Daily Archives: December 6, 2011
- Obama slams Republican economics (bbc.co.uk)
- Pro-Jihad Obama Opposes Sanctions, Urges US Lawmakers to Go Soft on Iran – Atlas Shrugs (atlasshrugs2000.typepad.com)
- Kansas Republican: Obama giving Kansans ‘a rough ride’ (thehill.com)
- Obama Is Confused Again (markamerica.com)
06 Dec 2011 20:21 GMT
Washington, 6 December (Argus) — US Department of Energy (DOE) will not grant additional licenses to export domestically-produced natural gas to all international markets until completing a review of cumulative economic impacts of liquefaction projects on US markets, a senior agency official said today.
The federal energy regulators appear to be sensitive to political pressure that could arise if LNG exports from the US lift domestic natural gas prices. The agency could reconsider the already granted applications if energy security or other factors are an issue, according to John Anderson, manager of natural gas regulatory activities at DOE’s Office of Fossil Fuels.
Developers have proposed six US liquefaction projects encompassing a total export capacity of 69mn t/yr, or the gas equivalent of 9.5 Bcf/d (269mn m³/d), based on agency records. Cheniere Energy’s proposed 2.2 Bcf/d Sabine Pass liquefaction plant in Louisiana secured DOE permission to export to all international markets in May, following an eight-month review.
But other proposed projects will have to wait until DOE reviews two studies it has commissioned to look into cumulative impacts of liquefaction projects and exports, Anderson said today in Washington, DC, during a briefing hosted by the US Energy Association.
The studies are expected to be completed in the first quarter of 2012, he said.
A study by the Energy Information Administration (EIA) will focus on the effect of LNG exports on domestic prices of natural gas. That EIA study will serve as the basis for analyzing cumulative economic effects of LNG exports that will be conducted by an external contractor.
In addition to cumulative impacts, the agency is looking at adequacy of US natural gas supply, energy security, impact on GDP, balance of trade and other criteria in informing its decision in granting blanket licenses, Anderson said.
A critical factor appears to have been omitted: a project’s commercial viability. Unlike the Federal Energy Regulatory Commission, DOE does not require developers to prove viability, focusing only on analysis of what happens if the terminal is built, Anderson said.
Economic modeling accompanying project applications just assumes that exports are taking place, consultancy ICF International‘s vice president Harry Vidas said during the briefing. ICF prepared the economic analysis that accompanied Cove Point’s application with DOE.
Since commercial viability is not a criterion, projects are effectively considered on the first come-first serve basis. Developers who filed first may secure export licenses and preclude subsequent projects from being realized because of perceived cumulative impact of exports on domestic prices, even if the initial projects are never built.
That scenario is hypothetical, Anderson said, even though it has analogies in the past since only a fraction of proposed US LNG import terminals were built over the past decade.
If economic circumstances change in the future, “we can modify any [export license] order although we respect contract sanctity,” he said.
US laws allow DOE to direct natural gas producers to curtail sales or allocate them to what the federal regulators consider a higher-priority use, according to Anderson.
“We would not want to use [that authority], but we can,” he said.
- USA: Sempra to Pursue Tolling Fee for Cameron LNG Export Scheme (mb50.wordpress.com)
- Canada: Kitimat LNG Wins Export Licence (mb50.wordpress.com)
- USA: Jordan Cove Files for LNG Export Permit (mb50.wordpress.com)
- Shale gas opens door to U.S. LNG exports (energyindependenceforstates.com)
- USA: Societe Generale Says Cheniere Can Make Sabine Pass Export Decision After Fenosa Deal (mb50.wordpress.com)
- LNG Demand East of Suez Expected to Surge (mb50.wordpress.com)
- Lithuania: Cheniere Eyes LNG Exports by 2015 (mb50.wordpress.com)
- Chesapeake CEO Opposes US LNG Exports (mb50.wordpress.com)
- USA: Cheniere, BG Ink LNG Sale and Purchase Deal (mb50.wordpress.com)
We got ourselves a new twist on an old-fashioned bank run! By gum, it’s been a while.
The story notes that since the start of 2010, Greek banks lost nearly 30 percent of their total savings amounts, with September and October seeing a combined loss of 14 billion euros.
Greeks are either living off those savings or sending it out of country.
- Bloodletting begins: anxious Greeks emptying their bank accounts (theextinctionprotocol.wordpress.com)
- How the ECB could be forced to print money (blogs.reuters.com)
- European Bank Runs And Underestimated Physical Gold Demand (citizeneconomists.com)
Yet ‘fracking,’ a crucial part of shale gas extraction, is considered dangerous and many fear its impact on the environment. In the EU, member states are diverging significantly in national policy responses to shale gas regulation.
Where does shale come from? How can you cash-in on the shale boom? Why is fracking so controversial? A report from UK think tank The Global Warming Policy Foundation gives us a quick breakdown of everything you need to know about shale gas market.
- Shell ‘hits shale gas’ in China (mb50.wordpress.com)
- USA: Mitsui Closes Texas Shale Oil/Gas Deal (mb50.wordpress.com)
- Halliburton: Moving Quickly on the Global Shale Boom (mb50.wordpress.com)
- Greece Investigates Shale Gas (mb50.wordpress.com)
- Shale Gas Industry to Support 870,000 Jobs by 2015 (247wallst.com)
They argue that one euro will fall to just $1.20 within the next four months, compared to a current value around $1.34. What’s more, they think this estimate has downside risks.
Their analysis is predicated on a baseline scenario that EU leaders will put stop-gap measures in place in the near-term but will ultimately have to adopt large-scale QE to stave of the crisis in the medium term.
From their investor note:
In our central case, in which the ECB will be forced into a delayed and reactive large-scale QE, risk assets could trade better over time (assuming that the QE amount is sufficient). But it is likely to be seen as a change in the ECB reaction function, and hence we think EUR/USD would trade lower in the medium term. AUD, CAD and EM FX should perform quite well in this scenario.
We also expect ECB QE and although the immediate effect upon announcement of such measures may well be EUR bullish, large-scale monetization is likely to weigh negatively on the EUR in the medium term, hence providing an offsetting force to any USD negativity related to Fed QE3.
- NOMURA: The Euro Is Going To See A MASSIVE Drop In Value In The Next Four Months (businessinsider.com)
- Analysis: ECB’s Failure To Sterilize Bond Buys – Is It QE? (forexlive.com)
- The Pound rallied from a low just above 1.56 against the US Dollar Exchange Rate (torfx.com)
- Complete Summary Of What To Expect From Europe This Week (zerohedge.com)
- ForexLive European wrap: Euro shows a bit of backbone after S&P’s announcement…… (forexlive.com)
- S&P Threatens To Downgrade Euro Rescue Fund Amid Crisis Of ‘Governance’ In Euro Area (businessinsider.com)
Dec. 6, 2011, 10:44 AM by Joe Weisenthal
Today’s geopolitical hotspot?
- Russian election: Thousands call for an end to Putin’s rule in wake of vote (news.nationalpost.com)
- CHART OF THE DAY: The Russian Market Is Getting Reduced To Rubble Today (businessinsider.com)
- Russian opposition members arrested as troops police Moscow after protest over vote ‘rigging’ (news.nationalpost.com)
- Russia deploys troops after anti-Putin rally (windsorstar.com)
- Putin’s party maintains majority, but election marred by allegations of vote manipulation (news.nationalpost.com)
- Thousands protests against Putin after Russia vote (trust.org)
- Russia’s Putin: Less party support inevitable (seattletimes.nwsource.com)
By YASIIN MUGERWA & SHEILA NATURINDA
A group of NRM MPs yesterday boycotted a meeting called by President Museveni at State House, Entebbe to try and convince members to back him on a $2.9 billion (Shs7.3 trillion) oil deal to bring Total-CNOOC into Uganda’s oil industry through a farm-out by Tullow Oil.
Addressing a news conference at parliament independent-minded MPs described their colleagues who went for President Museveni’s meeting as “hypocrites”. Lwemiyaga MP Theodore Ssekikubo, Kampala Central MP Muhammad Nsereko, Vincent Kyamadidi (Rwampara) and Wilfred Niwagaba (Ndorwa East) said they couldn’t be party to a State House meeting that seeks to help the President overthrow Parliament.
“We passed a resolution in Parliament stopping the signing of oil contracts without relevant laws in place,” Mr Niwagaba said. “We were not drunk when we passed this resolution. We had given the government 30 days to table these laws but it’s now two months and they have not acted yet the President wants to sign new contracts.” He added: “We want to warn Oil companies that if they dare sign, Ugandans will not be party to illegal contracts signed with the President because as far as we are concerned Tullow doesn’t have any license.”
In an unprecedented response to what they called “a sinister plot to hijack the independence of Parliament and entrench corruption in the oil sector”, a group of the same legislators in October this year walked out on President Museveni at the party’s stormy Kyankwanzi retreat.
Those who witnessed this drama, this newspaper that the trouble began after the President proposed that the NRM Caucus resolve to overturn the Parliament resolutions on oil that placed a moratorium on executing oil contracts and oil transactions on the Executive until the necessary laws have been passed by Parliament.
The President reportedly argued that the resolutions of Parliament on the matter would affect the $2.9 billion deal to bring Total and CNOOC into Uganda’s oil industry. But sources who attended the Friday NRM Caucus Meeting at State House told Daily Monitor that President told members that Speaker Rebecca Kadaga assured him that the resolution didn’t affect on-going contracts.
But the lawmakers led by Mr Ssekikubo and Abdul Katuntu who was part of the press conference, the chief petitioners in an on-going House inquiry in to the allegations of corruption said the $2.9 billion deal with Total-CNOOC in a farm-out deal will be challenged in courts of law. Kyamadidi and Nsereko accused Tullow of peddling air. The MPs want government to withhold its consent to signing of a deal expected to be concluded as soon as the two parties agree on the tax component.
“Self-indulgence is what is taking place at State House,” Mr Ssekikubo said. “I don’t know what my colleagues have gone to do at State House. If it’s to help the President sign Total-CNOOC deal with Tullow, then they are making a very big mistake. Our position is that Parliament must be respected and the President should wait for the oil laws to be put in place before entering into any contract.”
But Mr Katuntu, an established lawyer said: “Tullow doesn’t not have any legal contract. The Memorandum of Understanding they signed with the government is illegal and should not be a basis for entering into new contracts. It’s up to those companies which want to be hoodwinked to proceed and sign otherwise what the president is trying to do is illegal and unacceptable.”
While the independent-minded NRM MPs boycotted the meeting, majority of the friendly NRM MPs attended the meeting with the President which started at 4pm. Details of the meeting were not readily available by press time. But sources said the President wanted MPs support him on the deal. This was a follow-up meeting to the one at Kyankwanzi meeting which allowed the president to proceed with the deal.
At Kyankawanzi meet, after some MPs walked out on the President, Soroti Municipality MP Mike Mukula moved a motion which was seconded by Mr Alex Ruhunda (Fort Portal Municipality) binding the NRM Caucus to allow the President to proceed with the signing of the $2.9 billion Total-CNOOC farm-out deal with Tullow.
- Soros Plots Museveni’s Coup (mb50.wordpress.com)
- Uganda Halts Oil Deals Amidst Corruption Probe (ibtimes.com)
- (Updated 10-12) Ugandan Parliament Votes to Suspend Oil Deals on Corruption Charges (africommons.wordpress.com)
- Uganda: Minister aims to present oil bills this year (mb50.wordpress.com)
- Accused Uganda ministers resign (bbc.co.uk)
- Uganda struggles to make oil a blessing (marketwatch.com)
- Uganda Welcomes Oil, but Fears Graft It Attracts (nytimes.com)
- Uganda MPs vote to bar oil deals (bbc.co.uk)
- Uganda president snubs call for Tullow deal delay (ibtimes.com)