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Cheniere sees summer application for Corpus plant

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NEW ORLEANS, March 27 | Tue Mar 27, 2012 3:56pm EDT

(Reuters) – Cheniere Energy Inc plans to file a formal application in July or August to build a second liquefied natural gas export plant on the U.S. Gulf Coast, the company’s chief executive officer told investors on Tuesday.

The Houston-based LNG developer said in December it plans to build the export plant at Corpus Christi in Texas, originally the site for a planned import terminal, but it will need to file for approval first.

“We expect it to be some time in July or August,” Charif Souki, Cheniere’s CEO, said at the Howard Weil energy conference.

The plant, which would have the capacity to export 1.8 billion cubic feet of gas per day, could be online by 2017, assuming permits are granted by mid-2013, the filing said.

Cheniere has signed long-term supply agreements with international buyers for its first proposed plant at Sabine Pass in Louisiana, which is expected to start up in 2015, pending regulatory approval.

Once expected to be a major importer, the United States now has up to a century’s worth of natural gas supply, prompting plans to ship the cheap fuel to thirsty markets in Europe and Asia where prices are up to five times higher.

Corpus Christi would comprise three production trains, or units, all with the capacity to export 4.5 million tonnes per year of LNG.

Japan: Osaka Gas Eyes U.S. LNG

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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.

He said that Osaka Gas may invest in planned LNG terminals in Maryland, Louisiana and Texas.

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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Now Obama Wants To Build A $5 Billion Bullet Train From Las Vegas To Nowhere

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Michael Blood, AP | Mar. 25, 2012, 4:14 PM

VICTORVILLE, Calif. (AP) — On a dusty, rock-strewn expanse at the edge of the Mojave Desert, a company linked to Senate Majority Leader Harry Reid wants to build a bullet train that would rocket tourists from the middle of nowhere to the gambling palaces of Las Vegas.

Privately held DesertXpress is on the verge of landing a $4.9 billion loan from the Obama administration to build the 150 mph train, which could be a lifeline for a region devastated by the housing crash or a crap shoot for taxpayers weary of Washington spending.

The vast park-and-ride project hinges on the untested idea that car-loving Californians will drive about 100 miles from the Los Angeles area, pull off busy Interstate 15 and board a train for the final leg to the famous Strip.

Planners imagine that millions of travelers a year will one day flock to a station outside down-on-its-luck Victorville, a small city where shuttered storefronts pock the historic downtown.

An alliance of business and political rainmakers from The Strip to Capitol Hill is backing the project that could become the first high-speed system to break ground under President Barack Obama’s push to modernize the U.S. rail network – and give the Democratic president’s re-election prospects a lift in battleground Nevada.

Transportation Secretary Ray LaHood has publicly blessed the train – it means jobs, he says – and it’s cleared several regulatory hurdles in Washington.

Yet even as the Federal Railroad Administration considers awarding what would be, by far, the largest loan of its type, its own research warns it’s difficult to predict how many people will ride the train, a critical measure of financial survival, an Associated Press review found.

There are other skeptics, as well.

“It’s insanity,” says Thomas Finkbiner of the Intermodal Transportation Institute at the University of Denver. “People won’t drive to a train to go someplace. If you are going to drive, why not drive all the way and leave when you want?”

Construction cost projections have soared to as much as $6.5 billion, not including interest on the loan. Some fear taxpayer subsidies are inevitable.

Reid and other supporters point to research that shows 80,000 new jobs, but FRA documents show virtually all those would be temporary – no more than 722 would be permanent.

Victorville Mayor Ryan McEachron envisions a bustling transportation oasis with a hotel, restaurants, maybe even homes, on the proposed station site. He believes drivers can be enticed out of their cars, even in a region where the notion of rail travel can seem as distant as a New York subway.

The company is “going to have to market and market hard in order to get the ridership they need to support paying back the loan,” the mayor says. “I think you can change the thinking.”

Along with Reid, the president’s most influential Democratic ally in Congress, the plan is being advanced by casino developer and contractor Anthony Marnell II, whose credits include building the Bellagio and Wynn Las Vegas and who heads Marnell Companies, the majority shareholder in DesertXpress; project consultant Sig Rogich, a Republican adviser to two presidential campaigns who founded Nevada’s most influential lobbying and advertising company; and Canadian transportation giant Bombardier, a DesertXpress strategic adviser that wants to supply its rail cars.

A decision on the loan is not expected until mid-year, but the company has spent some $30 million sharpening its plan and refining ridership projections. Rising gas prices and increasing traffic congestion could help ticket sales, and the company is touting reduced air pollution from fewer cars on the road.

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“It’s Victorville that makes the project work,” says chief executive Andrew Mack.

Far from being a train from nowhere, company planners see the struggling city of 115,000, once a stop on storied Route 66, as a collection point for millions of drivers heading north to Las Vegas. Bringing the line deeper into the populous Los Angeles area would raise formidable challenges, Mack said, from crossing numerous freeways to finding space for track.

The lot now stippled with spindly creosote bushes has room for 15,000 parking spaces. Bags would be checked through to hotel rooms. At peak hours, trains would depart every 20 minutes. Mack says an average round-trip fare could be as low as $75, though documents estimate $100.

Mack says the train will deliver convenience – and for a price, luxury – that studies show passengers want.

DesertXpress officials once boasted they would build the line with private dollars, but they now plan to rely on FRA financing to cover the bulk of the cost. Mack didn’t directly answer if the company turned to the FRA because private investors were unwilling to take the risk, but said the loan terms are attractive.

“When somebody comes and tells me I will build a system that pays for itself, I’m suspicious,” said Hasan Ikhrata, executive director of the Southern California Association of Governments, which questioned ridership potential in a report last year. “There is no high-speed rail system in the world that operates without subsidies.”

The company is still arranging as much as $1.6 billion needed to cover its share of the construction bill for the roughly 200-mile line. Investments could hinge on the loan approval, which requires the company to convince the FRA that taxpayers won’t get stiffed. In a worst-case scenario, the train would become government property if the company fails.

The low-interest loan would be about three times the combined amount the FRA loaned 32 other projects through the Railroad Rehabilitation & Improvement Financing program since its inception in 2002.

If successful, the train could be a forerunner in a national high-speed rail network, while bringing a rich return for investors and delivering visitors to Vegas. It would also give Nevada residents an option to Southern California, albeit many miles from tourist hotspots like Hollywood or the beaches.

The company is seeking funds at a time when a proposed high-speed train running from San Francisco to Southern California has been questioned because of ballooning costs and fear it will sap taxpayer dollars.

Early company research projected the train would lure away nearly one in four car, bus and airline travelers, initially about 4 million people annually. The company now pegs first-year ridership at about 3 million, but that projection was trimmed to 2.5 million by government analysts who urged more study.

The risks are summarized in a 2007 study commissioned by ACS Infrastructure North America, a division of a global construction company that DesertXpress says is seeking a role in the project, that found most travelers were “broadly happy” going to Las Vegas by car or airline. While most travelers would be open to riding a train, the report warned the company would need to lure riders with pampering.

On clear roads, the 270-mile drive from downtown Los Angeles to Las Vegas takes about four hours. Planners say the train ride from Victorville to Las Vegas would take about 80 minutes, but it’s debatable how much time would be saved after parking, boarding the train and reaching a Las Vegas hotel.

Round-trip flights from Los Angeles to Las Vegas can be booked for under $100.

The dream of uniting Southern California and Las Vegas by high-speed rail has been discussed for decades. In the mid-1980s, Las Vegas officials predicted a line would be running by 2000. DesertXpress, which would roughly parallel Interstate-15 on a pair of new tracks, has predicted for several years that it would soon break ground.

Reid initially backed a rival project that planned to use magnetic power to reach Orange County, but he jumped trains shortly after Rogich became co-chair of Republicans for Reid, a Nevada group with ties to the gambling industry that helped Reid win re-election in 2010.

The senator’s office disputes any connection between his flip and Rogich’s involvement in the campaign. Spokeswoman Kristen Orthman says Reid’s decision was based on the viability of DesertXpress, while the magnetically powered project languished.

Marnell, another member of Republicans for Reid, is president of one of several companies under the DesertXpress corporate banner. He and his son, M Resort, Spa and Casino President Anthony Marnell III, are also investors.

Federal records show the elder Marnell has donated at least $15,000 to political committees connected to Reid since 2010, including a $5,000 donation in May to the senator’s Searchlight Leadership Fund.

According to federal records, the company has spent at least $270,000 since 2006 lobbying at the House, Senate and federal offices.

Other investors include North Dakota businessman Gary Tharaldson, who donated $10,000 to a Reid committee in March, and transportation expert Tom Stone, who organized DesertXpress with partner Mack in 2005.

Nevada records show DesertXpress HRS Corp., headed by the elder Marnell with his son as a director, was authorized to issue 25,000 shares of stock. DesertXpress declined to say who held those shares, if issued, and in what amounts.

Not everyone in the high desert is on board with the project.

Thirty miles northeast of Victorville on I-15, officials in Barstow fear they’ll lose 2,300 jobs. The impact will be “unsustainable,” Mayor Joe Gomez wrote to LaHood in October 2010, according to a letter released under a public records request.

To appease those concerns, McEachron said the station’s proposed location was moved about halfway to Barstow. The patch of vacant land is so remote the city would have to annex it.

Related Articles:

U.S. Department of Transportation – Countdown to DesertXpress begins

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Obama Just Doesn’t Get It When It Comes to Business

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By Gary Shapiro
Published November 25, 2011
FoxNews.com

When it comes to the business community, the White House may feel like an abused partner in a bad marriage. President Obama likely believes that he keeps giving business what it wants yet gets nothing but complaints and unemployed Americans in return.

His gift giving began with the stimulus package, full of goodies for the preferred businesses. It continued with the auto bailout, payroll tax holidays, accelerated depreciation, “cash for clunkers,” first-time homebuyers credit, and even the extension of the Bush tax cuts.

In fact, Obama even created an Economic Advisory Recovery Board chaired by GE’s Jeff Immelt whose purpose is to report to the White House on ways to improve the economy. The board was created in 2009, nearly three years ago.

The president speaks passionately about entrepreneurs and innovation all the time. He continually addresses the need for economic-friendly policies, like more spectrum for wireless broadband. On the surface, the relationship between major business leaders and the White House seems quite cozy and comfortable.

Yet, the economy continues to stagnate and unemployment remains above nine percent. Adding salt to the wound, business owners and executives, including many former Obama supporters, seem likely to support the Republican candidate next November.

Indeed, more and more business leaders are speaking out against the president. The dam broke in mid-2010 when then-Business Roundtable Chairman and Verizon CEO Ivan Seidenberg said that the Obama administration was creating “an increasingly hostile environment for investment and job creation.”

Earlier this year, Steve Wynn, the billionaire head of Wynn Resorts and a Democrat, said that “the business community in this country is frightened to death of the weird political philosophy of the President of the United States.”

Now public criticism is common. Just this month a poll in Chief Executive magazine concluded that 85 percent of CEOs rank Obama’s performance as “weak” or “poor,” with one CEO saying, “The current administration is so anti-business, we don’t plan on any expansion until we have a new president.  We just hope we’ll be around to see that day.”

Why the disconnect?

Business is not just big companies. Smaller companies dominate America. Entrepreneurs create almost all the new jobs. As I recount in my book, “The Comeback: How Innovation Will Restore the American Dream,” a 2010 Kauffman Foundation study found that “without startups, there would be no net job growth in the U.S. economy.”

Yet small businesses have gotten little access or attention in this White House. The White House appears oblivious to the psychological impact of GE heading the committee that advises the president on how to create jobs. GE is so big and reliant on government contracts that its problems and challenges are not shared by most American businesses.

Moreover, the federal government is hurting business and job creation as it increases the regulatory burden.

Making a payroll means dealing with new taxes, health care mandates and the cost of new regulations. To compensate for the added burden, businesses must hire scores of accountants and lawyers to decipher and follow all the new rules. Washington has shifted from occasionally helpful to downright destructive of business interests.

Anti-business actions, proposals and rhetoric make it worse.  Frequent talk of “spreading the wealth around,” “corporate greed” and new tax proposals all discourage investment and job creation.

Closing Boeing’s new South Carolina factory, raiding Gibson Guitars for violating an ambiguous law in another country, and changing unionization rules to allow sudden union formation all force companies to invest and hire overseas. Encouraging hostility to business by embracing the Occupy Wall Street protesters only makes matters worse.

Results must match rhetoric. President Obama excited the business community when he promised to double exports in five years. Yet it took almost three years to simply get three Bush-era trade deals signed and no other deals have been made to promote exports and trade.

Nothing has been done on repatriation of corporate profits, lowering our absurdly high corporate taxes or shifting our educational system to train Americans for the 3.4 million jobs that are open. While college-educated, liberal arts majors protest in American cities, jobs for engineers, technicians and skilled machine operators go unfilled.

President Obama and his advisors have scant business, managerial or leadership experience. The president has relied on personality and oratory and the Democrats in Congress to lead. He created a Deficit Reduction Commission and ignored its bipartisan recommendations, which led directly to a Congressional stalemate over our debt ceiling. Obama also blew off Rep. Paul Ryan’s good faith effort to address skyrocketing Medicare costs and tried to make it an election issue.

It might be a big mystery to the president and his advisers why business spurns their advances. But it isn’t a mystery to anyone in business. Businesses are not hiring and this anti-business government is at least partially responsible.

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA), the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times bestselling book, “The Comeback: How Innovation Will Restore the American Dream.”

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Cuba drills for oil, but U.S. unprepared for spill

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By William Booth, Published: March 1

As energy companies from Spain, Russia and Malaysia line up to drill for oil in Cuban waters 60 miles from the Florida Keys, U.S. agencies are struggling to cobble together emergency plans to protect fragile reefs, sandy beaches and a multibillion-dollar tourism industry in the event of a spill.

Drawing up contingency plans to confront a possible spill is much more difficult because of the economic embargo against Cuba. U.S. law bars most American companies — including oil services and spill containment contractors — from conducting business with the communist island. The embargo, now entering its 50th year, also limits direct government-to-government talks.

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“We need to figure out what we can do to inflict maximum pain, maximum punishment, to bleed Repsol of whatever resources they may have if there’s a potential for a spill that would affect the U.S. coast,” Rep. David Rivera (R-Fla.) told in January a congressional subcommittee that oversees the U.S. Coast Guard.

An unusual coalition of U.S. environmentalists and oil industry executives have joined forces to push the White House to treat the threat of a spill seriously, while tamping down the anti-Castro rhetoric.

“There is no point in opposing drilling in Cuba. They are drilling. And so now we should be working together to prevent disaster,” said Daniel Whittle, Cuba program director of the Environmental Defense Fund, who has been brokering meetings between Cuban and U.S. officials.

Environmentalists applauded the announcement last week of an agreement between the United States and Mexico to allow for joint inspection of rigs operating in the Gulf of Mexico and the establishment of a common set of safety protocols between the two countries.

Nothing approaching this exists with the Cubans.

Because of the embargo, the talks between Cubans, Repsol and the Coast Guard are taking place in the Bahamas and Curacao — not Havana or Miami — under the auspices of the U.N. International Maritime Organization, paid for by charitable donations from environmental groups and oil industry associations.

A single Florida company is licensed to deliver oil dispersants to Havana. But there are no U.S. aircraft with contracts or permission to fly over Cuban waters. The current plan is to retrofit and deploy aging crop dusters from Cuban farms to dump the dispersants.

Obstacles to a cleanup

Repsol operates leases in U.S. waters in the Gulf of Mexico and has a staff of 300 based in Houston. But because of the embargo, none of the Houston staff is permitted to have anything to do with the Repsol operation in Cuba. Any assistance would have to come from Madrid.

Because of the embargo, and to protect Repsol from economic sanctions, no more than 10 percent of the components on the Scarabeo 9 drilling rig may be manufactured in the United States.

One of those components is the blowout preventer, a vital piece of safety equipment manufactured by National Oilwell Varco in Houston — whose employees cannot service the equipment while it is in Cuban waters.

If a blowout occurred, Repsol would have to await delivery of a capping stack, which would have to travel from Scotland to Cuba and then out to the rig. Experts predict it would take a week at minimum.

Cleanup crews arriving from the United States would be allowed to skim oil from the water and collect surplus oil gushing from the rig, but they’d have to take it someplace. The question is where? The U.S. tankers can’t enter Cuban territorial waters, and if they do, they are prohibited from returning to the United States for six months. The recovered oil would belong to Cuba, and so it can’t travel to the United States.

Modeling of ocean currents by the USGS suggests a spill at the Repsol exploratory well site probably would not affect the Florida Keys but would be swept north by the powerful flow of the Gulf Stream and then begin to deposit oil on beaches from Miami to North Carolina.

“If anything went really wrong out there, I believe there would be a quick political response,” said William K. Reilly, co-chairman of the national commission on the Deepwater spill and head of the Environmental Protection Agency under President George H.W. Bush.

But a lot can happen in a couple of days, Reilly said. “It’s time to face reality. It is, completely, in the interest of the United States that we get this right.”

“This is a disaster waiting to happen, and the Obama administration has abdicated its role in protecting our environment and national security by allowing this plan to move forward,” said Rep. Ileana Ros-Lehtinen (R-Fla.), chairman of the House Foreign Affairs Committee.

Ros-Lehtinen and her colleagues sponsored legislation to deny visas to anyone who helps the Cubans advance their oil drilling plans. They have also sought to punish Repsol.

“We need to figure out what we can do to inflict maximum pain, maximum punishment, to bleed Repsol of whatever resources they may have if there’s a potential for a spill that would affect the U.S. coast,” Rep. David Rivera (R-Fla.) told in January a congressional subcommittee that oversees the U.S. Coast Guard.

An unusual coalition of U.S. environmentalists and oil industry executives have joined forces to push the White House to treat the threat of a spill seriously, while tamping down the anti-Castro rhetoric.

“There is no point in opposing drilling in Cuba. They are drilling. And so now we should be working together to prevent disaster,” said Daniel Whittle, Cuba program director of the Environmental Defense Fund, who has been brokering meetings between Cuban and U.S. officials.

Environmentalists applauded the announcement last week of an agreement between the United States and Mexico to allow for joint inspection of rigs operating in the Gulf of Mexico and the establishment of a common set of safety protocols between the two countries.

Nothing approaching this exists with the Cubans.

Because of the embargo, the talks between Cubans, Repsol and the Coast Guard are taking place in the Bahamas and Curacao — not Havana or Miami — under the auspices of the U.N. International Maritime Organization, paid for by charitable donations from environmental groups and oil industry associations.

A single Florida company is licensed to deliver oil dispersants to Havana. But there are no U.S. aircraft with contracts or permission to fly over Cuban waters. The current plan is to retrofit and deploy aging crop dusters from Cuban farms to dump the dispersants.

Obstacles to a cleanup

Repsol operates leases in U.S. waters in the Gulf of Mexico and has a staff of 300 based in Houston. But because of the embargo, none of the Houston staff is permitted to have anything to do with the Repsol operation in Cuba. Any assistance would have to come from Madrid.

Because of the embargo, and to protect Repsol from economic sanctions, no more than 10 percent of the components on the Scarabeo 9 drilling rig may be manufactured in the United States.

One of those components is the blowout preventer, a vital piece of safety equipment manufactured by National Oilwell Varco in Houston — whose employees cannot service the equipment while it is in Cuban waters.

If a blowout occurred, Repsol would have to await delivery of a capping stack, which would have to travel from Scotland to Cuba and then out to the rig. Experts predict it would take a week at minimum.

Cleanup crews arriving from the United States would be allowed to skim oil from the water and collect surplus oil gushing from the rig, but they’d have to take it someplace. The question is where? The U.S. tankers can’t enter Cuban territorial waters, and if they do, they are prohibited from returning to the United States for six months. The recovered oil would belong to Cuba, and so it can’t travel to the United States.

Modeling of ocean currents by the USGS suggests a spill at the Repsol exploratory well site probably would not affect the Florida Keys but would be swept north by the powerful flow of the Gulf Stream and then begin to deposit oil on beaches from Miami to North Carolina.

“If anything went really wrong out there, I believe there would be a quick political response,” said William K. Reilly, co-chairman of the national commission on the Deepwater spill and head of the Environmental Protection Agency under President George H.W. Bush.

But a lot can happen in a couple of days, Reilly said. “It’s time to face reality. It is, completely, in the interest of the United States that we get this right.”

Source

Countdown to DesertXpress begins

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March 28, 2011

States and regions across the country are working tirelessly to realize President Obama’s vision for American high-speed rail.  And on Friday, I had the pleasure of joining Nevada Senator Harry Reid to announce that construction on the DesertXpress corridor between Las Vegas and Southern California will soon get underway.

The DesertXpress project cleared a major hurdle last Friday when the Federal Railroad Administration released its final environmental impact statement.

DesertXpress promises travel times of 85 minutes between Victorville, California, and Las Vegas, Nevada.  This cuts the existing drive–three hours under the best conditions and nearly twice as long in traffic–in half.  Sitting in congestion for four, five and even six hours along I-15 is especially brutal for travelers paying sky high gas prices.

But high-speed rail means much more than a shorter trip from California to Las Vegas.  It means jobs, and it means reinvigorated American manufacturing.

Already, 30 rail companies from around the world have pledged that, if they’re selected for high-speed rail contracts, they will hire American workers and expand their bases of operations in the United States.  And the administration’s 100 percent “Buy America” requirement will generate a powerful ripple effect throughout the supply chain.

Just think about the possibility.  Factory workers building electric-powered trains.  Engineers laying new track.  Conductors, operators and ticket-takers helping passengers speed to their destinations.  Americans of every trade advancing down the track to a better future.

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With US Senator Harry Reid and Nevada Department of Transportation Director Susan Martinovich

And those are just the direct ripple-effects.  High-speed rail also means economic development.  As Nevada Senator Harry Reid said:

“This announcement brings us one small step away from tens of thousands of new jobs not only through the project’s construction, but by boosting our tourism.  This line will connect tourists from southern California to our state’s great attractions like the Las Vegas Strip and the Hoover Dam. This announcement is excellent news for our state’s economic recovery.”

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With US Senator Harry Reid announcing the DesertXpress EIS release

DesertXpress will give people a safe, convenient transportation alternative to the notoriously congested I-15.   And in a time of enormous economic challenge, it will create quality jobs.

This is the promise high-speed rail offers communities across the country.  This is how America wins the future.

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