The Energy Department’s delay in releasing a report on liquefied natural-gas exports puts in limbo for this year as many as 12 applications including projects backed by Dominion Resources Inc. and Sempra Energy. (SRE)
The department commissioned the study last year to assess the economic impact of exports on domestic energy use after granting Cheniere Energy Inc. (LNG) permission to ship gas from Louisiana. It said future permits won’t be issued until the study is completed.
The first part of the study is complete, and a second portion was scheduled to come out in the first quarter. That date was pushed back to late in the U.S. summer, which ends Sept. 22. A posting on the department website now says it will be “complete by the end of the year.”
“It is really unfortunate, but I don’t think anything happens until we see the results of that report,” said Bill Cooper, president of the Center for Liquefied Natural Gas, which advocates for gas shipments. The Washington-based group includes LNG producers, shippers and terminal operators.
“None of the applicants, I’m certain, want to see a delay in the regulatory process,” Cooper said in an interview.
The study was started after lawmakers led by Representative Edward Markey, a Massachusetts Democrat, and Senator Ron Wyden, an Oregon Democrat, said overseas sales might increase domestic energy prices.
The delay probably will push release of the Energy Department’s report until after the election in November.
“This is a complicated economic analysis assessing a dynamic market,” Jen Stutsman, an Energy Department spokeswoman, said in an e-mail. “We take our responsibility to issue these determinations seriously and want to make sure the necessary time is taken to get it right.”
Investors including Sempra Energy in partnership with Mitsubishi Corp. and Mitsui & Co. Ltd., Freeport LNG with Macquarie Group Ltd., and Dominion Resources, have applied for approvals from the Energy Department.
U.S. permits are required to sell gas to countries that aren’t free-trade partners with the U.S., a group that includes Japan and Spain.
As natural-gas prices soared in the last decade, energy companies sought permission to build import terminals. Hydraulic fracturing, or fracking, for natural gas has opened access to reserves that previously couldn’t be produced economically, driving prices to a decade low and letting companies shift gears and seek overseas buyers for the fuel.
In fracking, oil and gas companies shoot a mixture of water, sand and chemicals underground to crack shale rock formations and free fossil fuels trapped inside.
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A previous legal settlement dating to the 1970s gives the Sierra Club the ability to reject any significant changes to the purpose or footprint of the existing natural gas terminal in Cove Point,
The environmental group says the export project could result in major damage to the Chesapeake Bay and nearby Calvert Cliffs State Park in Maryland.
Dominion says the Cove Point terminal is well-situated to export gas from the prolific Marcellus Shale region, which lies beneath Pennsylvania, New York, West Virginia, Ohio and other states.
“The damage that this project would bring to the Maryland coast as well as the disastrous effects of the fracking boom on communities in states like Pennsylvania make it clear that exporting liquefied natural gas is bad news for Americans’ air, water and health,” said Michael Brune, executive director of the
Exporting liquefied natural gas, or LNG, would drive up the cost of domestic natural gas, Brune said, reversing the effects of a natural gas boom that has driven U.S. prices to 10-year lows.
Thomas F. Farrell II, president and CEO of Dominion Resources, said the company intends to go forward with the project.
“We have reviewed the various regulations, agreements and rulings from various regulatory bodies governing the site and are confident that we will be able to locate, construct and operate a liquefaction facility at Cove Point,” Farrell told reporters.
Dominion will design the plant to minimize damage to the environment, Farrell said.
The dispute over the Maryland plant comes as federal regulators have approved the first large-scale natural gas export facility in the United States.
The Federal Energy Regulatory Commission cleared construction of the Sabine Pass LNG terminal in Cameron Parish, La., last week. The facility, owned by Houston-based Cheniere Energy Inc., will chill natural gas into a liquid that can be shipped on tankers, allowing U.S. producers to export natural gas overseas for potentially huge profits. An existing LNG import facility at the Louisiana site will be converted also to handle imports.
The push for exports represents a turnaround from just a few years ago, when U.S. companies were seeking to build LNG terminals that would receive natural gas from other countries.
Those plans changed as improved drilling techniques, such as hydraulic fracturing and horizontal drilling, allowed drillers to gain access to natural gas wells that were hard to reach in the past.
Hydraulic fracturing, also called fracking, involves blasting mixtures of water, sand and chemicals deep underground to stimulate the release of gas. It is often combined with horizontal drilling, which can increase production far beyond a vertically drilled well.
Brune, of the Sierra Club, called on the Energy Department to review potential dangers of fracking. No federal agency has fully analyzed or disclosed such dangers to the public, he said.
Gas companies say fracking has been used safely for decades.
(Copyright 2012 by The Associated Press. All Rights Reserved.)Source
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As reported by the Associated Press, the potential of the project, aimed at developing wind turbines in the U.S., situated off the Virginia cost and encompassing circa 113,000 acres in the Atlantic Ocean, has been recognized by numerous investors including European ones.
The federal Bureau of Ocean Energy Management, in charge of supervising offshore wind development, published the names of companies that submitted the necessary documentation in order to be eligible for project implementation, those being:
Arcadia Offshore Virginia LLC, New Jersey based branch of Arcadia Windpower, Cirrus Wind Energy Inc., based in Nevada; enXco Development Corp., based in California; Fishermen’s Energy LLC, based in New Jersey; Iberdrola Renewables Inc., an American subsidiary of a Spanish company with offices on the West and East coasts; Orisol Energy US Inc., another Spanish offshoot with American offices in Michigan; Apex Virginia; and Dominion Resources.
The paperwork will be scrutinized by the government regulators, in order to determine what company meets the technical and economic prerequisites in order to be able to push forward with the project implementation.
On March 27, Virginia regulators gave their consent to what might be the first offshore wind turbine built in the United States. Even though the prototype turbine still awaits approval of the U.S. Coast Guard and Army Corps of Engineers, it is said that it will be located in Chesapeake Bay and be able to meet the power needs of 1,250 households. The capacity of the wind turbine will equal to 5 megawatts of electricity and it should be ready for production by the end of 2013.
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- Dominion interested in Va offshore wind generation (mysanantonio.com)
Japan’s Osaka Gas is in negotiations to buy liquefied natural gas from Dominion Resources, Sempra Energy and Freeport LNG in the United States, Bloomberg reported, citing Tetsushi Ikuta, general manager of Osaka Gas energy resources and international business development.
Osaka Gas said recently that it plans to purchase 7.19 million mt of LNG during fiscal 2012.
The company also plans to invest 290 billion yen (3.49 billion U.S. dollars) in LNG storage facilities and laying pipelines in five years from fiscal 2012-2016.
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