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Obama’s Indefensible Pipeline Punt

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CARPE DIEM

Professor Mark J. Perry's Blog for Economics and Finance

Some excerpts from Vaclav Smil‘s article in the American.com:

“With a total length of close to 3,000 kilometers, the new [Keystone XL] pipeline would add just over 1 percent to the already existing network of crude oil and refined products lines that crisscross the United States and parts of Canada. Why, if pipeline safety is a key concern, have we not seen waves of civil disobedience focused on more than a quarter million kilometers of existing pipelines?

Long-term statistics show convincingly that there is no safer way to transport large masses of liquids over long distances than a pipeline. Moving the same amount by trucks or rail would be much more risky, in addition to being vastly more expensive. So would be moving the oil from Alberta to British Columbia and then shipping it by tankers via the Panama Canal to Texas.

Here comes the craziest twist: if the opponents of the XL succeed and prevent its construction, there is a strong possibility that Alberta’s oil sand-derived oil will be piped westward to Canada’s Pacific coast and loaded on supertankers going to Asia, to feed China’s grossly inefficient industries.

By preventing the oil flow from Canada, the United States will thus deliberately deprive itself of new manufacturing and construction jobs; it will not slow down the increase of global CO2 emissions from fossil fuel combustion; it will almost certainly empower China; and it will make itself strategically even more vulnerable by becoming further dependent on declining, unstable, and contested overseas crude oil supplies. That is what is called a spherically perfect decision, because no matter from which angle you look at it, it looks perfectly the same: wrong.”

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Polarcus Alima: First Seismic Vessel to Pass along Northern Sea Route

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Polarcus Limited announced today that the Company’s ultra-modern 12-streamer 3D seismic vessel, POLARCUS ALIMA, has achieved a significant first in the seismic industry, having successfully transited to Asia-Pacific via the Northern Sea Route (NSR).

Her passage commenced on 15 September from Hammerfest in Norway after completion of seismic operations in the Barents Sea, taking her on a 3,000 nautical mile route along the northern coast of Russia to Cape Dezhnev in the Bering Straits.

The voyage was completed in just nine days. After passing the Bering Straits on 24 September POLARCUS ALIMA is presently continuing her onward passage to New Zealand to commence operations expected to run for up to 7 months in total. The voyage was made possible in part due to the vessel’s Arctic-ready capabilities, a unique feature of the Polarcus fleet in the seismic industry. Under the Russian Federation’s 1990 Regulations for Navigation on the Seaways of the Northern Sea Route, vessels making the passage are required to hold an ICE-1A or higher ice class.

The expected time savings in transit between Norway and New Zealand compared to the traditional route through the Panama Canal amounts to some eight days. The savings versus the Suez Canal, a necessity for some larger seismic vessels, amounts to thirteen days. The passage via the NSR therefore presents significant time-related benefits for Polarcus and its clients.

This is the first known passage of a 3D seismic vessel along the Northern Sea Route. Preparations for the voyage were carried out in close cooperation with Tschudi Arctic Transit AS through its Russian – Norwegian JV company Arctic Bulk AG, Atomflot, and the Northern Sea Route Administration in Moscow.

Commenting on the successful transit Rolf Rønningen, CEO Polarcus, said: “The successful navigation of Polarcus Alima along the Northern Sea Route has been achieved through the dedication and hard work of our in-house operations personnel, the Northern Sea Route Administration, and our crew onboard the seismic vessel. The result of this outstanding teamwork has been to achieve significant savings in fuel, emissions, and most significantly time during a milestone transit that effectively provides Polarcus a viable new sea bridge between two important operational markets.”

Original Article

Japan hopes to buy LNG from U.S. by 2015

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Wed Sep 14, 2011 10:43am GMT

* Japan demand for LNG to stay strong after Fukushima crisis

* Japan LNG imports rise to record in August

* Japan eyes initial annual imports of 2-3 mln tonnes/yr-Nikkei

TOKYO, Sept 14 (Reuters) – Japan hopes to start buying liquefied natural gas from the United States after a project there starts exporting LNG in 2015, as the country looks to secure a steady supply amid growing demand for the fuel, a trade ministry official said on Wednesday.

Japan’s demand for natural gas is expected to rise for years to come, with its LNG imports climbing at a record pace this year as utilities ramp up gas-fired generation to offset a drop in nuclear utilisation following the Fukushima crisis.

Seishu Makino, a senior vice trade minister, met with U.S. Energy Secretary Steven Chu on Tuesday and requested approval for imports by Japanese firms.

“Japan conveyed the expectation that exports of LNG from the United States to Japan can contribute to a stable supply, to which the U.S. expressed a certain understanding,” the official told reporters.

The official said one project, the Sabine Pass terminal, has won approval to export LNG and is expected to start production and exports in 2015. Two other projects are now seeking approval. One of them is the Freeport LNG receiving and regasification terminal, in which Japan’s No. 2 natural gas distributor Osaka Gas Co has a stake.

The official declined to give an outlook for how much Japan LNG would like to import from the U.S.

The Nikkei business daily reported on Wednesday that Japanese power and gas utilities would initially import 2 million to 3 million tonnes of LNG a year, while the trade ministry estimates U.S. shipments could eventually make up 10 percent of Japan’s LNG imports.

Gas extracted from shale rock formations will be liquefied in Texas and Louisiana. The LNG will then be shipped to Japan via the Panama Canal, the Nikkei said.

Some Japanese companies have expressed hopes for U.S. exports of LNG.

Osaka Gas sees the United States as a promising shale gas exporter.

“Japan can be a destination when an expansion of the Panama Canal in 2014 allows large LNG carriers to get through the canal,” Kenji Kawamoto, an executive officer in charge of overseas business development at Osaka Gas, told Reuters last week.

Sumitomo Corp , Japan’s third-largest trading firm, is eyeing more upstream investment opportunities in U.S. shale gas and is looking to pick up shale oil assets there, as it sees those markets growing, a senior official told Reuters in July.

The Sumitomo official said obstacles to exporting U.S. shale gas, such as U.S. export regulations and the cost of establishing facilities to liquefy gas for export, could be reduced as some U.S. LNG import facilities are looking to become export facilities to sell surplus gas supplies.

Mounting public concerns over nuclear safety after the Fukushima Daiichi radiation crisis have made it difficult since the March 11 earthquake to restart reactors once they shut for routine maintenance, forcing utilities to tap fossil fuels to make up for lost nuclear power generation.

Japan’s 10 regional power firms used a record 4.81 million tonnes of liquefied natural gas in August to help offset a record low nuclear utilisation rate.

LNG imports this year are set to jump 12.2 percent to 78.6 million tonnes, exceeding the record of 70 million tonnes in 2010.

Japan’s top three sources of LNG imports are Malaysia, Australia and Indonesia, although it recently resumed imports of LNG from Norway for the first time since 2008.

© Thomson Reuters 2011 All rights reserved

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