US LNG EXPORTS
Posted: Sun 19 May 2013, 16:06:29
From:
http://www.rigzone.com/news/oil_gas/a/1 ... ort_Permit
Interesting spin. Even more interesting is what isn’t stated as obvious as it seems: why is it happening now? More later.
“The Obama administration on Friday cleared the way for broader natural gas exports by approving a $10 billion facility in Texas, a milestone in the U.S. transition into a major supplier of energy for world markets. A group of private investors plans to turn an import terminal into an export facility to ship natural gas to Japan and other nations. The project, known as Freeport LNG, is expected to require more than $10 billion in investment.
In giving Freeport the green light, the Department of Energy signaled that it found the prospective benefits from exporting energy outweighed concerns about possible downsides for the U.S. economy.”
Beneficial to us NG producers that is. Thank you.
“Proponents of greater exports, including the oil and gas industry, say that exporting inexpensive natural gas from the U.S. will help the U.S. trade balance, help advance the adoption of clean-burning fuels around the world and shore up energy-poor U.S. allies. Opponents counter that exports may cause domestic prices to rise, hurting consumers and some industries such as chemicals that have benefited from cheap natural gas."
A distinction is needed between whose “value” you’re talking about. Selling NG to Japan at 4X the price of what that production can be sold domestically creates a greater value…for a producer.
“The Department of Energy said it had given preliminary authorization to the Freeport project to export up to 1.4 billion cubic feet per day of liquefied natural gas. The Freeport terminal is the second export facility approved by the Obama administration. Cheniere Energy Inc.'s (LNG) Sabine Pass facility in Louisiana won approval in May 2011 to export LNG to the countries without free-trade agreements."
Again, improves certain portions of the US economy…like mine. For US consumers…not so much.
“Friday's decision is an important harbinger for the remaining 19 applications to export gas to non-FTA countries. That's because according to law, gas exports are presumed to be in the public interest unless shown otherwise.”
Again, with defining the “public” as the Rockman.
"Freeport LNG has signed preliminary 20-year contracts to sell much of the export facility's capacity to Chubu Electric Power Co., Osaka Gas Co. and BP Energy Co. These Japanese utilities have a partial stake in the portion of the facility that is feeding the Japanese demand.”
And now the truly BS portion of the show:
“The combination of hydraulic fracturing and horizontal drilling has unleashed a natural-gas bonanza that made the U.S. the world's largest natural-gas producer.”
Since the very beginning of the fossil fuel age the US has been one of the two largest NG producers on the planet along with Russia. And during the majority of those years the US led Russia. The boom in NG production from the shales helped for sure. But the DW GOM has been a big contributor. When the Independence DW GOM NG hub began operating a few years ago over night US NG production increased about 1 BCF/day. And remember who also benefits from selling that NG for a higher price: the royalty owner…the US govt. The same folks that approved the export license.
“This is an encouraging step," Mr. Bhatia said. "But you need more than one to get a better idea of what pace we can expect them to process the remainder of that queue."
Encourages the heck out of me and other NG producers. We don’t care if the US consumer gets the NG or not. We just want to get paid more for it.
“The DOE said it conducted an "extensive, careful review" which considered "the economic, energy security, and environmental impacts," and found that the project was "not inconsistent with the public interest."
And again, the “public interests” of the Rockman greatly appreciates this review. I know few believe me but in general the oil patch views President Obama as one of the best we’ve had in the White House as far as the industry goes. Social and tax policies…that’s a different matter. Don’t get me wrong: from a position of self interest I’m all for as much US LNG exports as possible. I just don’t feel the need to wrap it up in an American flag and say it’s the patriotic thing to do. Not as long as we have boots on the ground in the ME getting zapped by IED’s from time to time.
http://www.rigzone.com/news/oil_gas/a/1 ... ort_Permit
Interesting spin. Even more interesting is what isn’t stated as obvious as it seems: why is it happening now? More later.
“The Obama administration on Friday cleared the way for broader natural gas exports by approving a $10 billion facility in Texas, a milestone in the U.S. transition into a major supplier of energy for world markets. A group of private investors plans to turn an import terminal into an export facility to ship natural gas to Japan and other nations. The project, known as Freeport LNG, is expected to require more than $10 billion in investment.
In giving Freeport the green light, the Department of Energy signaled that it found the prospective benefits from exporting energy outweighed concerns about possible downsides for the U.S. economy.”
Beneficial to us NG producers that is. Thank you.
“Proponents of greater exports, including the oil and gas industry, say that exporting inexpensive natural gas from the U.S. will help the U.S. trade balance, help advance the adoption of clean-burning fuels around the world and shore up energy-poor U.S. allies. Opponents counter that exports may cause domestic prices to rise, hurting consumers and some industries such as chemicals that have benefited from cheap natural gas."
A distinction is needed between whose “value” you’re talking about. Selling NG to Japan at 4X the price of what that production can be sold domestically creates a greater value…for a producer.
“The Department of Energy said it had given preliminary authorization to the Freeport project to export up to 1.4 billion cubic feet per day of liquefied natural gas. The Freeport terminal is the second export facility approved by the Obama administration. Cheniere Energy Inc.'s (LNG) Sabine Pass facility in Louisiana won approval in May 2011 to export LNG to the countries without free-trade agreements."
Again, improves certain portions of the US economy…like mine. For US consumers…not so much.
“Friday's decision is an important harbinger for the remaining 19 applications to export gas to non-FTA countries. That's because according to law, gas exports are presumed to be in the public interest unless shown otherwise.”
Again, with defining the “public” as the Rockman.
"Freeport LNG has signed preliminary 20-year contracts to sell much of the export facility's capacity to Chubu Electric Power Co., Osaka Gas Co. and BP Energy Co. These Japanese utilities have a partial stake in the portion of the facility that is feeding the Japanese demand.”
And now the truly BS portion of the show:
“The combination of hydraulic fracturing and horizontal drilling has unleashed a natural-gas bonanza that made the U.S. the world's largest natural-gas producer.”
Since the very beginning of the fossil fuel age the US has been one of the two largest NG producers on the planet along with Russia. And during the majority of those years the US led Russia. The boom in NG production from the shales helped for sure. But the DW GOM has been a big contributor. When the Independence DW GOM NG hub began operating a few years ago over night US NG production increased about 1 BCF/day. And remember who also benefits from selling that NG for a higher price: the royalty owner…the US govt. The same folks that approved the export license.
“This is an encouraging step," Mr. Bhatia said. "But you need more than one to get a better idea of what pace we can expect them to process the remainder of that queue."
Encourages the heck out of me and other NG producers. We don’t care if the US consumer gets the NG or not. We just want to get paid more for it.
“The DOE said it conducted an "extensive, careful review" which considered "the economic, energy security, and environmental impacts," and found that the project was "not inconsistent with the public interest."
And again, the “public interests” of the Rockman greatly appreciates this review. I know few believe me but in general the oil patch views President Obama as one of the best we’ve had in the White House as far as the industry goes. Social and tax policies…that’s a different matter. Don’t get me wrong: from a position of self interest I’m all for as much US LNG exports as possible. I just don’t feel the need to wrap it up in an American flag and say it’s the patriotic thing to do. Not as long as we have boots on the ground in the ME getting zapped by IED’s from time to time.