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Exxon, Qatar Petroleum Get OK to Export U.S. Fracked Gas Amidst Tangled Ties to Russia, ISIS

Exxon, Qatar Petroleum Get OK to Export U.S. Fracked Gas Amidst Tangled Ties to Russia, ISIS thumbnail

Just days before Christmas, the U.S. Federal Energy Regulatory Commission (FERC) gave ExxonMobil a gift: a permit to export natural gas from its Golden Pass LNG (liquefied natural gas) facility located in Sabine Pass, Texas.

Dubbed Golden Pass Products, the expansion of this LNG facility to export gas is a joint venture between Exxon (30 percent stake) and Qatar Petroleum (70 percent stake), the state-owned oil company. Golden Pass LNG is now the fourth LNG export facility, and third situated along the Gulf of Mexico, approved under the Obama administration.

This facility will continue to open up the global market to U.S. natural gas obtained via hydraulic fracturing (“fracking”).

The permit for Golden Pass comes shortly after Exxon’s CEO, Rex Tillerson, was named Trump’s nominee for U.S. Secretary of State and will likely face a tough Senate confirmation hearing in January, mainly due to his close ties to Russia.

Golden Pass LNG ExxonImage Credit: U.S. Federal Regulatory Commission

“Catastrophic Impacts”

In handing Golden Pass the permit, FERC stated that “the environmental effects resulting from the export of LNG as a commodity, i.e. effects related to future upstream production, gas-to-coal-switching, and foreign end use of natural gas, are neither caused by the Commission’s approval of Golden Pass’s LNG export facilities, nor reasonably foreseeable consequences of the Commission’s approval of these facilities.”

But critics, such as Joe Romm of the Center for American Progress, say a U.S. LNG export boom would be a climate change catastrophe due to methane leakage and emissions. Methane is a greenhouse gas 86 times more potent than carbon dioxide during its first 20 years in the atmosphere.

“At best, investing billions in LNG infrastructure is a waste of enormous resources better utilized for deploying truly low-carbon energy,” wrote Romm in March 2014. “At worst, it helps accelerate the world past the 2°C (3.6°F) warming threshold into Terra incognita — a planet of amplifying feedbacks and multiple simultaneous catastrophic impacts.”

Russia, ISIS Connections

Originally, the push to export LNG from the U.S. centered around a bipartisan-promoted premise of weaning U.S.-allied countries off of Russian gas.

The most recent bipartisan push in 2014 consisted of the likes of U.S. Rep. John Boehner (R-OH) and U.S. Sen. John McCain (R-AZ), as well former Clinton Administration U.S. Secretary of Energy Bill Richardson, pointing to the utility of exporting U.S. LNG to weaken Russia’s influence. This ensued at the dawn of the Crimea crisis in Ukraine.

“What can the U.S. do to help alleviate Europe’s reliance on Russian natural gas?,” wrote McCain in The Wall Street Journal in July 2014. “We need to use our leverage wisely: to boost our economy at home, and to strengthen our national security by helping our allies resist Russian aggression.”

Former Boehner staffer Josh Holly works at the Podesta Group — owned by Tony Podesta, the brother of one of Democratic Party presidential candidate Hillary Clinton’s top aide, John Podesta — where Holly lobbies on behalf of Golden Pass. Randall Gerard, a former McCain staffer also employed by Podesta Group, lobbies alongside Holly.

Even before the Crimea crisis began, in December 2012, the U.S. Senate Committee on Foreign Relations published a 62 page report calling for the U.S. government to start “putting molecules where our mouth is” and use U.S. LNG exports as a cudgel against Russia to “contribute to European energy security.”

U.S. LNG report textImage Credit: U.S. Senate Committee on Foreign Relations

Oh, how quickly things change.

Two and a half years later on December 11, 2016, the state-owned Qatar Investment Authority announced a purchase of a 9.75 percent stake in Russian state-owned oil and gas giant Rosneft. Igor Sechin, former deputy prime minister under Russian President Vladimir Putin and current executive chairman of Rosneft, said in a Rosneft press release that the “privatization deal marks itself as the largest in the history of Russia.”

As reported by DeSmog and many other outlets, Exxon and Rosneft have several joint venture deals, including exploration deals in Russia’s Bazhenov Shale basin in Siberia and offshore in the Russian Arctic. It appears likely Tillerson will come under heavy questioning about those ties during his U.S. Senate confirmation hearing.

Russia’s alleged intervention in the U.S. presidential election by hacking into the email databases of the Democratic National Committee (DNC) and Podesta, are currently under review by the U.S. intelligence bureaucracy. In a recent interview with NPR, Obama said the U.S. will retaliate against Russia during his remaining weeks in office.

Beyond the close personal and financial connections to a country which many observers believe to be a geopolitical adversary, there is another key node in this tangled web: Qatar and its relationship to the Islamic State in Iraq and Syria (ISIS).

Ironically enough, that relationship recently came to light in the Podesta emails published by Wikileaks and allegedly obtained by Russian-sponsored hackers. Clinton emailed Podesta in September 2014 and cited Western intelligence agencies, stating that Qatar and Saudi Arabia are providing “clandestine financial and logistic support” to ISIS.

Newsweek also reported in November 2014 that the Qatari, Saudi Arabian, and Kuwaiti governments and business elites within those countries had given as much as $40 million to the group. Qatar denies it has ever directly funded ISIS.

Adding further complexity to the situation, Trump has said repeatedly that under his watch, his administration would “knock the hell out of ISIS.”

“You Are the Gift”

Geopolitical relationships change over time, of course, and Russia now serves as a case in point. The Trump transition team has signaled a potential U.S.-Russia reset, with friendlier relations between Washington and Moscow to follow.

Saturday Night Live even ran a recent parody segment featuring Tillerson, Trump, and Putin, in which Putin told Trump, “You are the gift.”

Naomi Klein, boardmember of climate advocacy organization 350.org and author of the 2014 book This Changes Everything: Capitalism vs. the Climate, warned that the Crimea crisis could serve as a gift of its own for the LNG industry — and the fossil fuel industry at-large — for decades to come, regardless of ever-changing geopolitical realities.

“I call this knack for exploiting crisis for private gain the shock doctrine, and it shows no signs of retreating. We all know how the shock doctrine works: during times of crisis, whether real or manufactured, our elites are able to ram through unpopular policies that are detrimental to the majority under cover of emergency,” wrote Klein in The Guardian in April 2014.

“Sure there are objections — from climate scientists warning of the potent warming powers of methane, or local communities that don’t want these high-risk export ports on their beloved coasts. But who has time for debate? It’s an emergency!”

In a recent “Thank You” tour speech held in West Allis, Wisconsin, Trump told the crowd that “We are going to say merry Christmas again.” And for Exxon, Rosneft, and Qatar Petroleum, it’s looking like it’ll be a very merry Christmas, indeed.

For the future of the ever-warming planet and record-warm North Pole in the Arctic where Santa lives and works? Not so much.

By Steve Horn

DeSmog Blog



32 Comments on "Exxon, Qatar Petroleum Get OK to Export U.S. Fracked Gas Amidst Tangled Ties to Russia, ISIS"

  1. Go Speed Racer on Wed, 28th Dec 2016 5:05 pm 

    Doing it all 3rd world. Poison the land of
    the working Americans, the former middle class

    Take their resources from under the Americana feet,
    and export the valuables to foreigners
    leaving behind only poisoned water and land
    for the Joe six pack natives.

    Finally the rural Trump voters get the full
    experience, get phucked and dumped.
    poisoned and bankrupted, so foreigners can
    burn up our resources.

    Enjoy!

  2. onlooker on Wed, 28th Dec 2016 5:11 pm 

    What comes around goes around.

  3. penury on Wed, 28th Dec 2016 5:20 pm 

    Im really asmire hpw in the penultimate paragraph the aurhor manages to make certain that you know “it is all Trump’s fault”.

  4. makati1 on Wed, 28th Dec 2016 6:05 pm 

    The fall was in the cards no matter who reads the teleprompter. Trump is the lucky winner who will get to preside over the collapse of America. If he manages to push it off four more years, I will be surprised. Many huge, negative events in the next four years, I think. 2020 may, no, will, see a whole different world.

  5. Apneaman on Wed, 28th Dec 2016 6:11 pm 

    “Catastrophic Impacts”

    FUCK OFF

    It’s already a little over 1C and 2.5C to 3C is baked in – can’t be avoided. Thing is positive self reinforcing feedback loops are underway and will only speed up as the inertia kicks in. A catastrophe is already baked in. It’s happening as I write. The Arctic is in meltdown. Greenland, and most of the earths glaciers are in melt down. This is a catastrophe. Fuck Joe Romm and the rest of the hopium pimps. These people are becoming as irritating as hard core deniers. Bring on the gas exports and all the rest of it. Let the cancer finish it’s work.

  6. onlooker on Wed, 28th Dec 2016 6:25 pm 

    Funny, how the deniers keep saying yes climate change is a big thing just not in our lifetimes. How freakin convenient. Let’s party on with renewable or without it because it will not be our problem. We discounted and neglected the future one too many times. The future is fast becoming the present

  7. Sissyfuss on Wed, 28th Dec 2016 6:58 pm 

    Oh what a tangled web we weave, great enough to entangle us all.

  8. shortonoil on Wed, 28th Dec 2016 7:06 pm 

    {i}”The most recent bipartisan push in 2014 consisted of the likes of U.S. Rep. John Boehner (R-OH) and U.S. Sen. John McCain (R-AZ), as well former Clinton Administration U.S. Secretary of Energy Bill Richardson, pointing to the utility of exporting U.S.”{/i}

    Is that across the Neo-con state line? Is this the same group that wanted to bomb MOSCOW?

    Hope springs eternal!

  9. Go Speed Racer on Wed, 28th Dec 2016 7:56 pm 

    I don’t notice any global warming.
    Used to be, in December I was pushing a
    snow blower.

    Now it’s December and i push a lawnmower.
    Both are pull start and burn up gas.
    So everyrhing is pretty much the same.

  10. rockman on Wed, 28th Dec 2016 8:26 pm 

    p – “…in the penultimate paragraph the aurhor manages to make certain that you know “it is all Trump’s fault”.” I was wondering where this odd gumbo of bits of facts, swirls of misrepresentations and a few dashes of pure bullshit was going. I’ll just focus on a few choice bites:

    “…gave ExxonMobil a gift: a permit to export natural gas from its Golden Pass LNG…facility…” Gift??? Well kiss my hairy white ass. LOL. Such permits have always been rubber stamps. How do we know this? This was the final permit of a long line of permits. What company is going to spend $billions on such facilities just hoping they get that final permit “gift”?

    “This facility will continue to open up the global market to U.S. natural gas obtained via hydraulic fracturing (“fracking”).” Well, pucker up as I bend over again. LOL. The NG coming out of Sabine Pass is coming from the Henry Hub interchange. Very little to none of that production is coming frac’d wells in the Gulf Coast. And obviously none coming from the primary surge of production from frac’d shales, the Marcellus in New England. Once in the regional gathering system the origin of NG disappears. OTOH nearly all that NG at Henry Hub comes from conventional completions in Louisiana and the offshore GOM including federal leases.

    “The Trump transition team has signaled a potential U.S.-Russia reset, with friendlier relations between Washington and Moscow to follow.” Presumably similar to the same “U.S.-Russia reset” orchestrated a few years ago by President Obama and Secretary Clinton. That reset that encouraged ExxonMobil to enter the now suspicious JV with Russia. Good to remember those time lines. LOL.

    As far as exploiting the Crimea situation for the benefit of the LNG industry here’s another bit from the same 2014 The Guardian article:

    “Congress moved to punish Vladimir Putin for the annexation of Crimea on Tuesday by expanding America’s exports of natural gas to challenge Russia’s energy dominance. In the first of three hearings on natural gas exports this week, the Senate energy committee was told repeatedly that exporting US gas to Europe – or even Asia – would end Putin’s “energy blackmail” by lowering prices and providing an alternative to Russia as Europe’s big energy supplier.”

    So I gather what Naomi is implying is that the US govt, under the direction of the “greenest POTUS” ever, the US was exploiting the Crimea situation to justify exporting our huge surplus of frac’d NG. IOW using Russia’s annexation of the Crimea as a cover story.

    I would hope most here understands by now that there is no “huge surplus” of US NG, frac’d or otherwise. In fact not even a small surplus: granted by just a tiny bit these days but the US is still a NET NG IMPORTER. IOW every cubic foot of NG we inject into the EU (or anywhere else) will have to be pulled from elsewhere in the NG export market. Unless we choose to not supply all the NG US consumers demand.

    Anyway, p, that brings me back to the underlying theme: preparing to lay the blame for increasing NG consumption at the president-elect’s feet: “Trump told the crowd that “We are going to say merry Christmas again.” And for Exxon, Rosneft, and Qatar Petroleum, it’s looking like it’ll be a very merry Christmas, indeed.”

    Just a prediction (which the Rockman still dislikes doing) regarding “frac’d NG” and its damaging effect on the atmosphere: unlikely we’ll see as much produced under the first 4 years of the new POTUS as under the last 4 years of the current POTUS…the “greenest president” in US history. I also doubt we’ll see the same record export volumes of US oil and coal as we witnessed during President Obama’s time in control.

  11. Nony on Thu, 29th Dec 2016 3:49 am 

    The US tipped into net export as of NOV2016, Rock:

    http://www.wsj.com/articles/new-milestone-the-u-s-is-now-a-net-exporter-of-natural-gas-1480258801

  12. Kenz300 on Thu, 29th Dec 2016 7:41 am 

    Wind And Solar Now Cheapest Unsubsidized Electricity Sources In The U.S. – First Solar, Inc. (NASDAQ:FSLR) | Seeking Alpha

    http://seekingalpha.com/article/4031497-wind-solar-now-cheapest-unsubsidized-electricity-sources-u-s

    World Energy Hits a Turning Point: Solar That’s Cheaper Than Wind – Bloomberg

    https://www.bloomberg.com/news/articles/2016-12-15/world-energy-hits-a-turning-point-solar-that-s-cheaper-than-wind

    Solar cheaper than natural gas and coal.

    Climate Change will be the defining issue of our lives.

    Wind and solar are safer, cleaner and cheaper than fossil fuels.

    Cheaper Wins.

  13. Dredd on Thu, 29th Dec 2016 8:39 am 

    Port Arthur is quite susceptible to sea level rise which is well under way there (The NEGIS Revisited).

  14. rockman on Thu, 29th Dec 2016 2:58 pm 

    “The US tipped into net export as of NOV2016, Rock”. Yes…for that month. For 2016 the US is still a net NG importer. Again, not by much. But from Nov we are heading into our high consumption season. From Nov 2016 our net imports increased by more then 70% as the chill set in. But even with that surge in consumption the US will essential still be close to zero net imports/export of NG.

    In years to come? Depends on economic growth, NG prices, rig count and depletion. As far as trends go the US has been increasing NG imports since Aug 2015. Prior to that time NG import had decreased from its all time record high in Aug 2007.

    https://www.eia.gov/dnav/ng/hist/n9100us2M.htm

  15. rockman on Thu, 29th Dec 2016 3:34 pm 

    And just so folks understand the important aspect of US net NG exports:

    US NG production has decreased since reaching its all time high in Juily 2015. And y-o-y US NG consumption has been rather flat since hitting its all time high in Jan 2014.

    IOW the US hasn’t been approaching the status of a NG net exporter because we have an excess of that resource. It’s because foreign consumers are outbidding US consumers for that energy. Becoming a long term net NG exporter is good news for us NG exporters. Why pipeline companies keep laying more connections to Mexico (which became a net fossil fuel importer 2 years ago) and new LNG export terminals are being permitted. Especially when LNG prices increase from $7/MCF to previous highs around $20/MCF. The same reason: follow the $money. For US NG consumers…not so good news.

    The responsibility of the fossil fuel industry is to max value for its investors and not to supply the nation with the energy it needs at a price it can afford.

  16. Nony on Thu, 29th Dec 2016 8:33 pm 

    1. You were wrong about us not being a net exporter. You should acknowledge that.

    2. You are cherry-picking the time period. We are up about 40% in total production over the last 10 years. And that was off of a base of 90% self sufficiency. The only reason that did not tip us to net export was because demand grew almost in step with production and there was a lack of physical infrastructure to allow export.

    ————

    A 40% increase in production in 10 years is HUGE. There is no way you can torture that into saying demand was down or the asset did not show growth. Not in gas you can’t.

  17. Nony on Thu, 29th Dec 2016 8:39 pm 

    https://www.eia.gov/dnav/ng/hist_chart/N9070US2m.jpg

    MASSIVE INCREASE in natural gas production over the last 10 years.

  18. antaris on Thu, 29th Dec 2016 8:55 pm 

    Yea Nony. Looking at the eia. usage increased quite a bit also. Looks like you are the cherry picker.

  19. Boat on Thu, 29th Dec 2016 9:00 pm 

    Early this year I saw the US having a real possible chance at becoming a nat gas exporter. Two weeks or so ago Platts announced the news. greggiet of course went into denial saying it wasen’t true. Lol. Them boys from the north read books that fog the crystal ball.
    The real story is in just a few years the US will be a major exporter. Multiple pipelines are being built to Mexic along with infrastructure to ship nat gas to the world.

  20. antaris on Thu, 29th Dec 2016 10:02 pm 

    Boat/Nony = Shit for brains. Leave it in the ground so future generations of your country might stay warm.

  21. Nony on Thu, 29th Dec 2016 11:26 pm 

    Of course usage increased. But for a PEAK OIL blog, the important point is that the lack of export is NOT from lack of resource, but because we consumed the resource.

  22. Davy on Fri, 30th Dec 2016 4:58 am 

    I have been here on Peak oil dot com for years and before this site it was “Energy Bulletin” and “The Oil Drum”. Back then there was every indication natural gas production was going to spiral down. Now look at the US and one must pause and say wow. We also must review how and why we got here and then the wow is not as fantastic.

    Natural gas was part of a bubble that was part of the monetary repression and easing that occurred post 08 crisis. This is well established on this site and many others. If you go to Zerohedge you can read multiple very well researched people that show what this post 08 bubble economics has done to the real economy. We are in very dangerous economic times and many people just don’t see it. Many people give the economy a constant then go on to predict energy and other issues. Many predictions are flawed because of the constant economy bias. Demand destructive collapse scenarios are not considered but should be because of the huge impact of a small change in global growth once economic minimums are approached.

    The natural gas bubble is part of that bigger post 08 bubble and its fate is tied to it. This price effect and economic growth environment played a big part in this US gas growth. The other issue is extend and pretend economics of the repressive system we are now living with. For reasons of stability the “powers that are” decided to alter generally accepted rules to allow a business environment that would not have been possible just 10 years ago. Things like mark to market and normal covenants are now altered to a new reality. Gas prices are not robust enough to support the current activity if this repressive system destabilizes. Can you imagine these gas companies and an interest rate of 5%? Sure the resource is there but how long will the economy be there to use the resources?

  23. rockman on Fri, 30th Dec 2016 4:21 pm 

    Boat – “The real story is in just a few years the US will be a major exporter.” Not in a few years: the US began ramping up exports in 2000. Since 2009 we’ve exported at least 1 trillion cubic feet per year reaching an all time record 1.78 trillion cubic feet in 2015.

    https://www.eia.gov/dnav/ng/hist/n9130us2M.htm

    Similarly NG consumption has increased to a record high in 2015:

    https://www.eia.gov/dnav/ng/hist/n9140us2a.htm

    With regards to US NET NG imports the US exported slighly more in November then it imported. But for 2016 to date the US has imported 600+ bcf more then it exported.

    https://www.eia.gov/dnav/ng/hist/n9180us1M.htm

    Now the question remains: will US NG exports exceed imports in 2017? Check the import, export, prodution and consumption curves and make your predictions. In the meantime the Rockman will just stick with the documented facts. Such as the FACT that in 2016 the US has imported over 1/2 trillion cubic feet of NG more then it exported.

    But the focus really shouldn’t be on the dry stats IMHO. It’s the nature of the dynamics at play: US NG exports have not increased as a result of a lack of a domestic market. All time record high consumption in 2015 indicates that. And as of December we are heading into our high NG consumption season. Anyone else notice the latest very cold snap?

    The increasing export trend is a result of foreign buyers outbidding for this resource. In particular Mexico thanks to an increase in new pipelines from Texas with even more planned. And now increasing LNG exports have opened up more markets that can justify higher prices then US consumers.

    Becoming a long term net NG is not a positive for the country, especially for the domestic NG consumers. Of course, it is for all of us NG producers: we don’t care if you Yankees freeze in the dark as long as the Mex’es and Chinks pay us a higher price. LOL.

    It ain’t personal…just business. Well, maybe that “Yankee” slap sounds a tad personal.

  24. GregT on Fri, 30th Dec 2016 6:13 pm 

    Boat,

    “greggiet of course went into denial saying it wasen’t true.”

    Because it isn’t true. More MSM BS to keep the ‘investors’ complacent.

  25. Nony on Fri, 30th Dec 2016 7:16 pm 

    EIA is predicting very close to breakeven on the net import/export question for 2017:

    http://www.eia.gov/outlooks/steo/tables/pdf/5atab.pdf

    See the last column, entries 6 through 9. Doing the math, you get their prediction of 1.23 BCF/d net LNG EXports and 1.54 BCF/d net IMports.

    Doing the math on that gives you 0.31 BCF/d net imports. On a base of ~75 BCF/d, that amount of import is 0.4%. IOW, we are predicted to supply 99.6% of our consumption in 2017.

  26. Nony on Fri, 30th Dec 2016 7:17 pm 

    third para: the 1.54 BCF/d is the net pipeline imports. Canada predicted to send us more than we send to them or to Mexico.

  27. GregT on Fri, 30th Dec 2016 7:19 pm 

    Close only counts in horseshoes and hand grenades Nony, besides, the EIA doesn’t exactly have a stellar track record when it comes to predictions.

  28. Boat on Fri, 30th Dec 2016 8:48 pm 

    Rock,

    I ment to say a major net nat gas exporter. For example 4 pipelines to Mexico are on schedule to be completed by June of 2017. One of them as early as Jan. Total they have the capacity of 3.5 Bcf/d. There are other pipelines in the works and of course the growing shipping exports.

  29. GregT on Fri, 30th Dec 2016 8:53 pm 

    Did you not read the Rockman’s post above Boat? Reading comprehension failure, yet again?

  30. Boat on Fri, 30th Dec 2016 9:01 pm 

    Nony,

    I think the Eia will be off off on nat gas exports along with their prediction on US oil averaging 100,000 bpd decline for 2017. Production is ramping up and rigs are being added almost every week.

  31. Nony on Fri, 30th Dec 2016 9:03 pm 

    Boat, it is close enough that weather driven demand variability will be enough to swing it to net export (or the converse). The uncertainty is probably 1-2 BCF/d. Easily greater than the deficit. It really is on a knife edge. But still, their prediction is slight deficit.

  32. GregT on Fri, 30th Dec 2016 9:04 pm 

    “I think the Eia will be off off on nat gas exports along with their prediction on US oil averaging 100,000 bpd decline for 2017. ”

    Now there’s something we can agree on Kevin. The EIA has an uncanny record of being overly optimistic in it’s predictions. Why do you think that would be the case?

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