Lack of LNG Market in CA, Export Agenda
NO Pipelines Needed!!, 27.06.2010 00:28
Corporations pushing for natural gas pipelines (Pacific Connector and Ruby Pipeline) may be more interested in exporting the resource overseas than importing natural gas, as there isn't much of a market for natural gas in CA as previously claimed. Once again corporations like Fort Chicago and El Paso are rushing to get these pipelines into the ground so they can profit from selling off resources while leaving the sites polluted and empty of resources.
"LNG efforts continue as in-state needs fade away."
by Thomas D. Elias
"There's been plenty of good news lately for Californians who oppose setting up import terminals for liquefied natural gas (LNG) in this state. But the jury is still out on whether that means California consumers will be freed from the prospect of becoming dependent on that pricey form of imported energy.
The good news first: Only one effort to build a California LNG import facility remains active and it isn't very active. That would be the proposed but almost dormant Esperanza receiving terminal, which would be built 15 miles off the coast of Long Beach.
The list of possibilities dwindled to that one when the state Lands Commission during the late spring formally terminated a bid to build a terminal tentatively called "Clearwater Port" on the coast just north of Ventura. The termination was automatic because there had been no activity by Clearwater's would-be builder, Houston-based NorthernStar Star Natural Gas.
Shortly after the Lands Commission action, NorthernStar declared itself bankrupt.
The demise of Clearwater marked the third LNG proposal to go under in the last 10 years, joining other failed plans to site facilities near Eureka and off the coast near the Los Angeles-Ventura county line.
LNG is natural gas supercooled to a liquid and shipped thousands of miles across oceans in gigantic, multi-hulled tankers, then reheated back to a gaseous state and pumped into existing pipeline networks. The only foreign LNG now able to reach California comes through Sempra Energy's Costa Azul receiving plant north of Ensenada, not far south of the Mexican border.
There's further good news for California consumers in the forecasts of both the U.S. Energy Information Agency and several leading private natural gas consultants indicating there will be no need for LNG anytime in the foreseeable future.
One reason for that is a fast-increasing effort by U.S. companies to exploit the gas contained in shale deposits in Wyoming and Colorado.
Consultant Ben Schlesinger, who has worked for Exxon Mobil, BP, Shell Oil, Tokyo Gas, Nigeria LNG and other industry giants, is one who predicts the glut of American gas coming on-line in the next several years will create an oversupply of gas not only here, but also in Europe - which imports almost all its energy.
This suggests it's likely that some American LNG facilities will be converted from receiving gas to sending it overseas - the very thing that's about to happen to a just-approved facility at Kitimat, Canada, on the British Columbia coast north of Vancouver. First designed as an import plant, Kitimat now will become an exporting facility.
And yet, there's still some potential bad news out there for California gas customers worried about the high cost of LNG. It comes from Oregon, where a plant at Coos Bay is well along in the approval process. Oregon's Public Utilities Commission estimated long ago that three-fourths of all imports coming to any terminal in that state would end up in California.
Why should that concern consumers? Because each specially-built LNG tanker costs more than $1 billion and it takes at least six to keep any receiving plant supplied. The plants that first turn natural gas liquid and then turn it back to an invisible gas cost more billions. Those costs are inevitably included in the price consumers pay for whatever gas they use that stems from LNG, raising them substantially. No matter how piously companies like PG&E, Southern California Gas and San Diego Gas & Electric (SoCal Gas and SDG&E are both fully-owned by Sempra) deny that LNG will increase rates, the sheer amounts invested in LNG facilities guarantee it.
Which means millions of Californians have a major interest in a very local-looking Oregon dispute. For the longer farmers in two Oregon counties can delay building of a link between Coos Bay and PG&E's existing pipeline for Canadian gas near Roseburg, Ore., the greater will be the predicted American natural gas glut.
And the greater the glut, the lower the price of all natural gas worldwide. If the price gets too low, there will be little incentive for building any new LNG plants. That's what happened in the early 1980s, when both PG&E and Southern California Gas insisted LNG was critical for California's energy needs - only to see crashing gas prices make their plan for an LNG plant at Point Conception in Santa Barbara County economically infeasible. As a result, Californians have paid an estimated $40 billion less in gas bills over the last 30 years than they otherwise would have - and there have been none of the shortages the big utilities predicted. The sky did not fall when Point Conception was left in its natural state.
Thomas D. Elias is a syndicated columnist who covers California issues (e-mail: tdelias [at] aol.com). For more Elias columns, visit 
http://www.californiafocus.net.
http://www.presstelegram.com/opinions/ci_15363509
The reason for the Ruby Pipeline may be more connected to exporting natural gas resources to Asia via the Pacific Connector pipeline as both meet in Malin. Here's the thoughts on that;
"Why is pipeline so important?
On August 3rd, the Coos County Commissioners will decide whether to issue a land use
permit to the Williams Companies, Inc. for the construction of the Pacific Connector
pipeline. The proposed 230-mile pipeline will be a 36-inch diameter, high-pressure
(1,400 psi) transmission mainline that will go from the North Spit of Coos Bay to
the eastern county line, and from there to the natural gas connector hub near Malin,
just north of the California border.
Ten years ago, importing liquid natural gas (LNG) might have made sense, but new
technology has made it possible to extract natural gas from shale beds deep
underground. The U.S. is so rich in shale beds that it has become the Saudi Arabia
of natural gas, and the Rocky Mountains are a gas mogul's dream. The price of
domestic natural gas is down around four dollars for a million British thermal
units, so there is really no point in importing LNG. You won't make your investors
happy by buying huge quantities of gas on the world market and trying to sell it for
a profit in Malin, where the going price is half or a third of what you paid for it.
If there is no point in importing LNG, then there is no point in building LNG import
terminals, but the Pacific Connector pipeline is moving right ahead. Why is that?
The reason for the Pacific Connector pipeline is the Ruby pipeline. Ruby will run
from the Opal Hub in southwestern Wyoming to the connector hub near Malin. Ruby is a
$3 billion, 675 mile, 42 inch diameter natural gas transmission pipeline that will
carry 1.5 billion cubic feet of Wyoming shale gas per day. The Pacific Connector
will carry 1 billion cubic feet per day. The two pipelines will connect near Malin.
But, why?
The obvious reason for the Pacific Connector pipeline is to make billions of dollars
exporting Wyoming shale LNG to the gas-dependent countries of Asia, especially
Japan, South Korea, Taiwan, and don't forget China. When the economy is good, Japan
pays as much as eighteen to twenty dollars per million Btu. If you could buy natural
gas at a little over four dollars per million Btu in Malin, and sell it in Japan for
four or five times that amount, how many LNG carriers (huge cryo-tankers) would you
put to work on the Coos Bay to Japan route?
After the pipeline, all that is needed is a cryogenics plant for chilling the gas to
a liquid state at minus 260 ºF, and an LNG export terminal for loading LNG carriers.
They will be located where the Jordan Cove import terminal was supposed to be. This
brings up more questions.
Should home owners, farmers and foresters be forced to give up a wide strip of their
own land so that LNG exporters can have their pipeline and make billions selling LNG
in the Orient? Should fishermen and shippers be forced to give up access to Coos Bay
for the security of a continuous series of LNG carriers? Should Oregon taxpayers be
made to pay for widening and deepening the Coos Bay channel to accommodate LNG
carriers?
Why should we permit the county's rivers and pristine streams to be trenched or
bored under for the pipeline? Is it worth the damage to sensitive natural areas
that will occur?
If national security depends on being self-sufficient in energy, why should the
nation's natural gas reserves be sucked up and sold off? A nation dependent upon
imported fuels is a nation in constant jeopardy. The shale gas reserves are this
nation's insurance against energy blackmail and fuel embargoes. Does Coos County
really want to play a part in weakening the nation's defenses?
Perhaps the current county commissioners should delay making the decision on the
land use permit until after the November elections. The new commissioners might like
to think this through one more time, since the pipeline and the terminal are going
to happen on their watch."
written by;
Bob Fischer
Bandon, OR
The drilling and extraction of natural gas from domestic sources also has shown to lead to massive destruction, mostly of the groundwater that intermingles with the shale and natural gas deposits. One excellent resource to understand the risks of this is the recent HBO documentary called "Gasland". Here's their website;
http://gaslandthemovie.com/
Most of the natural gas extraction from places like Wyoming is done by "fracking" of hydraulic fracturing. This has severe side effects, here is some background from the Gasland website;
"Hydraulic Fracturing FAQs
How does hydraulic fracturing work?
Hydraulic fracturing or fracking is a means of natural gas extraction employed in deep natural gas well drilling. Once a well is drilled, millions of gallons of water, sand and proprietary chemicals are injected, under high pressure, into a well. The pressure fractures the shale and props open fissures that enable natural gas to flow more freely out of the well.
What is horizontal hydraulic fracturing?
Horizontal hydrofracking is a means of tapping shale deposits containing natural gas that were previously inaccessible by conventional drilling. Vertical hydrofracking is used to extend the life of an existing well once its productivity starts to run out, sort of a last resort. Horizontal fracking differs in that it uses a mixture of 596 chemicals, many of them proprietary, and millions of gallons of water per frack. This water then becomes contaminated and must be cleaned and disposed of.
What is the Halliburton Loophole?
In 2005, the Bush/ Cheney Energy Bill exempted natural gas drilling from the Safe Drinking Water Act. It exempts companies from disclosing the chemicals used during hydraulic fracturing. Essentially, the provision took the Environmental Protection Agency (EPA) off the job. It is now commonly referred to as the Halliburton Loophole."
