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Unpacking the Shale Gas LNG Export Boom

Steve Horn
NationofChange / News Analysis
Published: Monday 2 April 2012
All this comes in the aftermath of the “jobs creation,” “clean natural gas” and “bridge fuel” mythology exposed as a trio of shams of epic proportions.
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While the North American shale gas boom continues full-steam ahead, so too does another boom receiving less of the spotlight: the LNG export boom.

LNG, shorthand for liquefied natural gas, is gas that's been condensed into a liquid form by chilling it to approximately −162 °C (−260 °F). That gas is placed in LNG tankers, also known as "trains," then shipped off to lucrative global markets.

One LNG export terminal — Cheniere's Sabine Pass LNG export terminal, located in Sabine Pass, Louisiana — has already received a federal permit from the U.S. Department of Energy (DOE). It is awaiting an obligatory rubber stamp from the U.S. Federal Energy Regulatory Commission (FERC).

Many other LNG export terminals are also in the works, with many new key pieces of the puzzle unfolding in the past week. Thus, a lengthy primer, starting in northwest North America and eventually, meandering southward toward Texas, Louisiana and Georgia, and then eventually heading northeast, is necessary to put the LNG export boom into a proper context.

A lesson in North American LNG export terminals is, in actuality, a lesson in the entire geography of the North American unconventional oil and gas infrastructure put on the map, so to speak, by the documentary film, “Gasland.”

 Alaska

The state of Alaska recently made game-changing announcement for the oil and gas industry.

Prudhoe Bay, a port located in the Northern Slope area of Alaska — rather than serve merely as the beginning-point of a TransCanada tar sands pipeline, the Alaska Pipeline Project, which would have originated there and eventually ended up feeding into Alberta, Canada — will also serve as the end-point of a series of inter-Alaska pipelines running from Point Thomson oil and gas field, which is located roughly 60 miles east of Prudhoe Bay. 

These pipelines will carry natural gas to an LNG export terminal in Prudhoe Bay, which will then feed a hungry Asian market with this lucrative prize. Reuters explained, "Exxon and partners BP and ConocoPhillips have agreed to build a pipeline from the field to deliver 70,000 barrels per day of liquids into the Trans Alaska Pipeline System." 

The oil and gas industry, it seems, got the sweetest of sweetheart deals in this Faustian bargain with the Alaska state government this time around the block.

TransCanada Corporation (yes, that TransCanada) also won a license to ship much of the oil and gas piped to Prudhoe Bay southward toward Valdez, AlaskaReuters wrote, "The deal is a boon for TransCanada, which plans to build a natural gas pipeline from Alaska's North Slope to the south coast, feeding a possible export plant that would ship gas to thirsty markets in Asia."

This southern Alaska plant (see map) will be located in the home of the infamous Exxon Valdez oil spill, which took place in 1989.

Point Thomson oil and gas field contains some 8 trillion cubic feet of natural gas, according to Reuters. In short, a hungry Asian market will be fed with plenty of fuel from Alaska's gas bounty to fulfill its burgeoning oil and gas needs.

Many observers thought that perhaps it was "game over" for the great game of LNG exports in the aftermath of the February 2011 closure of the Kenai LNG terminal, formerly run by ConocoPhillips and located in Kenai, Alaska, which is 136 miles west of Valdez.

They thought wrong. The fun, it appears, has only just begun in Alaska.

Kitimat, British Columbia

Kitimat, British Columbia is home to three LNG export facilities: the Kitimat LNG Facility, theB.C. LNG Facility, and a facility co-owned by Royal Dutch Shell and PetroChina. Kitimat LNG is co-owned by EnCana, EOG Resources and Apache, while B.C. LNG is run by Douglas Channel Energy Partnership in a complex co-ownership arrangement.

EnCana, EOG and Apache recently announced that it would have all of its ducks in the row by the end of 2012, speaking with regards to gaining capital investors in the project.

Once the investor terms of agreement are set, fracked unconventional gas is likely to begin its pipeline journey from Canada's Horn River Shale basin, via the Pacific Trail Pipelines, and head westward to Kitimat, where it will be placed in LNG trains and exported off to highly profitable Asian markets.

One would be wrong to assume the only major energy and climate battle Canada has on its hands is the tar sands project.

If only that were the case.

Coos Bay, Oregon

Coos Bay, Oregon — famous for being the hometown of the late long-distance running legendSteve Prefontaine — is the proposed home for the Jordan Cove LNG facility, and has been the epicenter of the backlash against the North American LNG export boom.

Jordan Cove will be the final destination for unconventional gas fracked and piped out of the Niobrara Shale basin, located in the states of Colorado, Wyoming, Nebraska, and Kansas. The shale gas obtained via the Niobrara, as of now, is carried out of the basin from the Ruby Pipeline, beginning in Opal, Wyoming and ending in Malin, Oregon

PG&E Corporation, Williams Companies, and Veresen U.S. Power Inc. are co-owners of a hotly contested proposed 234-mile long pipeline, the Pacific Connector. This pipeline, which would carry fracked gas from Malin, OR to Coos Bay, home of the proposed Jordan Cove LNG export terminal, is awaiting federal approval.

Not only has there been citizen backlash against both the pipeline and the LNG export terminal, but furthermore, Oregon's federal-level representatives — including U.S. Senator Ron Wyden (D) and U.S. Rep. Peter Defazio (D) — have voiced strong concern about the project, introducing legislation in the attempt to block both LNG exports and the pipeline.

Corpus Christi, TX

On March 14, Cheniere announced it would be filing for its second LNG export terminal in July or August of this year, this one in the scenic city of Corpus Christi, TX, 250 miles west of Cheniere's already existing Sabine Pass LNG export terminal.

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

The terminal would take gas fracked from the Eagle Ford Shale, carried over via pipeline, and place it on the European gas export market. 

The Eagle Ford Shale-to-Corpus Christi pipeline is co-owned by Koch Industries and NuStar Logistics, runs 60 miles from Pettus, TX to Corpus Christi, and is called the Pettus South Pipeline.

Freeport, TX

105 miles southwest of Sabine Pass is the site of another proposed LNG export facility in the small city of Freeport, TX, which has a population of 12,049, according to 2010 U.S. Census data.

This LNG facility is co-owned by Cheniere, Dow Chemical, Osaka Gas, and ConocoPhillips. The facility applied for a DOE export license in January 2012 and is the subject of an environmental review by FERC.

This fracked gas will come from Kinder Morgan owned pipelines running from the Eagle Ford Shale and the Barnett Shale, respectively.

The grassroots activist group, Stop Freeport LNG, is fighting tooth and nail to keep the LNG facility out of their community.

Lusby, MD

Lusby, MD is the proposed home of Dominion Cove Point LNG, owned by Dominion Resources. Dominion received a DOE export permit in October 2011 and has yet to apply for a permit through FERC.

The Cove Point terminal would receive piped fracked gas from the famous Marcellus Shale basin, where it would be sold on the European market.

Fracking for "National Security" Exposed

This geography lesson, if nothing else, exposes the lie that fracking for unconventional oil and gas in shale basins around North America has anything at all to do with "national security" concerns.

Though the industry has a slogan that reads, "Drill A Gas Well, Bring A Soldier Home," the truth is far more complex than that easy-to-digest propaganda. The industry, as this article has made clear, is building up a complex armada of pipelines and LNG terminals, putting the "national security" lie to rest. 

All this comes in the aftermath of the "jobs creation," "clean natural gas," and "bridge fuel" mythology exposed as a trio of shams of epic proportions.

If the "propaganda table" had four legs to stand on, then this table is no longer standing and at this point in history, is merely a tabletop.



ABOUT Steve Horn

 

Steve Horn is a Madison, WI-based Research Fellow at DeSmogBlog. He is also a freelance investigative journalist whose work has appeared in Al Jazeera America, The Guardian, The Progressive Magazine, CounterPunch Magazine, TruthOut and others. Follow him on Twitter at @SteveAHorn.

Point well made. The critics

Point well made. The critics that point out mistakes may or may not be accurate as well. It is distressing that we are exporting big time while our imports grow. The oil and gas business is a sham all to put profits in their pockets while duping the public and the government.
This is a reply to TRYDER's comments

I think for the full danger

I think for the full danger of these tankers to made real to people, there needs to be a good explination of what happens when, inevitably, one sinks, or, explodes near a port city. What about the environment? What amount of carbon emissions come from this fossil fuel?

The details may need some

The details may need some corrections, however, the point was made. The US is not keeping all of its natural gas, just as we export our oil, also. Why not cut back on imports and keep it here? We
use 25% of the world's supply so why not export less.

The national security lie,

The national security lie, the energy independence lie. Lie lie and more lies. All for one thing only to sell off to the highest bidder and enrich the energy corporations because they're not rich enough. Much of this is publicly owned land given away to these companies. The public benefits in no way other than a devastated environment.

Boris Badenov's picture

They would make one hell of a

They would make one hell of a fire ship wouldn't they?
Bye-Bye ports and/or whole cities

Mr. Horn makes such an

Mr. Horn makes such an incredible number of factual errors that his piece loses all credibility.
Basics:
LNG ``trains'' are the multiple linked refrigeration systems that cool the gas, not the tankers, as he says at the top of the story.
Prudhoe Bay (well, Deadhorse, actually) isn't an LNG export terminal and can't be one without extensive dredging. The sea is just too shallow there.
Point Thomson initially will produce natural gas liquids, not liquefied natural gas. This is basic.
Natural gas liquids, or gas condensate, can be compressed at fairly low pressure, so they don't require refrigeration trains. These liquids can be shipped to Valdez in the existing trans-Alaska pipeline. Trans-Canada has no role in that pipeline.
While the Point Thomson link to the main pipeline will have a capacity of 70,000 barrels, it will carry about 10,000 barrels a day initially, which maybe is in 2015 or 2016. That's hardly ``game-changing'' for a line that carries around 600,000 barrels a day now.
The Kenai LNG plant didn't close, and will be exporting cargoes to Asia later this year. It's old, but functioning.
Those are just the errors I find off the top of my head.
There are fascinating issues to be addressed in the whole LNG business, which I've been covering for a decade or more.
But if Mr. Horn can't get the basics right, his analysis can't be taken seriously.
Mr. Horn is the one who needs a primer. And some legs for his tabletop.
Maybe even some new cliches.
Allen Baker

You are totally missing the

You are totally missing the point of the article by getting stuck in the minutia of the details and missing the key and salient point. These companies are demanding extra benefits while wrapping themselves in the flag and claiming that they are doing this in the "national interest", when in fact they're doing it out of pure greed and profit.

If they really cared about the United States and our energy independence, they would take some of these prophets and retrofit gas stations to handle natural gas, while forming partnerships with the auto companies to produce vehicles that can run on both gasoline and natural gas. This is the only way that we achieve true independence, by limiting the amount of oil we import each day.

These companies are not working with America's best interests in mind. If they were, we would not be exporting oil and jet fuel in the quantities that we are. We are facing record prices at the gas pump and air travel is becoming prohibitive with the spike in fuel prices. All they care about is selling their products to the highest bidder on the world market. If I had my druthers, I would nationalize the entire lot of these companies and run it as a state owned enterprise. Then, and only then, will the needs of the American consuming public be taken into consideration.

Do your concerns actually

Do your concerns actually undermine his conclusions?

Ex: (1) LNG ``trains'' are the multiple linked refrigeration systems that cool the gas, not the tankers, as he says at the top of the story.

Who cares? That's a technical point that has no basis in undermining the conclusions.

Ex: (2) Prudhoe Bay (well, Deadhorse, actually) isn't an LNG export terminal and can't be one without extensive dredging. The sea is just too shallow there.

Just like many terminals, pipelines can carry the product off shore to filling stations. In fact, it's a lot m,ore safe to do that than fill at a dock next to a city.

It's always good to have someone point out errors in technical issues, but yet another to point out actual foundation problems in an argument. I'm still wondering if any of your objections undermine his overall conclusion?

And as far as you thinking goes, I'm not sure, to use your terms, "if you can't get the basics of a logical argument correct" that we should give yuor objections any credence. Small errors unrelated to the argument as a whole--that is, those mistakes that have no power to undermine the argument--hardly mean that the article isn't valid.

LNG ships are not "also known

LNG ships are not "also known as trains." They are known as LNG tankers or carriers. The trains are the equipment that cool the natural gas to liquid form. A liquefaction facility will have one of more discreet trains to produce LNG. The Sabine Pass proposal is for four trains.

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