JD SUPRA BUSINESS ADIVSOR. Shortly after finalizing its revised procedures for reviewing pending liquefied natural gas (“LNG”) export applications, the Department of Energy (“DOE”) issued final authorizations for two facilities to export LNG to countries that do not have a Free Trade Agreement with the United States (“non-FTA countries”).
The DOE’s revised procedures apply only to exports from the lower-48 states and explicitly exclude Alaska, given the potential utility of issuing conditional authorizations for unique Alaskan projects. More here.....
Pipeline stake expected to fuel Veresen LNG project, Calgary Herald, By Dan Healing, Calgary Herald September 22, 2014 7:37 PM ... US pipeline investment will better connect U.S. Rockies gas with Veresen Inc.'s ...
Alaska Dispatch News by Dermot Cole. The key question mark about the state-backed effort to expand natural gas distribution in Fairbanks remains the price, with the release of new information put off until the end of the year.
The staff and board of the Alaska Industrial Development and Export Authority say the revised timetable on the gas trucking plan has nothing to do with the fall election, but is a consequence of a complex and challenging project with many moving parts made more difficult by a compressed schedule.
Governor Sean Parnell (NGP Photo) said yesterday. "Alaska is well-positioned to bring gas to Alaskans and markets beyond."
See Pipelines International Report. -dh
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We consider this Alaska Journal of Commerce piece by Tim Bradner to be the most enlightening analysis to date of the Alaska LNG Project perspectives of Governor Sean Parnell and his challenger, Valdez lawyer Bill Walker (NGP Photo). -dh
Calgary Herald by James Wood. Alberta’s new point man in Washington believes the tide is turning in favour of the Keystone XL pipeline and he plans to be direct — but polite — in pushing the stalled project.
Rob Merrifield, named this week by Premier Jim Prentice (NGP Photo) to serve as the province’s representative to the United States, said in an interview that upcoming mid-term Congressional elections could be “pivotal” for the proposed $5.4-billion TransCanada Pipelines’ project aimed at connecting Alberta’s oilsands to the U.S. Gulf Coast.
President Barack Obama has delayed making a decision on the pipeline but Merrifield said Thursday the Senate is only three votes short on a vote on Keystone.
CBC. Barack Obama's Energy Secretary, Ernest Moniz, was in Ottawa for talks Thursday and signed a memorandum of understanding with Natural Resources Minister Greg Rickford on 11 areas of bilateral energy co-operation.
At a joint news conference, both were asked whether Ukraine could soon import oil and gas from North America to help reduce its dependence on Russian energy.
"We're taking steps to diversify our markets," Rickford said, reiterating the Harper government's strategy of trying to find new export opportunities in response to a declining demand in the U.S. for Canadian oil as it builds its own indigenous supplies.
"We're looking for our rightful place in a fair global pricing of oil," Rickford said. "I think that's obvious and plain and clear."
When Moniz was asked whether his department had been asked to examine the viability of oil exports from Texas to Europe, all he would say is that "we provide technical assistance when we can to our administration colleagues."
In the short term, the U.S. does not have a surplus of domestic oil available to export to Ukraine. But, he hinted, that could change.
Alaska Governor Sean Parnell (NGP Photo) reacts to FERC progress toward Alaska LNG export project and TODAY'S Japan-Alaska Memorandum of Cooperation (i.e. two-year, renewable, non-binding understanding between governments ... Read full statement, with link to actual Memorandum).
|Business News Network. Are Canadian LNG Export Projects Facing An Uphill Battle With Competition?|
(Reuters) - Japan's trade ministry and Alaska's Department of Natural Resources on Monday signed a memorandum of understanding to help Japan procure low-cost and stable supplies of liquefied natural gas(LNG), a government official said. (Other links: Platts, O&G Journal, US Energy Information Administration)
As Energy East application nears, communities weigh risks, benefits of pipeline
CALGARY - For the mayor of North Bay, Ont., it's all about protecting the city's ... Roughly two thirds of it would make use of underused natural gas pipe ...
NIKKEI JAPAN REVIEW -- Japan's Ministry of Economy, Trade and Industry will assist domestic businesses in importing natural gas produced in Alaska, hoping to secure a relatively low-priced fuel from a region not susceptible to geopolitical risks.
Global energy producers, including Exxon Mobil and BP, are pursuing a natural gas project in northern Alaska, with a goal of starting production in 2023-24.
The ministry will sign a memorandum of understanding with Alaska's energy authority on Monday to ensure Japanese electricity and gas utilities can obtain favorable terms, including prices and reselling rules, in importing output from the project.
TODAY'S NEWS LINKS FROM: Office of the Alaska Gas Pipeline Federal Inspector.
Governor Welcomes More Progress on Alaska LNG Project
September 8, 2014, Juneau, Alaska – Governor Sean Parnell today welcomed news that the Alaska LNG Project reached another milestone with its formal request to the Federal Energy Regulatory Commission (FERC) to begin the pre-file process for the natural gas project. In doing so, the project triggers FERC’s National Environmental Policy Act permitting process.
Governor Parnell also announced today the State of Alaska and Japan’s Ministry of Economy, Trade and Industry (METI) signed a Memorandum of Cooperation (Link Here) regarding the Alaska LNG Project and other natural resource development opportunities in Alaska.
“This agreement is yet another key milestone in the State’s rapid advancement of the commercialization of our world-class North Slope natural gas resources – to Alaskans first and then to markets beyond,” said Governor Parnell, noting that Japan is the world’s largest importer of LNG.
Natural Resources Commissioner Joe Balash and METI Agency for Natural Resources and Energy Commissioner Takayuki Ueda signed the agreement on Sept. 8 in Tokyo.
“It is an extremely positive development that the government agency that sets Japan’s energy policy and works closely with Japan’s utility market has taken a strong interest in the Alaska LNG Project and the State’s overall natural resources portfolio,” Balash said.
The Alaska LNG Project is a consortium of the three major North Slope producers, pipeline builder TransCanada Corp., and the State of Alaska.
The project formally entered the Pre-Front End Engineering and Design (Pre-FEED) stage in July, during which the Alaska LNG Project is spending hundreds of millions of dollars on design and engineering and creating hundreds of jobs. Also during this stage, the producers and the State are beginning to engage the LNG sales market. In August Energy Secretary Ernest Moniz exempted the project from a rule that has slowed the approvals for Lower 48 LNG export projects.
The memorandum with METI is part of the State’s ongoing efforts to engage the LNG markets in Asia, and it builds upon an existing agreement the State signed with the Japan Bank for International Cooperation (JBIC) in January. JBIC is a public financial institution that plays a critical role in financing and securing Japan’s LNG imports.
ADN Op-Ed by Nils Andeassen. America’s increasing attention on the Arctic is timely and well-deserved but it’s important to recognize that there have been many individuals and organizations whose focus on the Arctic over the years we are now building on.
Office of the Alaska Gas Pipeline Federal Coordinator, by Bill White.
CBC by Sophia Harris. America and Canada are friends. That’s the main message Americans got from phase one of the federal government's multimillion-dollar advertising campaign to promote Canadian oil in Washington and drum up support for the Keystone XL pipeline.
That’s no surprise to some Washington-based Canada-U.S. relations experts who say the first leg of the campaign was too polite and, (more....)
Construction of the multibillion-dollar Alaska LNG project would tap a bounty of public resources – crossing rivers, disturbing soils and vegetation at least temporarily, creating emissions that would alter air quality, encountering threatened and endangered species.
The project’s sponsors cannot use the public’s water, land and other resources without permission, and a public process finding that such uses would be acceptable, findings that likely would come with strings attached.
The sponsors know the task ahead and have been gathering the environmental data regulators would want to see. We provide a brief guide to the federal agencies handling the major authorizations Alaska LNG would need.
Commentary on, "A Brave New World of LNG Export Competition", by Dave Harbour
Our friend, James Halloran (below, right) advises his newsletter recipients this morning that LNG Project competition is intense. This is why Alaska cannot take its resources for granted--cannot just assume that they will be both marketable and marketed. And, we can help! In a Brave New World of LNG export competition, Alaska's government and people need to work with and support reasonable natural resource development in the State. Alaska's Constitution (Para. 2) demands it. The Alaska Statehood Act depended upon it. And, the future of Alaska and her coming generations absolutely require an economy sustained by reasonable resource development. We don't know if the Alaska LNG Project will ultimately be both marketable and marketed. We do know that its sponsors will need exceptional support of Alaska's citizens to overcome the awesome forces of competition, augmented by Alaska North Slope Gas natural marketing obstacles: remoteness, climate expenses, labor expenses and logistics expenses. We also conclude that our Canadian friends face some of the same, man-made competitive obstacles and natural resource advantages.
Commentary by Energy Consultant, James Halloran.
There are over two dozen proposed LNG export projects in the US that, if all enacted, would involve shipping 38 Bcf of gas per day (over 50% of current domestic production).
Obviously, the actual number will be much smaller than that. The best guess (and it is no more than that) is that US LNG export capacity may reach about 8-10 Bcf/day.
About 2-4 Bcf will represent “swing capacity” for such majors as Exxon, arbitraging between the Atlantic and Pacific basins (and not operating full-time).
The total capacity ultimately built may actually go higher, but at that point some of it will be excess supply.
But the US situation can hardly be looked at in a vacuum. There are a number of major inputs to the LNG supply/demand equation. One of the biggest involves efforts by British Columbia to develop a number of LNG export terminals. The note below describes the critical issues that are headwinds to that effort. We will not repeat what is accented below. But the bottom line is that, while Canada’s only real advantage over the US at this point is closer proximity to the Asian market, with several disadvantages, this does not mean that Canada will cede the market to the US. The BC projects are highly likely to lead to overbuilding in the North American LNG export business.
This is especially likely, given BC’s dream of tax revenue riches from these projects. Rational behavior rarely accompanies government greed. The Canadian natural gas that will supply the BC projects will not come from fields that would go anywhere else, but this only accents the likelihood of competition for the Asian markets that will hold LNG prices down.
(Note: Should Halloran later add into this mix the prospect of an Alaska LNG project, competition becomes even more intense.
Tax greedy Provinces like British Columbia and States like Alaska will have to restrain the temptation to tax their golden eggs out of existence; if not, less greedy, more reasonable, producing area governments will create new nests of golden eggs at the expense of Canada and Alaska. -dh)
On his Face Book Page, Governor Sean Parnell (NGP Photo) writes: Progress on the natural gas pipeline for Alaskans: #Alaska’s LNG Project secured more than 120 acres of land near Nikiski and has nearly 100 more acres under contract. This bodes well for a liquefied natural gas plant, which would be the largest integrated LNG project ever constructed . Some good reporting here: http://goo.gl/KOIU5J
Bloomberg News by Rebecca Penty and Divya Balji. The race to build natural gas export terminals on Canada’s Pacific Coast is inspiring another competition as producers including Painted Pony Petroleum Ltd. (PPY) position themselves as potential takeover targets.
Developers of the gas-rich Montney shale that straddles Alberta and British Columbia are among the best-performing Canadian energy stocks this year, including Painted Pony, Crew Energy Inc. (CR) and Birchcliff Energy Ltd. (BIR) Regulators estimate the Montney, the supply source closest to the sites of proposed LNG terminals, contains 145 years worth of Canadian gas consumption.
As oil majors from BG Group Plc to Royal Dutch Shell (More here....)
TODAY'S ENERGY IN DEPTH ENERGY LINKS BELOW:
As oil boom continues, there's no end in sight for job growth. Dallas Morning News. “We have a lot of production increasing in the shale areas of Texas and North Dakota. And we’re seeing an upswing in the number of rigs in the gulf,” said Paul Caplan, president of Rigzone, which runs an online job board for the industry. “The competition for people is getting tough.”
Bottleneck keeps Permian oil price far below benchmark. Houston Chronicle. Five years into an oil production revival in the Permian Basin, producers tapping the West Texas formation are selling their oil for $21 below the benchmark U.S. price because it's difficult to get thecrude to market. NOTE: Bloomberg also reports.
New Book Documents Hydraulic Fracturing's Promise for America. Heartland Institute (Blog). The new book Groundswell is a highly recommended read. It is more an economics and politics book than a science treatise, and there are plenty of issues in fracking economics and politics to discuss. In an easy conversational writing style, Ezra Levant powerfully debunks a litany of myths regularly asserted by anti-fracking activists.
BP Hires Chief to Run its U.S. 'Lower 48' Onshore Business. Wall Street Journal. Mr. Lawler, most recently an executive vice president and chief operating officer of Sandridge, will take over a new business with "separate governance, processes and systems" from the rest of BP, the company said in a statement. He will report to BP's exploration-and-production chief, Lamar McKay. BP said in March that it would put its lower-48 onshore assets into a new business in an effort to become nimbler and "compete more effectively with the independents," BP CEO Bob Dudley told an investor meeting at the time.
Energy fight advances in North Carolina. Washington Post. North Carolina is down to the final weeks of a hydraulic fracturing battle that has consumed the state government for nearly two years. The state’s Mining and Energy Commission will kick off public hearings this week on the controversial drilling practice, which Gov. Pat McCrory (R) legalized in June. (Click Below For More International and Stateside News....)