oil-rich Permian Basin leading the United States to record output. Rapid technological advances in fracking, the process of unlocking oil and gas deep underground, have dramatically reduced the cost to drill oil in the Permian Basin.

Texas is now on track to produce more oil than either Iran or Iraq. That would make Texas No. 3 in the world if it were a country.

Sounds pretty wonderful, right? Technology advances in the fracking process have enabled the “shale miracle”, resulting in the US producing over 10 million barrels per day for the first time since the 1970s. Think of all the incremental GDP growth that excess oil will power!

If these trends continue, CNN goes on to tell us, the US will become an net energy exporter soon:

US on track to become net energy exporter

The United States still relies on foreign oil — but not as much.

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

Australia Looks To Tackle Its Looming Gas Shortage

Australia Looks To Tackle Its Looming Gas Shortage

LNG carrier

In a strange about-face for the world’s soon to be top liquified natural gas (LNG) exporter, Australia is now considering importing the fuel. On Monday, ExxonMobil, Australia’s top gas supplier, said it is considering importing the super-cooled fuel to help offset an anticipated gas shortage from 2021 going forward as well as protecting its market share.

ExxonMobil is also stepping up exploration off the coast of Victoria and considering developing a gas field called West Barracouta close to an existing field, the oil major also said in an emailed statement on Monday.

“Combined with the existing Gippsland resource and infrastructure, an LNG import facility could ensure ExxonMobil can continue to meet our customers’ needs,” the company said, adding that the facility could become operational by around 2022.

Looming gas shortage Down Under

This disclosure comes as Australia struggles with a natural gas shortage, a unique phenomenon for the gas exporting giant. Late last year, the Australian Competition & Consumer Commission and the Australian Energy Market Operator said that gas shortfalls in the country for 2018 and 2019 would be much worse than originally forecasted. They both predicted a shortfall of nearly 110 petajoules of gas in 2018 and similar in 2019, which represents about one-sixth of the projected amount of gas demand in Australia.

In light of this growing problem, late last year Canberra threated to put gas export regulations in place, but the idea has been put on hold as the government and suppliers work out a deal.

However, upping the ante even more, Australia’s energy market operator warned in March that Victoria, the country’s biggest gas consuming state, could face shortages from mid-2021 due to a rapid drop in supply from the Gippsland Basin Joint Venture, owned by ExxonMobil and BHP Billiton, Reuters said in a report. Related: The Fed Is Driving Down Oil Prices

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

Huge Chinese Demand Fuels The Next U.S. Gas Boom

Huge Chinese Demand Fuels The Next U.S. Gas Boom

China

China’s push for cleaner air and fuel is driving an unprecedented demand for natural gas, and the United States is well-positioned to seize this opportunity and export even more of its growing gas production to the thirsty nation.

U.S. companies have plans for even more liquefied natural gas (LNG) export trains and facilities to come online in the coming years, and this winter’s surge in Chinese LNG demand and imports underpins a second wave of LNG investment in the United States, analysts and company executives believe.

The Chinese push to cut pollution and make millions of households switch to natural gas from coal for heating resulted in China becoming the world’s second-largest LNG importer in 2017, outpacing South Korea and second only behind Japan, the U.S. EIA said last month. Chinese LNG imports surged 46 percent last year. And while China increased its domestic production and pipeline imports last year, it was not enough; natural gas shortages in northern China led to record levels of LNG imports during the winter. Overall, natural gas imports accounted for 40 percent of China’s 2017 natural gas supply, and LNG made up more than half of those imports. True, China is planning to hit an all-time high for natural gas production this year, which includes raising the share of gas in its energy mix—still, domestic production growth will be woefully insufficient compared to its soaring consumption.

So, the United States is all too happy to step in to supply part of that demand.

Cheniere Energy is one such supplier, which signed last month two long-term deals—through 2043—to supply LNG to China National Petroleum Corporation (CNPC), with the LNG price indexed to the Henry Hub price plus a fixed component.

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

Momentous Shift in US Natural Gas, with Global Consequences

Momentous Shift in US Natural Gas, with Global Consequences

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

Something Unexpected Just Happened In LNG Markets

LNG

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

China Is Erasing The Gas Glut

NatGas

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

U.S., Canada Face Off For LNG Dominance

LNG

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

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

Sabine Pass LNG Export Facility

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 2008:

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

LNG comes to Boston, a harbinger of the future?

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

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

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

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

Four More Whoppers about LNG in British Columbia

The real facts behind Christy Clark’s rosy claims.

ChristyClarkLNGInBC_610px.jpg

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.

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…

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