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Could The Tide Be Turning Against North American Natural Gas?
Submitted by Dave Forest via OilPrice.com,
A lot of hope has been pinned on liquefied natural gas (LNG) exports as an outlet for surging North American gas supply.
But a couple of events the past week show that getting LNG exports off the ground may be more difficult than most observers have predicted.
The biggest potential setback came in western Canada, where it appears that the newly-elected Canadian federal government is making a move to limit offshore shipments of petroleum.
Local press reported that new Prime Minister Justin Trudeau has directed the country's Transport Ministry to impose a ban on crude oil tankers for the northern coast of British Columbia. With the directive now expected to be formalized with other government departments including fisheries, natural resources and environment.
That's a tough development for oil export projects like the planned Northern Gateway pipeline which was supposed to carry heavy oil to the British Columbia coast for export -- but now appears likely to fall by the wayside.
The anti-tanker directive also calls into question planned LNG developments on Canada's west coast.
A number of plans are on the books for LNG export terminals here, from firms like Shell and Petronas. But the ban on oil tankers raises the issue of whether LNG vessels might also come under scrutiny -- and potential restrictions -- from the government.
At the same time, another government has also rejected coastal LNG -- on the other side of the continent, in the state of New York.
New York's governor Andrew Cuomo said last Thursday that his government is rejecting a proposed LNG terminal off the coast of Long Island with the state saying that security risks and possible damage to fisheries and offshore wind developments make the project unacceptable.
The New York facility was supposed to be an LNG import terminal -- aimed at increasing gas supply into the local market, which still suffers periodic shortages. But the rejection of the facility could have knock-on impacts for both LNG import and export developments elsewhere on the east coast.
All of which suggests that sentiment (as well as economics) may be turning against North American LNG; an important factor to consider as we assess the future for natural gas prices in this key market.
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Well it is certainly cheap compared to a year ago or even 5 years ago and more Ng being used for electrical generation vs coal.
http://hedgeaccordingly.com/2015/06/new-york-energy-week-panelists-stres...
5 years the price will be much higher as the US burns its supply quickly.
Trudeau's an ideological earnest former school teacher from Quebec, aka an idiot. He is a no job having environentalist in the worst sense of the word. A little ivory tower, entitled scion of the Trudeau brand. At university in socialist Montreal at McGill, urbanite Justin liked to sport leather jackets and cowboy boots. He campaigned on deficiet spending and doesn't give a shit about job creation. He's a smile and wave motherfucker
It's funny that people are concerned about finding an outlet for surging North American gas supply. CNG is going to the vehicle for lifting the USA and Canada out of the current economic depression we are in. Consider this:
We are still beholden to the House of Saud for much of our transportation fuels. The incoming president could put the nation back to work with a five to seven year plan to convert the country from gasoline and deisel to CNG. Simply put:
1.) you would need to develop a nationwide system of pipes that traveled along interstate highways to serve fueling stations.(pipeline jobs)
2.) you would have to build cascade plants, (fueling stations). (station building jobs.)
3.) You would have to have a coversion program for existing vehicles. (conversion kit manufacturing jobs, mechanic installer jobs, installation inspection jobs).
4.) Home fueling appliance stations, (in your garage). (appliance manufacturing jobs, sheetmetal jobs, machining jobs, appliance installation jobs, (plumbers & inspectors).
5.) Home appliance compressor head rebuild industry, (current technology says that heads on CNG compressors have to be rebuilt every 4000 hours). Service of appliance industry. (jobs, jobs, jobs!
6.) CNG Steel tank manufacturing. (JOBS!!!! in steel, mining, smelting, refining, machining, etc.
7.) Vocational schools to train the army of workers this is going to require. (More jobs!)
8.) Rebuilding the North American steel industry. (even more jobs.)
I'm sure there are more, but you get the picture. This creates i) energy independence ii) manufacturing might IF... you pass a law that says due to national interests all of these devices, equipment and material MUST be made in either Canada or the USA. Period.
Also, build the fucking wall and deport those here illegally. If we end up needing more labor, we can set up a guest worker program with real controls.
America became great due to its manufacturing might. The ONLY way to get it back is to become the colossus of industry it once was.
You are making this sound much more difficult than it actually is.
It is ridiculously easy and cheap to convert gasoline engines into dual-fuel CNG/gasoline hybrids. You lose some horsepower, and the CNG tanks take up cargo space, but those are the only drawbacks. Regarding your "vocational schools to train an army of workers" requirement? Hardly necessary. Any decent auto mechanic can do this with virtually no training whatsoever.
Build pipelines? um, guess what...there is already a huge network of natural gas pipelines already in place.
Have you ever been to Italy? Many gas stations--and virtually all of them on the highways-- have CNG pumps. Lots of people use them.
Agreed with most of what you said Buckaroo, but yes, there is some training that will have to happen to make the change. Yes, Europe is with it, but we here are not. Try to drive a CNG vehicle across country without a lot of planning. Actually, not "just any auto mechanic can make the conversions. We're talking 3600 PSI. Get that wrong, and it's "big boom" time. That said, CNG is tons safer than gasoline. The problem with supply , (fast fill cascades), is that the pipelines DO NOT run near interstates.
The boys at Dollar, Inc do not want Americans to prosper or do well. They want them beat down and broke.
I'm going to take a wild guess here and say that LNG is likely not economical at current oil prices.
Heating oil is cheaper this year than firewood (on a BTU basis) in a lot of places. Propane delivery is still a ripoff due to tiered pricing schemes.
FUNDAMENTAL TRANSFORMATION
CHANGE YOU BETTER BELIEVE IN
Brought to you by the most successful double agent of all time.
Young News Anchor message to Obama goes viral - Final Thoughts from Tomi Lahren
https://www.youtube.com/watch?v=ABrauM7yvco
Now we know Bush did need more power. A double agent slipped though...
Yeah nice bit of same ol same ol MIC/ZIOBANK propaganda speak from a pretty face Macholatte, to bad she failed to ask the rather logical now.. "what the fuck is America doing out there thousands of miles from home anyway? what benefit is it to the people of America ? have n,t we been showing them our bombs , drones, depleted uranium, bullets and guts for what at least 15 years and nothing good has come from it ? and why oh why are we still Israels BITCH ?........... anyone ?..........anyone ?.......pretty please ?.........crickets.......
Where is this LNG being shipped? Japan?
No way North American LNG competes economically on the Eurasian land mass.
This is just an excuse to raise prices in North America.
Energy independence? It's a crock, just like Peak Oil and Global Warming. Brought to you by the same assholes.
cancel Keystone, block fracking, ban crude exports, LNG? who needs it?
Let's see what else we can do to kill the economy and shoot ourselves in the head
One more round of QE ought to do it.
The envirofreaks would have us all shitting the residual of our fruit and nut meals into an organically prepared hole in the woods, followed by a careful wipe with biodegradeable leaves.
This is how fucking nutty the envirofreaks are:
http://www.techinsider.io/europes-renewable-energy-wood-heating-atmosphe...
Un fucking believable!
Yeah, I am curious, and there is no explanation, why is Canada restricting this kind of trade ? Who benefits ?
Good news for the Port of New Orleans
Good News? what if one of those tankers sitting in a port comes in contact with ISIS and a lighter?
Can't happen.
Obama said ISIS was contained.
OK, maybe not ISIS but at least their lighters.
Obama wouldn't lie to us.
Anyway, Islam is a religion of peace and all the muslims just want to stoop down sniff ass and kiss dirt all day.
They don't have time to plot terrist attacks since they're way too busy washing their feet and hands after using them to wipe their asses without using toilet paper.
ISIS has never met the Longshoremen/Mafia. Liable to be a major can of whoop-ass opened up.
It would take a lot more than a lighter. Aparently you don't understand the mechanics of a BLEVE.
"The New York facility was supposed to be an LNG import terminal -- aimed at increasing gas supply into the local market, which still suffers periodic shortages."
Brilliant. We have some of the cheapest energy on earth (gas & liquids from Marcellus/Utica), sitting within 500 miles of a market (NE U.S.) where we periodically see consumers paying some of the highest prices on earth for energy. FUBAR.
Fuck those New Dork shit holes.
The LNG for New York was to be used as supply for peak demand periods. It would be US sourced LNG shipped up to NYC and stored. Let those a-holes keep warm in the tunnels with the rats.
Good news for the Port of New Orleans
Cuomo=Libtard. It's in the dictionary.
I can't wait to find out what Canada is going to do to replace lost tax revenue, especially now that things are getting wobbly.......
Doubling down on their housing bubble oughta do it.
Import hundreds of thousands of war refugees and then steal the refugee resettlement money.
the state saying that security risks and possible damage to fisheries and offshore wind developments make the project unacceptable.
Yea sure thats it. wouldnt want any windmill competition. Its way cleaner than lng, sure that makes sense
The way it's going regarding costs, technical issues, regulations and environment, lawsuits, unhappy property owners over proposed pipelines, and Warren Buffett's crashing trains, I think we'll all be looking at just heavy coats and insulated pants in a couple of years as our primary heat source. Really, the BS just never ends.
All those LNG projects we spent years quoting are all kaput!
Net energy is a bitch, also the complexity of instalation adds to capex.
Europe can afford to buy more coal but for Carbon tax
Those London boys need ehhh...everything you have got.
Europe is now a hybrid theme park / slum
Has your gas bill for home heating ever gone down. My bill was lower in 2009 when NG was $13. Today, it is $2 and my bill has never been lower.
Of course not, they just find exotic new ways to pad the bill.
The folks down here in Florida using Duke Energy are paying for a nuclear plant that is never going to get built.
Thanks Florida Public Service Commission!
Bit of a false premise in the article. Trudeau is anti-Alberta, hence the ban on the CRUDE oil tankers. He's looking to kill the oil sands, and this is part of that strategy.
He is, however, very much pro-BC, and natural gas drilling in northern BC is not something he will hinder. Restricting LNG transport on the west coast of Canada is nowhere on the horizon from the Trudeau government.
The bigger threat to LNG in Canada is the fact that its pricing is calculated using the current market price of crude...and with it in the tank, LNG is a lot less economical. Moreso in Canada where it is virtually impossible for governments (at any level) to work with industry and build proper infrastructure (pipelines, etc). Add in the fact that we cower to the Indians and their land claims at every turn, and you have a much more reasonable recipe of why LNG will fail in Canada.
Lay off on the "Indians". They have suffered enough from the invading hoards. Honor the treaties.
They better do something the PVF industry is dying.
Corn Ethanol Boom went Bust!
Waste Water Treatment Plant Boom went Bust!
Oil/Gas Boom went Bust
LNG Boom went Bust!
Gas Turbine Boom is going Bust soon!
up until the mid 90s coal was offloaded on Cork docks and distributed by the local coal merchant, the majority of the stuff was burned w
ithin a couple of miles from the port.
Very little complexity involved, direct burn seems inefficient but is not, no transformation lossesinvolved.
Check out Ft alphaville absurd piece about the growth of diffuse renewables
Uk efforts in this area is a complex sham
.
Renewables "growth" is in the context of declining overall production.
The UK can disguise this entropy by going on extended holidays and turning Drax into a wood pellet plant.
Portuguese use of combustibles in the electricity sector has increased by a massive 40% plus (Jan - Aug) and Spain by 25%...
UK consumption has subsequently decreased by nearly 20%
It's only when you look at Iberian tourist figures this year ( massive growth of British holiday makers) that these figures make sense.
European jet Kerosene consumption also up 65 kbd this year.....it's a simple fuetransfer.
r.
lol racism. They'll sell oil to the US, but not to those damn slant eyes!
I'm calling it right now. Oil will flow to the US then be shipped to China.
what a bunch of bullshit. liquified lng is too expensive period. it ISN"T competitive with pipeline compressed gas.
that is why our major petroleum companies are 'investing' into war in syria. the profits will be had by building those pipelines , servicing them, and collecting royalties off the gulfistan investment entities.
lng terminals will not be built for the same reason keystone won't be built, it's not profiteable at these prices. environementalsists and others have NOTHING to do with the fact that petroleum companies don't see enough profit to bribe governors like quomo and the new canadian pm to the tune of hundreds of millions in swiss bank accounts.
if prices were higher these power players would be singing another tune entirely....
Unless the world's economy goes belly up for an extended period of time and rebounds very slowly oil prices and gas prices will go up. Throw in some heavy population culling and your guess is as good as mine.
Prices are on an inflation adjusted basis not far from some of the lowest prices in the last 50 years.
I remember when prices spiked from $ .35 a gallon for regular gas to $ .55 in a year only to steadily rise to over $ 1.20 in 5(?) years. Now it is back to $1.99 a gallon.
Pipe delivery is less expensive if the pipe is overland for reasonable distance and can get built. The New Yankers have not approved the pipes to supply the city and any RoW acquisition is going to be very expensive. Putting a LNG source for pea demand coverage was a good idea. They will have brownouts without more supplies.
You must realize the euro boys do not want to see a reduction of energy consumption.
The most simple method to reduce energy consumption in Ireland is to not tax a pint of beer (1 Euro 25 Cent)
If a pub is full with 50 bachelors then that means 49 houses do not require gas heating, do not require lighting...
Only one television Required (away in the back Somewhere)
As energy minister of Ireland I would decrease gas consumption by 2 thirds while simultaneously increasing the happiness index to unheard of heights.
However the guys selling this stuff will not allow this to happen
My definition of Austerity will stand the test of time.
Austerity is the rationing required to sustain the consumer war economy.....period.
Back when America was promising the Europeans that we would cover the loss of Russian gas with our LNG, one of the LNG big shots said 'No one takes this seriously'. Apparently shipping pressurized gas, a long way on ships is unlikely to be enough to keep a couple of big countries going.
I'm suprised to see that this issue is still even being discussed. I suppose if selling LNG is your bag (baby) you'll keep talking about it even after it is an obvious failure.
Imagine Germany shuuting down because a boatload of LNG got sunk. If I was Germany I'd be nicer to the Ruskies.
Nonsense analogy.
It is about the same as suggesting that Germany would shut down if a train loaded with coal derailed.
LNG is being delivered to Europe now.
So, how about cheaper prices for LNG for consumers in the US instead of pushing to increase exports to maximize the LNG producer's bottom line? Its not like its a discretionary item in people's budgets...
Where is that market of LNG "consumers in the US?"
It does not exist.
What planet do you live on? Looks like part of our production is currently being met with imports from Canada. Again, why do we need to develop an export market if we have a strong domestic market that currently is not meeting our needs?:
"Natural gas consumption in the United States is expected to increase slightly from about 24.3 trillion cubic feet (Tcf) in 2011 to 26.6 Tcf by 2035. Currently, most of the demand for natural gas in the United States is met with domestic production and imports via pipeline from Canada."
http://energy.gov/fe/science-innovation/oil-gas/liquefied-natural-gas
Northern Gateway and Keystone are irrelevant. The oil from Alberta will be shipped east. The Energy East pipeline already exists in about 80% of the length so it'll just get piped to Halifax and shipped to India for refining.
http://tarsandssolutions.org/campaigns/energy-east
That is if/when oil goes back up to $65 a barrel. Until then the tar sands are only breaking even or slight profit due to Canada devaluing its dollar 25% so far.
Exactly. Same thing here, we put something like 12,000 miles of pipeline in the US since about 2010 alone. We are still laying pipe like an SOB as we speak. Keystone was a distractionary issue and it worked like a charm.
"We froze some folks"