Escape from LNG in Eastport, Maine?

A fine letter that certainly reverberates when it comes to the evacuation of Route 1 and Route 190.....

How do we outrun a ball of flaming gas?


The Herald News
Posted Nov 20, 2009 @ 09:44 AM

The time has come for FERC to put an end to the Weaver’s Cove debacle. There is a new FERC, one that actually appears to be listening to the public.

A long-standing argument of those opposed to the Weaver’s Cove facilities has been the apparent impossibility of having a viable evacuation plan in the event of an emergency. That should be among the first considerations for a federal agency charged with regulating an industry in which the potential for a catastrophic accident exists. Given the characteristics of the product, a viable evacuation plan should be part of the pre-filing process before considering a full application for an LNG facility. Government-sponsored studies agree. Most recently, the Sandia Studies describe scenarios in which thermal radiation could generate second-degree burns a mile away in 30 seconds or a gas vapor cloud that could travel two miles before igniting.

On July 9, FERC wrote to Freeport LNG (on Ouintana Island near Freeport, Texas) in response to residents expressing public safety concerns about that company’s plan to bring truckloads of LNG to the facility. FERC required a “bolstered emergency response plan,” asking the company to “identify evacuation zones for potential truck incidents at various locations along their route.”
The maximum number of people was to be calculated for each zone, even during tourist season, and “corresponding assembly area(s) and marine pick-up point(s) had to be identified” (The Facts, “Freeport Must Boost Emergency Plan,” July11, 2009).

In addition, the company was told to provide verification of the availability of rescue vessels from the Freeport fire and police departments, the Coast Guard and the Texas Department of Safety.
In October, Freeport LNG complied with the FERC order. FERC is following up with a visit to the area to validate the plan.

The fact is, while Hess LNG could designate evacuation routes for an emergency response plan, they would be a sham in the event of a real emergency. With respect to the land-based tank and regasification plant, there are dead-end streets from which the only means of egress in an emergency is toward the facility. The more than 9,000 people who live within a mile would have 30 seconds if a significant LNG leak ignited, and if it didn’t, all people and structures up to two miles away could be vulnerable.

The Massachusetts Executive Office of Public Safety and Security wrote to FERC in February stating that after consulting with fire chiefs in the area: “It is feared that any evacuation would result in mass chaos and create traffic jams that would bring most vehicles to a standstill. Not only would this interfere with evacuation, it would severely impair any kind of emergency response to the area of the proposed facility.” They also stated, “It may not be possible to overcome all the safety and security implications regardless of the resources.”

The GAO, the Pipeline Safety Act of 1979 and the Energy Policy Act of 2005 have all recommended remote siting as the way to ensure public safety. In a recent book, “LNG, A Level Headed Look at the Liquefied Natural Gas Controversy,” author Virginia Thorndike concludes, “It seems like a no-brainer that LNG ships and facilities should be kept away from population centers and from industrial concentrations that could both attract and magnify the consequences of an LNG incident.”

No land-based U.S. LNG import regasification facility has been built in an urban area since the first one in Everett in 1971. Remote siting recommendations in federal law were intended to provide a vehicle to avoid a similar mistake.

There is a new FERC and it’s time for them to take a new look at the original Weaver’s Cove siting. The city of Fall River should insist that the precedent set for Freeport is applied to the Weaver’s Cove siting before the review process continues further. It is time for FERC to tell Hess LNG what they should have been told in the first place. Invest in a real offshore project or buy a remotely sited parcel of land that minimizes risk. If Weaver’s Cove Energy had done that in the first place, they’d be operating by now.

John C. Keppel
Fall River

Editor’s note: John Keppel is a member of the Coalition for Responsible Siting of LNG.

Arthur A. MacKay on LNG

Arthur A. MacKay
5474 Rte 127
Bocabec, NB
Canada
E5B 3J4
Kimberly D. Bose,Secretary
Federal Energy Regulatory Commission
888 First St.,NE
Room1A
Washington, DC 20426
9/04/2009
Re: Downeast LNG – Docket CP07-52
Dear Ms. Bose:
Those of us who live on the Canadian side of Passamaquoddy Bay have, for some time now, been expressing our concerns about the establishment of LNG terminals at sites proposed for Passamaquoddy Bay on the Maine side and the proposed passage of LNG tankers, as well as attending tug boats and security vessels, through Head Harbour Passage.
I continue to be saddened that our American friends remain unaware that we are protecting a particularly unique ecosystem that fuels a local “eco-economy” that draws its revenues and employment from a truly irreplaceable environment. Well over a half billion dollars in annual revenues are created here each year through tourism, aquaculture, fisheries, marine education, marine research and other resource-based industries. Thousands of jobs depend on these resources.

Senator Susan Collins' recent attempts at intervention (see her recent statement at:
http://collins.senate.gov/public/continue.cfm? FuseAction=PressRoom.WeeklyColumn&ContentRecord_id=85706b45-802a-23ad-4751- d99090ccf090&Region_id=&Issue_id=&CFID=15640595&CFTOKEN=54558949 clearly show the widely held belief in US government circles, that our stance against LNG has a political motivation or that we are acting on behalf of Irving Oil, or we are against development, or we are against LNG.

None of this is true. It is really all about us ... the ordinary, everyday citizens of Charlotte County and our very well established and working “eco-economy”. These are the folks who will suffer if LNG and associated businesses turn this special place into an industrial port.
When the very first LNG proposal hit the streets, the citizens of Charlotte County, NB engaged our politicians on all levels, to protect our vital natural assets and, in particular, to protect Head Harbour Passage which is the centre of the unique and productive ecosystem “engine” that powers the Bay of Fundy and northern Gulf of Maine. It is all about this special place; not Irving Oil, not sovereign
manoeuvring, and not political tradeoffs. This place is special. This place is economically valuable. If in the near future we do not protect these ecosystem gifts then we do so at our own peril. Simply put, Quoddy is the wrong place for LNG or the development of heavy industry.
I set up a blog a year ago in an attempt to inform the world about just how special the Quoddy Region is and the vital role Head Harbour Passage plays in this and how vital it is to many endangered and important marine species including finback whales, minke whales, harbour porpoise, humpback whales, north Atlantic right whales, as well as marine birds, fish, and invertebrates of all kinds. Over
3,000 different species have been recorded here so far, many of which support our resource-based industries. Well ilovequoddyWILD.blogspot.com has become “wildly popular” to say the least and residents have been sending their sightings day after day for the last year.
And this summer Quoddy is at its best. The usual resident finback whales, minke whales, harbour porpoise, eagles, ospreys, falcons, tuna and more have been entertaining visitors and residents alike. But this all changed last week when humpback whales, north Atlantic right whales, Mola mola, basking
sharks, schools of gigantic bluefin tuna and more moved into the area to feed on the abundant copepods, krill, and forage species. Head Harbour Passage and vicinity is literally “plugged solid” with life.
I am submitting this internet link, in the hopes that you and your staff will be able to get a true feeling for the importance of Head Harbour Passage. Please, I urge you to visit and study this site and to continue to monitor it. I will be attempting to collate the data this fall, but, in the meantime, I can assure
you that you will learn a great deal about why this place is so special. The contributions from Quoddy citizens show their love for this place and how vital and important the Quoddy region truly is.

Clearly, LNG does not belong in this particular location.
The link to the blog is:
http://ilovequoddywild.blogspot.com
The entire link for Head Harbour Passage is:
http://ilovequoddywild.blogspot.com/search/label/Head%20Harbour%20Passage


Respectfully submitted
Arthur A. MacKay, B.Sc
Attachment: PDF of Head Harbour Passage section at Ilovequoddywild.blogspot.com

bad call on LNG?

By RUSSELL GOLD

In the summer of 2003, former Federal Reserve Chairman Alan Greenspan appeared before a congressional committee to share his thoughts about the U.S. natural-gas market. It might have been better for the industry, and some investors, had he kept those views to himself.


Recent price spikes, Mr. Greenspan said, were the result of increased demand chasing limited U.S. supplies. Natural gas heats about half of U.S. homes and generates 20% of the nation's electricity.

To stabilize the market, Mr. Greenspan said, the U.S. needed to become a major importer of liquefied natural gas, or LNG. Moreover, he added, "Access to world natural-gas supplies will require a major expansion of LNG terminal import capacity." New facilities would have to be built in the U.S. to handle the expected surge in imports.

Mr. Greenspan and the industry experts who shared this view -- and there were many -- couldn't have been more wrong. But within a year of his testimony, there were plans for 40 new or expanded LNG terminals under consideration in North America, according to a tally by the Federal Energy Regulatory Commission. By March 2005, the list had grown to 55.

Today only six have been built, and most of those sit idle. Weeks pass between visits from a tanker full of frosty LNG. Even before the economic slowdown, it was clear the nation had ample natural-gas supplies. Large-scale imports simply weren't needed. And new reports suggest the U.S. won't need to turn into a massive importer of natural gas anytime soon.

How did the conventional wisdom get it so wrong?
Shale Shock

Forecasts can swing abruptly when it comes to figuring out where natural gas is needed and how much. Expectations of future supply can change quickly, too. As this market grows and adjusts, once-lauded business plans can quickly be swept aside.

"There is still a lot of uncharted territory," says Bob Fryklund, vice president of industry relations at energy consulting firm IHS Inc. in Houston. "People are still trying to understand how this market works."

A few years ago, most people looked at U.S. natural-gas production and saw it entering a slow, terminal decline. But in fact, the opposite has happened. Rising prices and easy financing encouraged a horde of companies to develop "unconventional" gas fields such as the Barnett and Haynesville shales, located, respectively, in north Texas and along the Texas-Louisiana border. These shale wells, once thought to be too costly and difficult to exploit, succeeded beyond everyone's expectations.

"We went through a period of high prices that allowed a higher-priced supply to mature enough that costs have come down," says Jen Snyder, head of North American natural-gas research for Edinburgh-based consultant Wood Mackenzie.
[The Journal Report: Energy]

The unconventional wells are producing more gas with each passing season -- and becoming less expensive to drill. Recently drilled wells in the Haynesville shale are starting off at 24 million cubic feet a day and are profitable even with natural-gas prices as low as $4 per million British thermal units. "Huge," was the succinct appraisal of the Haynesville shale recently by a BMO Capital Markets energy analyst.

This surge of new gas has lowered domestic prices and reduced the need for imports. Meanwhile, companies that bought into the earlier vision of soaring imports and strings of new terminals went from being Wall Street darlings to also-rans.
Cheniere's Play

One of these is Houston-based Cheniere Energy Inc. Cheniere Chairman and Chief Executive Charif Souki was an early believer in the future of import terminals. He decided back in 2000 to pursue an aggressive LNG strategy, securing land and permits and building terminals. The plan was to build the entryway for imported gas and charge a fee to anyone who wanted in.

In 2004 and 2005, Cheniere made presentations to Wall Street analysts about how it would build a string of LNG terminals. It held options on land to develop terminals from Alabama all the way down to Brownsville, Texas, on the Mexican border. In some presentations, it used a map that seemed to suggest its terminals would dominate the western half of the Gulf of Mexico.

Investors responded positively to that vision and pushed Cheniere shares, which during 2004 had traded for around $10, to a high of about $44 in 2006.

But Cheniere was preparing for an incoming wave of imported LNG that hasn't arrived. It built the Sabine Pass facility, on the waterway straddling the Texas-Louisiana border, large enough to accommodate one LNG tanker a week. Only three arrived from the time the facility opened last April to the end of 2008. Cheniere's plans to build another LNG terminal in Corpus Christi, Texas, meanwhile, are dormant, as are plans for a terminal in Cameron Parish, La.

The company's miscalculation has hammered the stock. Its shares are trading for less than $5, and the company has struggled with liquidity. Last April, it laid off more than half of its 360 employees in an effort to preserve cash.

"I underestimated price volatility," says Mr. Souki, who adds that he never expected natural-gas prices to rise as quickly as they did from early 2002 to mid-2005 -- the surge that made it profitable for other companies to tap into domestic supplies such as the Barnett and Haynesville shales.
Change in Outlook

The federal government, too, has radically changed its forecasts. In 2006, the Energy Information Administration forecast that LNG imports would reach 6.4 trillion cubic feet in 2025. But in its Annual Energy Outlook released in December, it slashed that to 1.2 trillion cubic feet. Imported natural gas, including pipelines from Canada, made up 16% of U.S. natural-gas consumption in 2007, but is expected to drop to below 3% by 2030.

Last year, a little more than 1% of gas consumed in the U.S. was delivered into the nation's pipeline grid by LNG tankers. Some analysts have begun asking whether LNG import levels will ever rise much above this level. "North America may be out of the loop, may be self-sufficient," says Jim Jensen, a natural-gas consultant in Weston, Mass.

Mr. Souki insists that the situation will improve and that gas prices will moderate at a level favoring imports because of their lower operating costs. "I have not changed my views," he says.

Others believe that more LNG will come to the U.S. this year as well -- but not to make up for domestic shortfalls, as routinely happens with oil.
Dumping Ground?

Instead, North America is becoming a dumping ground for the world's excess natural gas. In 2009, new LNG supplies from Indonesia, Qatar, Russia and Yemen are expected to enter global markets, at a time when a depressed global economy has shrunk demand for fuel. The U.S. Gulf Coast, meanwhile, is perhaps the only region in the world capable of absorbing and storing this enormous excess gas supply.

LNG sellers will first fill up markets in Asia and Europe, which pay top prices. What's left over will likely head to underused terminals in North America. It's "the market of last resort," says Ira Joseph, an LNG analyst with PIRA Energy in New York.

The bad news is that the LNG will arrive at a time when big users, such as the petrochemical and fertilizer industry, are cutting demand, and as even more domestic supply comes from the giant new unconventional wells.

The result: Storage will fill up, and prices could crater.

Some of the overseas LNG may end up entering the U.S. through Sabine Pass. Cheniere sold half of the capacity at Sabine Pass to Total SA and Chevron Corp., global energy giants that wanted to ensure access to U.S. gas markets. But Cheniere kept the other half of the import capacity for itself, in hopes of buying spot cargoes and importing the gas itself.

If this flow of LNG does arrive, it will come none too soon for Cheniere, which hasn't turned an annual profit since it first issued stock to the public in 1996. It still owns half of the capacity at Sabine Pass, and unused terminal space doesn't generate revenue. In February 2008, the company needed to borrow to pay off debts and maintain liquidity.

"It was a miserable time to be raising money and a miserable time to be in the LNG business," says Mr. Souki. Accustomed to raising capital for borrowing costs of 7% to 8%, it settled for a $250 million convertible equity deal in August for which it must pay 12% interest.

The $250 million is enough to keep Cheniere afloat for another three years, according to the company. By then, Mr. Souki says he expects to have sold half again of the capacity Cheniere has held onto at Sabine Pass.
—Mr. Gold is a staff reporter for The Wall Street Journal in Austin, Texas.

Write to Russell Gold at russell.gold@wsj.com

St. Andrews Protests LNG terminals

Death of LNG?

* FEBRUARY 8, 2009, 4:29 P.M. ET

Producers
Bad Call
The conventional wisdom said that the U.S. would soon become a big importer of natural gas. The conventional wisdom blew it.

By RUSSELL GOLD

In the summer of 2003, former Federal Reserve Chairman Alan Greenspan appeared before a congressional committee to share his thoughts about the U.S. natural-gas market. It might have been better for the industry, and some investors, had he kept those views to himself.

Recent price spikes, Mr. Greenspan said, were the result of increased demand chasing limited U.S. supplies. Natural gas heats about half of U.S. homes and generates 20% of the nation's electricity.

To stabilize the market, Mr. Greenspan said, the U.S. needed to become a major importer of liquefied natural gas, or LNG. Moreover, he added, "Access to world natural-gas supplies will require a major expansion of LNG terminal import capacity." New facilities would have to be built in the U.S. to handle the expected surge in imports.

Mr. Greenspan and the industry experts who shared this view -- and there were many -- couldn't have been more wrong. But within a year of his testimony, there were plans for 40 new or expanded LNG terminals under consideration in North America, according to a tally by the Federal Energy Regulatory Commission. By March 2005, the list had grown to 55.

Today only six have been built, and most of those sit idle. Weeks pass between visits from a tanker full of frosty LNG. Even before the economic slowdown, it was clear the nation had ample natural-gas supplies. Large-scale imports simply weren't needed. And new reports suggest the U.S. won't need to turn into a massive importer of natural gas anytime soon.

How did the conventional wisdom get it so wrong?
Shale Shock

Forecasts can swing abruptly when it comes to figuring out where natural gas is needed and how much. Expectations of future supply can change quickly, too. As this market grows and adjusts, once-lauded business plans can quickly be swept aside.

"There is still a lot of uncharted territory," says Bob Fryklund, vice president of industry relations at energy consulting firm IHS Inc. in Houston. "People are still trying to understand how this market works."

A few years ago, most people looked at U.S. natural-gas production and saw it entering a slow, terminal decline. But in fact, the opposite has happened. Rising prices and easy financing encouraged a horde of companies to develop "unconventional" gas fields such as the Barnett and Haynesville shales, located, respectively, in north Texas and along the Texas-Louisiana border. These shale wells, once thought to be too costly and difficult to exploit, succeeded beyond everyone's expectations.

"We went through a period of high prices that allowed a higher-priced supply to mature enough that costs have come down," says Jen Snyder, head of North American natural-gas research for Edinburgh-based consultant Wood Mackenzie.
[The Journal Report: Energy]

The unconventional wells are producing more gas with each passing season -- and becoming less expensive to drill. Recently drilled wells in the Haynesville shale are starting off at 24 million cubic feet a day and are profitable even with natural-gas prices as low as $4 per million British thermal units. "Huge," was the succinct appraisal of the Haynesville shale recently by a BMO Capital Markets energy analyst.

This surge of new gas has lowered domestic prices and reduced the need for imports. Meanwhile, companies that bought into the earlier vision of soaring imports and strings of new terminals went from being Wall Street darlings to also rans.
Cheniere's Play

One of these is Houston-based Cheniere Energy Inc. Cheniere Chairman and Chief Executive Charif Souki was an early believer in the future of import terminals. He decided back in 2000 to pursue an aggressive LNG strategy, securing land and permits and building terminals. The plan was to build the entryway for imported gas and charge a fee to anyone who wanted in.

In 2004 and 2005, Cheniere made presentations to Wall Street analysts about how it would build a string of LNG terminals. It held options on land to develop terminals from Alabama all the way down to Brownsville, Texas, on the Mexican border. In some presentations, it used a map that seemed to suggest its terminals would dominate the western half of the Gulf of Mexico.

Investors responded positively to that vision and pushed Cheniere shares, which during 2004 had traded for around $10, to a high of about $44 in 2006.

But Cheniere was preparing for an incoming wave of imported LNG that hasn't arrived. It built the Sabine Pass facility, on the waterway straddling the Texas-Louisiana border, large enough to accommodate one LNG tanker a week. Only three arrived from the time the facility opened last April to the end of 2008. Cheniere's plans to build another LNG terminal in Corpus Christi, Texas, meanwhile, are dormant, as are plans for a terminal in Cameron Parish, La.

The company's miscalculation has hammered the stock. Its shares are trading for less than $5, and the company has struggled with liquidity. Last April, it laid off more than half of its 360 employees in an effort to preserve cash.

"I underestimated price volatility," says Mr. Souki, who adds that he never expected natural-gas prices to rise as quickly as they did from early 2002 to mid-2005 -- the surge that made it profitable for other companies to tap into domestic supplies such as the Barnett and Haynesville shales.
Change in Outlook

The federal government, too, has radically changed its forecasts. In 2006, the Energy Information Administration forecast that LNG imports would reach 6.4 trillion cubic feet in 2025. But in its Annual Energy Outlook released in December, it slashed that to 1.2 trillion cubic feet. Imported natural gas, including pipelines from Canada, made up 16% of U.S. natural-gas consumption in 2007, but is expected to drop to below 3% by 2030.

Last year, a little more than 1% of gas consumed in the U.S. was delivered into the nation's pipeline grid by LNG tankers. Some analysts have begun asking whether LNG import levels will ever rise much above this level. "North America may be out of the loop, may be self-sufficient," says Jim Jensen, a natural-gas consultant in Weston, Mass.

Mr. Souki insists that the situation will improve and that gas prices will moderate at a level favoring imports because of their lower operating costs. "I have not changed my views," he says.

Others believe that more LNG will come to the U.S. this year as well -- but not to make up for domestic shortfalls, as routinely happens with oil.
Dumping Ground?

Instead, North America is becoming a dumping ground for the world's excess natural gas. In 2009, new LNG supplies from Indonesia, Qatar, Russia and Yemen are expected to enter global markets, at a time when a depressed global economy has shrunk demand for fuel. The U.S. Gulf Coast, meanwhile, is perhaps the only region in the world capable of absorbing and storing this enormous excess gas supply.

LNG sellers will first fill up markets in Asia and Europe, which pay top prices. What's left over will likely head to underused terminals in North America. It's "the market of last resort," says Ira Joseph, an LNG analyst with PIRA Energy in New York.

The bad news is that the LNG will arrive at a time when big users, such as the petrochemical and fertilizer industry, are cutting demand, and as even more domestic supply comes from the giant new unconventional wells.

The result: Storage will fill up, and prices could crater.

Some of the overseas LNG may end up entering the U.S. through Sabine Pass. Cheniere sold half of the capacity at Sabine Pass to Total SA and Chevron Corp., global energy giants that wanted to ensure access to U.S. gas markets. But Cheniere kept the other half of the import capacity for itself, in hopes of buying spot cargos and importing the gas itself.

If this flow of LNG does arrive, it will come none too soon for Cheniere, which hasn't turned an annual profit since it first issued stock to the public in 1996. It still owns half of the capacity at Sabine Pass, and unused terminal space doesn't generate revenue. In February 2008, the company needed to borrow to pay off debts and maintain liquidity.

"It was a miserable time to be raising money and a miserable time to be in the LNG business," says Mr. Souki. Accustomed to raising capital for borrowing costs of 7% to 8%, it settled for a $250 million convertible equity deal in August for which it must pay 12% interest.

The $250 million is enough to keep Cheniere afloat for another three years, according to the company. By then, Mr. Souki says he expects to have sold half again of the capacity Cheniere has held onto at Sabine Pass.
—Mr. Gold is a staff reporter for The Wall Street Journal in Austin, Texas.

Write to Russell Gold at russell.gold@wsj.com

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Savannah LNG

http://www.wsav.com/midatlantic/sav/news.apx.-content-articles-SAV-2008-04-30-0021.html

Quoddy Bay

http://elibrary.ferc.gov/idmws/common/downloadOpen.asp?downloadfile=20080425%2D3023%2819153565%29%2Epdf&folder=14670226&fileid=11660717&trial=1