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LNG exports: A release valve for U.S natural gas
Reuters via The Globe and Mail ^ | Apr. 19, 2012 | Kevin Allison AND Christopher Swann

Posted on 04/23/2012 12:52:08 AM PDT by neverdem

It may be the beginning of the end of ultra-cheap U.S. natural gas NG-FT. Less than a week after prices dipped below a decade low of $2 (U.S.) per million British thermal units, American authorities approved the nation’s first big gas export plant in half a century on Monday. Assuming Cheniere Energy LNG-A can secure financing, its liquefied natural gas terminal will provide struggling producers a way out of the gloomy domestic market. That may eventually force U.S. consumers and chemical producers to pay more. But it should also create a more stable market.

Global energy markets have been screaming for America’s natural gas bounty. The rise of fracking has caused prices stateside to plunge to about a fifth the level in Europe and about an eighth the Asian price.

At full capacity, Cheniere’s Sabine Pass plant will produce just over two billion cubic feet of liquefied natural gas per day, equal to about 3 per cent of daily U.S. gas production. And where Cheniere has gone, others will follow. Sabine Pass and other projects currently up for approval could eventually export up to 12 billion cubic feet of gas per day, according to estimates from energy consultancy IHS Cera, or the same as Russia’s daily sales to Europe.

It’s unlikely that all the planned export capacity will get built. Political opposition or lower global gas prices may rein in the ambitions of exporters eventually. And first production from Sabine Pass isn’t expected before 2015.

But eventually, U.S. and global prices should start to converge, taking the pressure off American drillers. Many have already idled rigs or are diverting more resources to recovering dearer crude. Without an export pressure valve, that would have been a recipe for future underinvestment, supply shortages and volatile prices.

The long-run effect of higher prices...

(Excerpt) Read more at theglobeandmail.com ...


TOPICS: Business/Economy; Culture/Society; Front Page News; Politics/Elections
KEYWORDS: energy; lng; naturalgas; naturalgasexports

1 posted on 04/23/2012 12:52:11 AM PDT by neverdem
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To: neverdem
"LNG exports: A release valve for U.S natural gas"

The Obammunist is denying permits to build LNG ports.

yitbos

2 posted on 04/23/2012 1:05:38 AM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: Smokin' Joe

It’s my understanding that natural gas storage capability is limited, and that you can’t liquify it it for nothing. Still, it’s at least a twofer. It’s good for jobs, especially when the recoverable crude is limited, and the current accounts deficit, what used to be called our negative balance of trade. This energy sold overseas helps when uou have a fiat currency.


3 posted on 04/23/2012 1:09:21 AM PDT by neverdem (Xin loi minh oi)
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To: bruinbirdman
The Obammunist is denying permits to build LNG ports.

"American authorities approved the nation’s first big gas export plant in half a century on Monday."

Have they been dragging their feet? I wouldn't be surprised. Which ones have they denied?

4 posted on 04/23/2012 1:16:43 AM PDT by neverdem (Xin loi minh oi)
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To: neverdem
Global energy markets have been screaming for America’s natural gas bounty. The rise of fracking has caused prices stateside to plunge to about a fifth the level in Europe and about an eighth the Asian price.
This is obviously unstable; the substitution cost of natural gas is obviously far more than the current price, and uses for natural gas will proliferate. LNG export is one such use, perhaps the largest - but it’s hard to see how anyone can sell coal when natural gas is cheaper. It should take over all stationary fuel applications such as electric power generation and furnaces; it has already been a boon to steelmakers.

If you can make money shipping LNG abroad, it should be economical to power ships traveling to/from America with American LNG. It’s possible to fuel diesel engines with a lean mixture of natural gas, and that should make it practical to run diesel locomotives and long-haul trucks and busses on LNG. Short haul trucks and busses could use CNG economically. There is a crying need for infrastructure for getting NG to all of those markets in order to ameliorate our need to import petroleum from overseas; it would even be worth a small premium to the country to obtain the independence that would avail us.

And Obama does not desire that.
I would recognize, however, the downside possibilities of terrorism against LNG facilities. It might be all too possible to "blow them up real good."

5 posted on 04/23/2012 1:49:29 AM PDT by conservatism_IS_compassion (The idea around which “liberalism" coheres is that NOTHING actually matters except PR.)
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To: conservatism_IS_compassion

If, and I say IF, the expanded uses for NG are allowed to bevelop (with all the infrastructure needed for its use as both a power generation fuel and motor transport) then the possibility exists that we may yet come out of this long depression we face. But now, the failing obama regime has to get into place its various schemes to assure an artificial scarcity, and thus, continue to choke productivity in this country (though it won’t be choked elsewhere).

First, is to find a conclusive reason to deny the further exploitation of the technique of fracking. Like, it might cause earthquakes. Or the gas escapes upward into the water table and natural aquifers. Or the gas escapes to the surface and causes flame-offs and/or unexpected explosions in diverse locations. Never mind that these are events of extremely low probability, all they need do is use scare tactics. And lots and lots of very bad science.

Next, is to slap a completely inordinate tax on the transportation and consumption of natural gas, or to make the permits for the construction of infrastructure so complicated and expensive only a few will attempt to get the work done. And those few will, of course, be large contributors to the corrupt politicians who would try to regulate the use of natural gas down to a bare minimum.


6 posted on 04/23/2012 3:16:13 AM PDT by alloysteel (It is hard to get a man to understand, when his pay depends upon his not understanding something.)
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To: bruinbirdman

The port in question was built to receive LNG, they are changing it to send LNG.

This situation is similar to the early days of Texas oil when a bbl of oil sold for 10 cents because they had no place to put.


7 posted on 04/23/2012 3:24:46 AM PDT by Recon Dad (Gas & Petroleum Junkie)
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To: neverdem
I sure hope Consumers Energy here in Michigan, buys as many futures as it can at $2.00.... It was amazing just how high my gas bills were this winter, even with th low prices. Of course, they had probably hedged at the $6.00 level... Figures!

Mike

8 posted on 04/23/2012 3:53:10 AM PDT by MichaelP (The ultimate result of shielding men from the effects of folly is to fill the world with fools ~HS)
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To: neverdem

Needs to be forwarded to those who maintain we can’t drill our way out of energy problems (might want to start at 1600 Pennsylvania Avenue).


9 posted on 04/23/2012 3:54:13 AM PDT by Stosh
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To: bruinbirdman
Less than a week after prices dipped below a decade low of $2 (U.S.) per million British thermal units.

When 0bama said he wanted "$8 gas" did he also mutter $8 Natural Gas along with gasoline?

Rest assured with flexibility he will work to get Natural Gas up to that price as well.

10 posted on 04/23/2012 4:02:53 AM PDT by TYVets (Pure-Gas.org ..... ethanol free gasoline by state and city)
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To: neverdem

If there is good cheap natural gas around, why am I paying 200.00 a month to heat my 2000 sq ft house?


11 posted on 04/23/2012 5:42:29 AM PDT by netmilsmom (I am Breitbart)
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To: alloysteel
The biggest difference between Natural Gas and other fuels is the dependence on Natural Gas as a heating fuel in regions of the nation where heat in winter is a matter of life or death--regions which commonly vote Republican.

I can see the current crop of politicians in DC doing all they can to harm the folks who dare to vote against them, and the industry as well.

So far, they have had only one avenue of attack they can use, that of flared gas emissions. All others have failed or been exposed as fraud.

Even Pavillion, WY, with a population of roughly 150 people had bad water well before the first well was drilled, and the two gas stations in town shut down over issues with underground tanks. The water near surface there is far more in danger of surface contamination than contamination from a frac.

12 posted on 04/23/2012 5:48:55 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: neverdem; bruinbirdman
It has more to do with financing than permitting.

Cheniere got their approval just a couple weeks after they got the majority of their financing in place. They still need additional financing which they said they would have in place by the end of this month.

Next in line is Freeport's offload terminal and there are numerous other companies at various stages of development including one on the east coast to export Marcellus NG. Just last week it was announced that a terminal would be built in the Pacific NW to export Canadian NG.

13 posted on 04/23/2012 5:52:00 AM PDT by Ben Ficklin
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To: neverdem
Why not export? So long as we keep drilling, too, domestic prices should stabilize and we'd decrease our trade deficit as well.

The key factor is that these facillities and the waters in the immediate vicinity will have to be better guarded than the average nuclear power plant. They'd be a likely terrorist target.

However, actual loading could conceiveably be done offshore at a terminal supplied by pipeline from the mainland to lessen risk for coastal populations (and increase the difficulty of terrorist attack).

14 posted on 04/23/2012 6:08:09 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: thackney; SAJ; saganite

A ping for your thoughts...


15 posted on 04/23/2012 6:09:37 AM PDT by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing)
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To: Recon Dad
The port in question was built to receive LNG, they are changing it to send LNG.

There is another... Dominion Energy's Cove Point LNG facility that has received DoE approval to export gas. This one is close to the Marcellus gas fields in Pennsylvania.

16 posted on 04/23/2012 6:41:20 AM PDT by Ditto (Nov 2, 2010 -- Partial cleaning accomplished. More trash to remove in 2012)
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To: Smokin' Joe

It looks like the NG market is maturing and energy companies should certainly be allowed to sell their product as they see fit.

Fracking itself is another issue. I’m not sure the technology will survive the politicians ministrations. I saw a study last week tying small earthquakes to fracking. If they can’t prove fracking pollutes well water they move on to the next issue until they find one that resonates.


17 posted on 04/23/2012 6:50:46 AM PDT by saganite (What happens to taglines? Is there a termination date?)
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To: Smokin' Joe

By allowing export we will hold a more stable price which will keep more natural gas drilling.

More jobs and we will continue to see more demand growth in the us.

But it won’t come fast enough for this early fall. As out storage maxs out prior to the heat demand season, the piece is really going to drop unless something else changes.


18 posted on 04/23/2012 7:04:19 AM PDT by thackney (life is fragile, handle with prayer)
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To: neverdem

This is really a shame because we haven’t been able to integrate conversion to NG fast enough into the vehicle fleet and power generation and industrial uses.

By the time we get there it may not be cost effective anymore. Thanks to the green idiots in the White House wasting time on renewable boondoggles, we will have exported our energy security once again.


19 posted on 04/23/2012 7:28:40 AM PDT by headstamp 2 (Liberalism: Carrying adolescent values and behavior into adult life.)
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To: neverdem

*


20 posted on 04/23/2012 9:57:27 AM PDT by PMAS (ABO 2012)
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To: wardaddy; Joe Brower; Cannoneer No. 4; Criminal Number 18F; Dan from Michigan; Eaker; Jeff Head; ...
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21 posted on 04/23/2012 11:47:33 AM PDT by neverdem (Xin loi minh oi)
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To: netmilsmom
"why am I paying 200.00 a month to heat my 2000 sq ft house?"

Look at the bill. I have a gas water heater and clothes dryer = $6 of a $24 bill. Everything else is service and tax charges.

yitbos

22 posted on 04/23/2012 2:00:36 PM PDT by bruinbirdman ("Those who control language control minds." -- Ayn Rand)
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To: bruinbirdman

Never thought of that. Thanks!


23 posted on 04/23/2012 2:03:43 PM PDT by netmilsmom (I am Breitbart)
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To: neverdem
The longterm 'problem' is the development of a global glut which promises to last for decades. The US boom, echoed around the world, is remaking the face of the energy industry. The stupid green fiascoes will be rusting relics of the past in five years or so.
24 posted on 04/23/2012 5:45:16 PM PDT by hinckley buzzard
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