More bad news for gas loving county commissioners John Sweet and Melissa Cribbins. A slump in oil and gas prices has put a hold on a floating LNG export terminal
Excelerate Energy’s Texan liquefied natural gas terminal plan has become the first victim of an oil price slump threatening the economics of U.S. LNG export projects.
A halving in the oil price since June has upended assumptions by developers that cheap U.S. LNG would muscle into high-value Asian energy markets, which relied on oil prices staying high to make the U.S. supply affordable.
The floating 8 million tonne per annum (mtpa) export plant moored at Lavaca Bay, Texas advanced by Houston-based Excelerate has been put on hold, according to regulatory filings obtained by Reuters.
The project was initially due to begin exports in 2018.
Jordan Cove, which is said to be shopping for investors, may find itself in a similar predicament. Unfortunately for Coos County, Sweet and Cribbins chose not to chase up to $10 million in annual payments in lieu of taxes from the Coos Bay Wagon Road and instead put all their budget eggs in the Jordan Cove LNG basket. Even if Jordan Cove succeeds in breaking ground it will not be before 2016, by then a $2+ million shortfall will have doubled.
Watch for more layoffs during this coming budget cycle.
I’m glad you two are having such fun psychoanalyzing my posts and using them as a means of deconstructing the state and national strategy of the Democratic Party. It’s amusing, but unfortunately does not enhance the debate. Let’s recap what we know.
To be honest, I have made some inquiries over the last few days. But not to the Democratic Party. I don’t take marching orders. I prefer to get my information from the horse’s mouth.
The JCEP has no plans to ship LPGs like butane or propane from the JC terminal. The amount of LPGs produced during liquifaction does not have commercial value. There’s just not enough of it. The LPGs will be burned in the Dunes natural gas powerplant.
Veresen has not asked for permits to ship LPGs on the Coos Bay Rail Link (CBRL).
LPGs have been shipped on the CBRL in the past. They are not currently being shipped on the rail, although the Port is open to that possibility in the future. Currently LPGs are shipped to Coos County by truck every day. These are for local distribution and use. Ironically, they would be permitted under Mary’s petition.
So far as I know, the transportation record of LPGs on the CBRL and Oregon highways is spotless.
I did not watch your video, TR. I take your word for it that it is appalling, tragic, and very scary. It is also completely irrelevant so far as the discussion of the JCEP is concerned. If you want to ban LPGs on the CBRL you’ll have to take it up with Mary, not me. It’s OK with her according to her version of the County Bill of Rights petition that is going around.
Why didn’t you watch the video of the propane explosion in Toronto? Is that how the democrats avoid what they don’t like? You were just saying how safe it is and maybe if you never see what it can do you can continue to believe that lie. What was important In your recap is that you stated that the Port is open to that possibility in the future, no surprise that that’s all they are willing to tell you. Your like their Edward Snowden, if you knew any secrets they know you would tell all. Just because you can put all your faith in Kitzhabers crew at the port doesn’t mean the rest of us can or should. They have a history of hiding facts from the public until they can’t anymore.
One thing is certain, the proposed county bill of rights has gotten under the skin of your uppers. You wouldn’t be trying so hard to kill it otherwise.
Psychoanalyzing your posts and using them as a means of deconstructing the state and national strategy of the Democratic Party is exactly what we should be doing. How else are we going to understand the problem and get to a solution? The democrats are the problem and booting them is the solution. That’s the only way to make sure things will change. Oregon didn’t elect a bunch of republicans so when we see bad government here it can only be the fault of the democrats. Oregon has a democrat problem, they are holding hands with the republicans while they sell us out.
What did you think of that video? If a picture is worth a thousand words, then that short video speaks volumes. They are telling people that the risk they would face is similar to your 5 gallon propane tank you have in your backyard BBQ. Why is it so easy to find lots of examples of terrible blasts of all these safe industries your party is selling? The republicans taking over congress will help the FF industry’s energy plans, but here in Oregon we still only have the face of the democrats staring back at us in the who’s to blame mirror. I expect a lot of serving democrats will be happy that the republicans will be taking most of the heat for pushing the country this direction., but here in Oregon we’ll remember that was delivered to us by the democrats.
Mark is the most studiously obtuse “democrat” I have ever encountered. Asking him what he thinks is like asking any ideologue to explain himself… first he has to find out what the party position is before he can provide an answer
I suppose that could be considered a good thing. When he posts its like the old fable about the king has no clothes. He does a good job of removing the closet door to help us see the democrats true nature and why this area is in trouble.
It looks like the rail-supplied propane export plan is not legal in Portland, unless the democrats can get some new language adopted. 1.25 mile long propane trains are going to be to scary for Portlanders and if JC does hope to cash in on the NGLs by rail their going to have to fight citizens of Eugene as well. The democrats have been lucky so far. They got one over on this local party, but taking on the rest of the state is not going to be as easy as it was here. This is what large amounts of propane does when it catches fire.
https://www.youtube.com/watch?v=__1Ym_F94CE
Because Jordan Cove is seeking permit status as an export terminal, I would be surprised if Veresen would be shipping LPGs outbound on the CB Rail Link. Veresen has not asked for permission to do so.
LPGs are no stranger to the CB Rail Link. Prior to the 2007 embargo, about 100 rail cars carried inbound propane every year. The Port would like to bring that traffic back to the line, but until it does inbound LPGs will travel to Coos Bay in trucks instead, about 350 of them.
No accidents. No fireballs. No injuries. No deaths. Hardly any complaints about it either.
It makes you wonder if they are planning to use the CBRL to get extracted propane from JCEP to this new facility they want to build in Portland. The people up north are going to get what we’ve been getting. Lots of promises that kids and schools are going to be the main beneficiaries as always and they are already lobbying the school districts for support just like they did here. Do you think they have already got their non-profit setup to handle the repurposed taxes like they’ve done here?
Kitzhabers people in Portland, Progressive Portlanders Charlie Hales and ex-Kitzhaber chief of staff now-Port Director Bill Wyatt are leading the charge to see if they can get the people of Portland to accept Pembina’s plan to build a $500 million export facility and pipeline for the export of carbon-based fuel to Asia through a NW Port:
“We have been extremely discerning when considering recent energy sector cargo opportunities, and after saying ‘no’ to coal and ‘not now’ to crude by rail, we are confident that we are saying ‘yes’ to the right partner at the right time,” said Bill Wyatt, executive director for the Port of Portland. “Propane”
PORTLAND, ORE. (SEPT. 2, 2014) – Propane Exports Fueling Plans for Historic Investment in Portland.
The Port announced today that Pembina Pipeline Corporation has entered into an agreement to develop a rail-served propane export facility that could be up and running by early 2018
Pembina owns and operates infrastructure that transport various products derived from natural gas and hydrocarbon liquids produced in western Canada.
Just so we all start the new year with some facts. The following is what you get when you vote or dimocrats Marakans:
Despite Climate Warnings, New Export Rules Open Crude Oil Floodgates
Is Push for Corporate-Friendly Trade Deal Top 2015 Priority for White House? (you bet’cha)
Voting D or R is voting for your own, and this earths’ abuse. Period. End of discussion.
Mark, your reaction to my bringing up the NGL market seems rather odd, didn’t you know that Veresen is already in the NGL business? Right now the only products they have to sell are NGL products. They are not going to pass on that sector of the LNG $$tream. Do you think they will just bypass all of that market when they get here? No, they will have to use the CBRR to ship those products to market or build more pipelines. Why are you trying to deny this? Maybe because it will get more people who live within one mile of those tracks upset if they realized this was going to happen. Veresen ( or whoever buys JC) is going to be sending rolling bombs through all those towns. The train will be the only way to get those NGL’s to market. This next part was taken right from Veresens own website.
http://www.vereseninc.com/our-business/midstream/aux-sable/
The Aux Sable midstream business, which Veresen jointly controls through our 42.7% ownership interest, is comprised of a world-scale NGLs extraction and fractionation facility (known as the Channahon Facility) capable of producing up to 2.1 Bcf/d of natural gas and recovering 80 Mbbls/d of NGLs consisting of ethane, propane, normal butane, iso-butane and natural gasoline and NGLs storage and distribution facilities.
The Channahon Facility is a key component of the Alliance system as it manages the higher heat content levels associated with the NGLs-rich natural gas flowing on the Alliance Pipeline in order to meet downstream natural gas heat content specifications. The Channahon Facility is strategically located near Chicago, Illinois at the eastern terminus of the Alliance Pipeline, serving major NGLs markets.
Aux Sable’s Channahon Facility is a significant supplier of ethane, propane and butanes to the midwest U.S., particularly in Illinois and its neighbouring states.
Aux Sable has the exclusive right to extract and sell the NGLs transported by Alliance. The NGLs produced by Aux Sable are an integral component of numerous energy-related products (including home and industrial heating, crop drying, cooking, and motor fuel) and are used as feedstock for the petrochemical industry — for the production of ethylene, propylene, butadiene and other derivatives which are used to produce products such as polyethylene, rubber, plastics, solvents and foam materials — and in crude oil refining for gasoline and gasoline blending.
MGx says: “Mark should actually read the EIS and the application, then he would know what they are planning on shipping by rail.”
Fair enough. What section should I be reading? Chapter 4.10.1.3 discusses railroad traffic. It says the Coos Bay Rail Link (CBR) will have limited use during construction; most of the big stuff will arrive by sea. Interestingly, JC may use the CBR to bring construction workers over from North Bend making TR’s wish for a people-train come true. There’s no mention of moving any NGL products on the CBR once the JC terminal is operational. Is that elsewhere in the EIS? Let me know. I don’t see it.
I thought it was also interesting that the EIS explains the CBR is currently used to ship liquified petroleum gas. Where’s the outrage about that?
to Mark M: You write that in your opinion, “. . . the current oil price is a “reverse bubble.” That is, it’s artificially low primarily because of Saudi Arabia’s market manipulation. It cannot go on forever. But if it does, it’s a game-changer.”
It’s entirely possible that it’s a reverse bubble, but even if it is, that doesn’t guarantee its effects will be short-lived. At the same time nothing goes on forever, because forever is a very long time. And historically, oil prices have moved up and down in long cycles. The first “energy crisis” back in the 1970s was instigated by Saudi Arabia, which was displeased with our support for Israel and formed OPEC to keep prices high. By the end of that decade oil prices were still high, but by the mid-eighties they crashed, partly because those high prices had inspired more drilling and more production everywhere, which is always the case with commodities. But in part that mid-eighties oil price crash happened (again) thanks to Saudi Arabia. We recently learned that the Reagan plan destroy the Soviet economy included a Saudi-orchestrated oil production increase, which caused prices to crash. The Russians, then as now, were highly dependent on oil exports, and their economy was already in bad shape. The rest is history.
Now, as a wise Chinaman said, “Making predictions is very difficult. Especially about the future.” But considering the record of the past, it seems quite possible that the current low oil prices will last ten years or longer, long enough to discourage any investors from financing the Jordan Cove LNG scheme. Remember, that facility will only be built if the promoters have long-term contracts signed by overseas buyers that guarantee JC’s investors a financial return. At the moment Asian buyers, obviously very aware of the new market trends, are not terribly interested in any long-term contracts, since they anticipate a plentiful supply of gas that can be had at spot prices lower than long-term contract prices. Until recently, the prevailing situation was the reverse: long-term gas contracts were pegged to the price of oil, and buyers who needed gas above and beyond their contracted supplies (for example, power plants in some country that was having a very cold winter) had to pay more, not less, on the spot market.
So all this makes for a profound change. But to even contemplate the possibility that low prices could “last forever”, as you seem to do, is a-historical. They WILL change. But by that time the world economy is likely to have changed considerably, quite likely in ways that fail to make Jordan Cove financially viable.
In the meantime, if JC persists with its FERC application process (I doubt it, but you never know), it will be important to attach an expiration date to the FERC approval, if any. And even more important, we need to move to thoroughly transform how industrial development decisions are made around here. Forty years of disasters is quite enough; the results are there for those who have eyes to see.
Finally, your statement that it’s “Game Over” for the climate places you in the company of the many religious doomsday cults that have predicted the End of the World, over and over. “Bien étonnés de se trouver ensemble”, colloquially put as: I didn’t know you were in my bed. But that’s a whole ‘n other chapter.
Mark is on a roll tonight. He got upset on many fronts. Sweet and Cribbins must be democrats. He jumps to their defense like they are the next Arnie and Caddy. He also thinks that I am making up stuff, but he never says exactly what he thinks I’m making up. It must have been the talk about using the publicly owned train to transport lucrative liquid gas products to market if JC gets built.
He either hasn’t considered it and was shocked or he’s afraid more of the cat is getting out of the bag and the public doesn’t need to know about that part of the plan until its a done deal. I would have a hard time believing that Veresen is just going to ignore the money they could make selling all the NGL products they will produce making the LNG ready for export. They are smarter than that.
This report should back my claim.
BENEFITS OF INTEGRATING NGL EXTRACTION AND LNG LIQUEFACTION
TECHNOLOGY
The heavy hydrocarbons separated from LNG, may then be utilized as petrochemical sales or for gasoline blending. In fact, NGL and/or LPG liquids
may command a greater value than LNG. here’s the link
http://lnglicensing.conocophillips.com/Documents/SMID_016_AICHELNGNGLIntegrationPaper.pdf
Mark should actually read the EIS and the application, then he would know what they are planning on shipping by rail
Saw this on Twitter today, somehow it seems apt
Just a couple of things. First, I mentioned what looks like the collapse of JC’s chances in my recent article. How about a link? I wrote a similar piece for The World, but they’ve been sitting on it for weeks. I’m still quite convinced my view is correct, and the JC’s-ass-kissing commissioners are merely getting their lips dirty — along with the rest of the B.S. Oregon crowd that’s been doing the same between drooling sessions.
Second, floating LNG terminals may well be the future for LNG transportation, but not in Coos Bay. The idea for such terminals is to anchor them above an offshore gas field or near an on-shore gas field, liquefy the gas on board and then load it onto tankers moored to the floating terminal. Once the gas field is depleted, the terminal can be moved some place else, thus producing tremendous construction cost savings and a reduction in regulatory complications besides. As far as I know we have no known gas fields in Coos Bay, or at least none that the state government would approve for drilling, so it would make no sense to have a floating terminal unless a pipeline were built specifically for this, which seems unlikely. But the floating platform idea has a lot of potential for exporters like Australia.
Agree totally on your second point. I still think — and it’s by no means an expert opinion — that the current oil price is a “reverse bubble.” That is, it’s artificially low primarily because of Saudi Arabia’s market manipulation. It cannot go on forever. But if it does, it’s a game-changer. Cheap oil completely upends everything. Who knows if projects like Keystone or the JCEP can maintain profitability. Probably not, but all bets are off. If oil stays below $70 or goes lower then we live in a different world.
The good news for the local anti-LNG crowd would be that the JCEP becomes less likely. The bad news for climate change fighters is that it would pretty much be Game Over for the climate. There is no way on earth to keep cheap fossil fuel from being burned. Well, there is one way — a carbon tax. But if oil is $70 you’d need a $50 tax to make a difference and there’s just no global political juice for that. China, India, and the developing world (and face it, the US too; heck, we’re already buying Hummers again) would rather burn those cheap hydrocarbons.
But I don’t think that’s a likely problem we will face. I think the price of oil will go up again and things will settle down. But no one really knows. And there’s not a lot we here in Coos County can do about it (other than advocate for a carbon tax.) We’ll see.
This yet another mischaracterization of the facts. Commissioners Sweet, Cribbins, (and Main too!) did not choose Jordan Cove over the Wagon Roads land. You keep presenting this false dichotomy of “Jordan Cove OR . . .” when it has always been “Jordan Cove AND . . .” The County is not losing any revenue source or business opportunity by pursuing the JCEP. The Wagon Roads are an entirely separate and distinct issue. Everyone knows how important that revenue is for Coos County. That’s not at issue. The issue is how to resolve the politics behind getting a deal done. If you know the secret to that, please let Bob Main know, so he can tell our Congressional delegation and they can tell John Boehner and he can tell Mitch McConnell and we can start reaping the rewards.
Maybe I’m missing something — Why can’t we do both Wagon Roads and JCEP at the same time? Why is it an either/or proposition?
Bullshit! They put all their eggs in the LNG basket and ignored the Wagon Road. Cribbins once even said she didn’t want to “insult” Wyden by proposing an amendment to the original Act that would have cleared up the confusion with the O&C lands.
The only person consistently misrepresenting facts on MGx is you, Mark.
The reason Wyden took it out was because it would. not. pass. in the Senate. What power do the Coos County Commissioners have to pass legislation through the Senate? You want Commissioner Cribbins to tell a senior US Senator how to count votes and pass a bill? Seriously? What should the Commission be doing that it is not doing? Really, I’d like to know.
You haven’t explained why it’s an either/or proposition and not both. Commissioner Sweet has consistently and repeatedly said that we should do everything we can to develop and diversify our economy whether or not the JCEP breaks ground. How is THAT not true?
Because Sweet doesn’t back up his words with action.
Yes, I do expect the commissioners to “lobby” the Senator instead of genuflecting they need to remind him who he works for. After all, no one is really asking him to do anything but honor an existing Congressional Act.
And how do you know the Commissioners are NOT lobbying every Congressional representative? I challenge you to contact each of the eight DC representatives’ offices and see if they are not extremely familiar with the Wagon Roads dilemma. They will each tell you (even Rep. Walden’s office) that the solution Coos County wants is 100% supported by Oregon yet 100% not possible in Congress. If you want the Defazio-Schraeder bill, you’re gonna have to lobby Congress people outside of Oregon, not inside it. You need to be prepared to learn that most of them are liberals.
What is it that you think Commissioner Sweet should be doing? What is it he has done that belies his stated commitment to a diverse economy in Coos County?
If you have grievances against John Sweet, fine. Let’s hear ’em. Just don’t make things up. That’s TR’s game. You’re too smart for that.