Replies to This Discussion

Permalink Reply by 015334grltd9m on February 5, 2013 at 8:17am

"We love you too Jack!"

Permalink Reply by Jack Straw on February 5, 2013 at 11:16am

Monday, February 4, 2013

Source: http://energyandmoney.blogspot.co.uk/2013/02/fracking-concerns-adre...

 

Fracking concerns addressed

 

 

Chart: US gas price -44% since shale gas revolution, Euro gas +23%, UK gas +30% (in USD)... Ban fracking! :)

 

We live in panic times. Horror stories abound about shale gas, the energy revolution that has taken US gas prices to the lowest level in decades, generated $76 billion toward GDP and created 600,000 jobs... More importantly creating a massive competitive advantage for the US versus Europe and the rest of the world that suffer high cost of energy due to expensive pipeline gas and LNG, polluting coal and heavily subsidized alternatives, crippling economic growth and prosperity. Instead of working alongside industry leaders and innovators, together with environmental agencies and governments to develop this clean and cheap source of energy in an environmentally friendly way, we, in Europe, decide to ignore it. Meanwhile, in the US, the eco-friendly Democrat administration is supporting its way to growth and jobs putting in place the framework to develop this enormous resource in a sustainable way.

 

I hereby compile the main concerns as outlined in Credit Suisse's excellent report "The Shale Revolution" (12/17/12) and the essential articles from Robert W. Chase (Debunking the fracking myths) and other experts (see below) with my own analysis from my post "The Energy Treasure That Most Europe Rejects"

 

Credit Suisse mentions that "environmental concerns have played a big part in the quest to unlock the shale gas potential in Europe. Fraccing moratoriums have been imposed in France (July 2011), Bulgaria (January 2012) and Romania (May 2012), whilst the Netherlands have put shale gas drilling on hold for a further year as an investigation is carried out into the environmental risks".

 

In my post I mentioned:

Nine hundred billion euros.This is what Europe could save in its goal of reducing CO2 emissions by 80% in 2050 if, in addition to further renewable energy, the continent would develop its shale gas reserves according to this sector study.

 

The funniest thing is that the coal, conventional gas and solar lobbies have all joined forces in the war against shale gas. There must be something truly threatening and interesting to see such an unholy alliance.

 

None of the three are interested in cheap gas prices, because they have seen with horror how gas prices in the U.S. have plummeted due to the shale gas revolution, and therefore obliterated the use of coal for power generation and the grants of succulent subsidies as abundant energy reduced power prices (see my previous post about this). And for a continent obsessed on energy independence, it seems funny for Europe to deny the chance of developing domestic gas, not Russian or Nigerian or Qatari. European. And 50% cheaper if production grows as it has in the United States. What a horror. Ban It!

 

Europe has no fewer than 156 tcm (trillion cubic metres) of estimated shale gas reserves. That means c90 years of demand covered and saving up to €24bn p.a of subsidies for alternative technologies. Ban it!.

 

Fracking technology, thanks to the revolution of shale gas in the United States is tried, tested and of negligible ecological impact. However, we have seen many alarmist reports, even a movie, Gasland, which was immediately refuted by the industry, scientists and the U.S. Department of State of Energy as inaccurate... But best of all in these alarmist reports is that in every one you read that "we could not confirm accurately any of (these) claims "(Cornell study, for example). When I wrote this post about the shale gas revolution many just ignored it as uneconomical.

 

This reality, Europe's available natural resources is what none of the politicians and lobbyists mentioned, fans of subsidies, want you to see. They prefer inculcating fear with tales of energy dependence and expensive subsidised technologies. Before looking for a solution to develop the continent's natural resources efficiently, in a clean and competitive manner, they prefer to ban. And then complain about the energy dependence.

 

So on to the concerns:

Induced Seismic Activity: I find this the funniest of all when presented in countries that are happy to spend billions building windfarms and solar panels and underground power networks.

 

"Even those man-made tremors large enough to be an issue are very rare, says a special report by the National Research Council. In more than 90 years of monitoring, human activity has been shown to trigger only 154 quakes, most of them moderate or small, and only 60 of them in the United States. That's compared to a global average of about 14,450 earthquakes of magnitude 4.0 or greater every year, said the report.

 

Only two worldwide instances of shaking — a magnitude 2.8 tremor in Oklahoma and a 2.3 magnitude shaking in England— can be attributed to hydraulic fracturing". "There's a whole bunch of wells that have been drilled, let's say for waste water and the number of events have been pretty small," said report chairman Murray Hitzman, a professor of economic geology at the Colorado School of Mines. "Is it a huge problem? The report says basically no."

 

Quoting Robert W Chase's excellent "myths of fracking": "William Leith, senior science adviser for earthquake and geologic hazards at the U.S. Geological Survey, told National Public Radio recently: “Fracking itself does not put enough energy into the ground to trigger an earthquake. That’s really not something that we should be concerned about.”

 Oil and gas waste water disposal wells, on the other hand, do have a history of causing tremors, most recently in Youngstown, Ohio. However, by reducing the volume of water injected, the depth of wastewater injection wells, and avoiding earthquake-prone areas, the risk of inducing tremors, however small, can be reduced."

 

Contamination of groundwater:

It is worth noting:

Hydraulic fracturing technology is proven, is used in thousands of wells in the U.S. annually safely, and there have only been one or two cases of minor accidents. The fluids used in the fracking of the rock are composed by more than 99.98% of water (94.62%) and sand (5.24%), with a minimal amount of chemicals, highly diluted, easily stored and handled safely.

 

Of these chemicals, the majority (hydrochloric acid, ethanol, methanol, ethylene and sodium hydroxide) are recovered perfectly in the extraction process. No state or local department in the U.S. has found evidence of water pollution of aquifers. The industry is also using more than 5,000 tons of steel and cement to protect the groundwater, and the fracking process occurs at least a mile deep, well away from the aquifers.

 

Read: What is in fracking fluids? http://www.energyfromshale.org/hydraulic-fracturing-fluid)

Industry develops nontoxic fracking fluids: http://www.coloradoan.com/viewart/20130204/NEWS11/302040011/Energy-...

 

Greenhouse gas emissions: The main component of natural gas is methane, a gas associated with global warming when released into the atmosphere. During the flowback phase of shale gas, as the fracturing fluid is returned to the surface, it brings along the natural gas released from the shale.

 

Reduced Emission Completion (REC) technologies can now capture the emerging gas at the wellhead and are used increasingly".

 

Natural gas generates less CO2 emissions than oil, conventional or non-conventional, and coal, it is the cheapest, cleanest and most abundant source of energy that does not require economic-crisis-inducing subsidies. In my post "How Cheap Gas Killed The Renewable Star" I also mention the enormous economic difference between technologies.

 

Water sourcing and disposal: According to a report by the UK’s Tyndall Centre for Climate Change, fracking operations carried out on a 6 well pad would require 54,000 ‒174,000 m3 of water. This presents the problem of water shortage in Europe, particularly parts of central Europe. The second water issue if that approximately 10-40% of the fluid will return to the surface bringing with it the natural gas and added chemicals. This is also potentially harmful or environmentally damaging and operators need to provide a clear water management plan before operations can begin.

 

Robert W Chase wrote "Some mistakenly say the practice can pollute water tables which lie just a few hundred feet or less below the surface. Fracking is done well below 7,000 feet, and solid rock separates the oil and gas deposits from shallow groundwater aquifers. This rock buffer makes contamination from fracking virtually impossible.

 In addition, wells are built with at least four layers of steel casing and concrete and are cemented in place, creating a solid divider between gas production and any fresh-water aquifers. Energy Secretary Steven Chu recently asserted: “We believe it’s possible to extract shale gas in a way that protects the water, that protects people’s health. We can do this safely.”

 

Read more about recycled water use in fracking: http://www.americanrecycler.com/0512/1517energy.shtml

 

http://www.ohio.com/news/local/chesapeake-unveils-system-to-recycle...

 

By Robert W. Chase (Debunking the fracking myths http://eetweb.com/Debunking-fracking-myths/) © 2013 Penton Media Inc.:

On the positive side: According to a study by IHS Global Insight, in 2010, U.S. shale gas production due to fracking generated $76 billion toward GDP, accounted for $33 billion in capital investments, was responsible for $18 billion in tax and federal royalty revenues, and supported 600,000 jobs. Experts estimate that nearly $2 trillion in capital investments will be created into the U.S. shale-gas industry through 2035. The benefits of such large investments will spread through communities, businesses, and governments.

 

The US path to energy independence here: http://energyandmoney.blogspot.co.uk/2012/11/the-us-path-to-energy-...

 

Adam Sieminski, IEA:  "US energy independence is not a pie in the sky. It's realistic"

 

Finally, on EROEI we made a lengthy post here (http://energyandmoney.blogspot.co.uk/2011/06/peak-oil-defenders-mos...) but the words of the IEA make a lot of sense as a finish line: "As long as consumers are willing to pay for it and resources are there, consuming some energy to produce energy is fine".

 

Further read:

Fracking: Facts and Myths

 http://thf_media.s3.amazonaws.com/2012/pdf/bg2714.pdf

 

Anti-fracking documentary challenged with facts:

 http://watchdog.org/42444/oh-gaslands-claims-debunked-by-new-docume...

 

 

 

Permalink Reply by Jack Straw on February 5, 2013 at 9:17pm

 

Source: http://www.reuters.com/article/2013/02/05/column-kemp-oilgas-indian...

 

COLUMN-Tribes call for faster drilling on Indian lands: Kemp

 

Tue Feb 5, 2013 10:03am EST

(John Kemp is a Reuters market analyst. The views expressed are his own)

By John Kemp

Feb 5 (Reuters) - Native American communities are often portrayed as victims of avaricious oil and gas drillers and pipeline companies, who despoil the prairie with little thought for sacred sites.

In fact, tribes are some of the largest petroleum developers in the United States and are pressing the federal government for more control over drilling on their own territory.

The tribes should be ideally placed to benefit from the horizontal drilling and hydraulic fracturing techniques that have revolutionised production across the United States.

Instead, much of the development has taken place around them on privately owned and state property as drillers try to avoid the cost, complexity and delays of trying to obtain permission to drill from the federal overseers of Indian lands.

For almost a century, oil and gas has been produced on reservations and other lands held in trust by the federal government for Native Americans.

In northern New Mexico, almost 3,000 active and plugged oil and gas wells are scattered across 377,000 acres of the Jicarilla Apache Nation, covering about a third of the tribe's reservation lands, which are crisscrossed by 2,000 miles of gas-gathering pipelines and roads.

"We rely on oil and gas resources to provide governmental services to our tribal members and to those non-tribal members living on the reservation," Jicarilla President Levi Pesata told the Senate Committee on Indian Affairs in February 2012 ("Energy Development in Indian Country" Senate Hearing 112-628).

"We have been involved in the oil and gas industry for about 60 years. Throughout this time we have encouraged and fostered development of our reservations while protecting our sovereignty ... the Nation has been diligent in designating and protecting pristine areas as well as sacred sites and spiritual and culturally sensitive areas from disturbance," Pesata told the committee with obvious pride.

The tribe has its own oil and gas production company, Jicarilla Apache Energy Company, JAECO.

Senators also heard from Utah's Ute tribe, which has seen oil and gas production on its reservation since the 1940s.

"The tribe is a major oil and gas producer. We have about 7,000 wells that produce 45,000 barrels of oil a day. We also produce about 900 million cubic feet of gas per day. And we have plans for expansion. The tribe is currently in the process of opening up an additional 150,000 acres to mineral leases," the chairwoman of the Ute Tribal Business Committee told senators.

"The tribe relies on oil and gas development as the primary source of funding for our tribal government and the services we provide," according to the Ute.

But perhaps the most poignant statement at the hearing came from Montana's Crow Nation: "Given our vast mineral resources, the Crow Nation can, and should, be self-sufficient. We seek to develop our mineral resources in an economically sound, environmentally responsible and safe manner that is consistent with Crow culture and beliefs. The Crow people are tired of saying that we are resource-rich and cash-poor."

FRUSTRATION AND DELAYS

In a report released on Monday, Senator Lisa Murkowski, the highest-ranking Republican on the Senate Energy and Natural Resources Committee, said, "Claims that ... federal policies have had a significant role in domestic oil production are ... deeply misleading.

"About 96 percent of the increase in domestic oil production is attributable to growth on state and private land. The overall domestic increase is in spite of federal policies that stymie production," Murkowski added. ("Energy 20/20: A Vision for America's Energy Future" Feb 2012)

Federal agencies, including the Bureau of Land Management (BLM), regulate both federal lands and those held in trust for the tribes, which are often lumped together as "public lands".

BLM and other agencies outlined their vision in a 2011 report on the "New Energy Frontier: Balancing Energy Development on Federal Lands". It is long on the potential for renewable energy sources such as wind, solar, geothermal and hydro and gives short shrift to coal, oil and gas.

The report explains that exploitation of resources on public lands must be balanced against other considerations: wildlife, scenic resources, groundwater quality, air quality, recreation, cultural resources and rural life.

But what the federal government sees as careful stewardship, the tribes see as burdensome and overly bureaucratic regulation.

"BLM apparently considers Indian lands to be 'public lands' and plans to apply its fracking regulations to Indian lands," the Crow Nation told the committee. "Indian lands are not public lands. Indian lands are for the exclusive use and benefit of Indian tribes. The BLM's oversight of activities on our lands is in fulfilment of BLM's trust responsibility to the tribe."

"The BLM should not apply its public interest standards to our lands ... Congress (should) pass legislation that would prevent Indian lands being swept into laws and policies for public lands," the Crow demanded.

Ute representatives complained about BLM's 49-step process to approve a single oil or gas well, including a site-specific environmental assessment, an application for permission to drill (APD) and an application for right of way (ROW) for associated roads and pipelines.

It checks every well complies with the National Environmental Policy Act (NEPA), as well as the Endangered Species Act, the Clean Air Act, as well as various sets of Indian leasing regulations.

If everything goes right, the steps can be completed in about 90 days. But in practice the actual time it takes to process a permit for the Ute is around 480 days, more than a year.

The result is a bureaucratic nightmare. Many companies prefer to bypass Indian lands and drill on privately owned or state-owned lands, where these requirements do not apply.

Drilling on Indian land is also expensive. BLM charges a fee of $6,500 for every application for permission to drill to cover its costs, with extra charges for right of way applications and other work. In contrast, the state of Montana charges just $75 for a drilling application.

"We are aware of one company that has cancelled its plans to develop two wells on the Fort Peck Reservation because (Bureau of Indian Affairs) staff insisted on a ROW fee in excess of $28,000, which is far more than would be paid off reservation," Sioux representatives told the hearing.

All the shuttling back and forth between different agencies adds to confusion and delays. "Agency staff too often seem uninterested in working with private companies in a fair, timely and efficient manner," the Sioux complained.

The tribes voiced suspicion about new fracking regulations BLM is developing for federal lands, which are likely to be applied to Indian lands as well.

Finally the tribes want better tax treatment. In a landmark Supreme Court case ("Merrion v Jicarilla" 1982), the tribes won the right to impose a severance tax on oil and gas produced on their land. Unfortunately in a subsequent case ("Cotton Petroleum v New Mexico" 1989), the court found states retained the right to impose their own taxes on non-Indian companies operating on Indian lands.

The result is that much oil and gas production on Indian lands is burdened by double taxation. The Jicarilla have negotiated an agreement with New Mexico to eliminate double taxation via a state tax credit, but only for wells drilled after 1995. The tribes want Congress to recognise their exclusive tax power over oil and gas produced on their lands to strengthen their revenue base and eliminate the double taxation disadvantage.

Some progress has been made. In North Dakota, the Department of Interior has established a "one stop shop" to speed up drilling permits on the Fort Berthold Reservation, which lies at the heart of the Bakken formation. Oil and gas permits are being processed in just 60 days, the Ute told Congress.

There are now 28 rigs drilling on Fort Berthold lands, with 793 active wells, according to the North Dakota state government, producing 135,000 barrels of oil per day in November.

Notwithstanding pressure from the tribes themselves, the federal government seems unenthusiastic about drilling on Indian lands, given the administration's strong preference for clean energy.

Murkowski's report called on the Obama administration to speed up permitting on Indian land. The Interior Department has set up a handful of other one-stop shops, but the process is not common, and new regulations governing fracking on "public lands" threaten to make delays even worse. (editing by Jane Baird)

 

 

Permalink Reply by Jack Straw on February 10, 2013 at 10:17am

Source: http://www.publiusforum.com/2013/02/07/green-movement-founder-oppos...

Green Movement Founder Opposes Wind Turbines in His Backyard

February 7, 2013 | Filed Under Britain, Budget, Business, Democrats/Leftists, Elections, Electric, Energy, Europe, Government, Government, Corruption, Jobs, Liberals, Nuclear Power, Progressives, Solar, Warner Todd Huston | 1 Comment

-By Warner Todd Huston

One of the world’s premiere environmentalists, credited as a founder of the green movement, is fighting plans to erect wind turbines in his own village.

Professor James Lovelock, 93, is renowned for having created the “Gaia Theory” and becoming one of the World’s earliest and most active modern environmentalists. He is also known for predicting global warming and saying that by the year 2100 warming would kill off four fifths of the world’s population.

Lovelock has, however, has lately come at odds to the movement he helped foster angering the environmental movement by becoming a recent advocate of nuclear power and for opposing wind energy.

It’s a case of NIMBY (not in my back yard) for the professor as he has joined local activists in Broadwoodwidger, Devon, who are trying to stop the erection of wind turbines. Lovelock says wind turbines are “monuments of a failed civilization.”

“I am an environmentalist and founder member of the Greens but I bow my head in shame at the thought that our original good intentions should have been so misunderstood,” Lovelock recently wrote.

“We never intended a fundamentalist Green movement that rejected all energy sources other than renewable, nor did we expect the Greens to cast aside our priceless ecological heritage because of their failure to understand that the needs of the Earth are not separable from human needs.”

Lovelock especially stands against greenism via certain acts of government fiat legislation calling it something akin to “fascism.”

“Although well-intentioned it is an erosion of our freedom and draws near to what I see as fascism,” he said.
____________
“The only end of writing is to enable the reader better to enjoy life, or better to endure it.”
–Samuel Johnson

 

Permalink Reply by Jack Straw on February 10, 2013 at 10:30am

Source: http://www.washingtonpost.com/world/europe-consuming-more-coal/2013...

Europe consuming more coal

By Michael Birnbaum, Published: February 7

JAENSCHWALDE, Germany — Green-friendly Europe has a dirty secret: It is burning a lot more coal.

Europe’s use of the fossil fuel spiked last year after a long decline, powered by a surge of cheap U.S. coal on global markets and by the unintended consequences of ambitious climate policies that capped emissions and reduced reliance on nuclear energy.

The new dependence on one of the dirtiest fuels shows just how challenging it is to maintain the momentum needed to go green, analysts and officials say, and demonstrates the far-reaching effects of America’s natural gas boom.

In the United States, natural gas is now frequently less expensive than coal for power, so demand for the hard, black fuel has plummeted. Ships are steaming the coal around the world instead. U.S. coal exports to Europe were up 26 percent in the first nine months of 2012 over the same period in 2011. Exports to China have increased, too.

“It’s been very welcome that U.S. greenhouse gas emissions have been going down because of the switch to gas,” said David Baldock, executive director of the Institute for European Environmental Policy in London. “But if we’re simply diverting the coal somewhere else, particularly to Europe, a lot of those benefits are draining away.”

In Germany, which by some measures is pursuing the most wide-ranging green goals of any major industrialized country, a 2011 decision to shutter nuclear power plants means that domestically produced lignite, also known as brown coal, is filling.... Power plants that burn the sticky, sulfurous, high-emissions fuel are running at full throttle, with many tallying 2012 as their highest-demand year since the early 1990s. Several new coal power plants have been unveiled in recent months — even though solar panel installations more than doubled last year.

Here in Jaenschwalde, a stone’s throw from the Polish border, the forested countryside quickly drops away into a 300-foot-deep pit stretching for miles. Enormous machines slowly eat away at the earth and shower soft lignite onto a conveyor belt that feeds directly into a nearby power plant. From the precipice of the mine, the 20-foot-tall trucks at the bottom look like Tonka toys.

Last year, the power plant consumed 88,000 tons of lignite a day and generated more electricity than it had since 1981, according to Vattenfall, the Swedish company that runs it. That record is even more impressive given that in 1981, Communist East German officials didn’t have to contend with labor laws or environmental regulations and could run the mines almost every day of the year.

The expansion of lignite mining has stunned some people who live in its path. One community under threat is the tiny hamlet of Atter­wasch, a cluster of 250 people on the edge of a proposed expansion of the Jaenschwalde mine. They might have to leave their homes, as well as their church, whose chapel was built in 1294.

“This church survived the Thirty Years’ War [in the 1600s], two world wars and socialism,” said Mathias Berndt, the senior pastor at the church, which is festooned with anti-coal-mining protest banners. “Now a free country is coming and saying, ‘Good for you, but now you have to move.’ ”

Demand for coal in Germany has been rising since a May 2011 move to phase out nuclear power by 2022. The shutdown was spurred by the nuclear meltdown at the Fukushima Daiichi plant in Japan as well as long-standing German concerns about safety. But nuclear energy, which is low in greenhouse gas emissions, has been partially replaced by brown coal. Lignite supplied 25.6 percent of Germany’s electricity in 2012, up from 22.7 percent in 2010. Hard black coal supplied an additional 19.1 percent last year, and it was also on the rise.

Germany phases out nuclear

“The faster phaseout [of nuclear energy] has led to an increased fallback on lignite,” said Thomas Bareiss, a member of Germany’s parliament and the energy policy coordinator for the ruling Christian Democratic Union party. “Lignite will surely play an important role for our energy mix over the next two or three decades.”

But the rise of coal has posed a challenge to Germany’s tough environmental goals. By 2050, the country aims to generate 80 percent of its electricity from renewable sources, allowing steep reductions in greenhouse gas emissions. Green advocates worry that if Germany’s extensive — and pricey — support for renewable energy such as wind and solar power diminishes, coal might further fill in the gap.

Energy companies say that the two forms of power generation can live together for now. Lignite plants, they say, are an economical way to meet demand at times when the wind isn’t turning windmills and the sun isn’t warming solar panels. But officials acknowledge that with the ambitious energy goals, coal’s future might be limited.

Germany “has to change completely,” said Hartmut Zeiss, head of mining for Vattenfall Europe. “The question now is how long it will take and what we can afford.”

In other European countries, the quick rise of coal has surprised people who thought it was a waning industry. In Britain, domestic coal production nearly died in 1984 during a bitter, year-long miners’ strike that pitted Prime Minister Margaret Thatcher against the once-powerful unions. Domestic production is still moribund, but in the first nine months of 2012, imports of U.S. coal were up 73 percent from the same period in 2011.

The few remaining domestic coal mines say they can’t compete, and newspaper headlines have harped on the irony.

“The future looks a bit gloomy,” said David Brewer, director general of the Confederation of U.K. Coal Producers.

Consumption of coal also has leapt in Spain and Italy, with much of it supplied by the United States. That comes despite extensive efforts to harness Spain’s sun and Italy’s wind in the name of power production. Consumers, slammed by sky-high unemployment, have been particularly sensitive to energy prices.

U.S. shift to natural gas

The abundance of American coal on international markets has been an unintentional side effect of the rapid rise of new drilling techniques for natural gas in the United States. Hydraulic fracturing, or “fracking,” has opened up new reserves so vast that the United States will soon become a net natural gas exporter, slashing the country’s reliance on costly oil imports. U.S. manufacturers are looking with glee at cheaper natural gas prices. And because natural gas is cleaner than coal, U.S. greenhouse gas emissions from electricity generation have dropped to their lowest levels since 1992.

Now, U.S. coal is spreading around the world instead, pushing down global prices. In Europe, that has raised fears among environmentalists that the cheap natural gas in the United States has simply led to higher overall fossil fuel consumption.

One big part of the problem, experts and officials say, is Europe’s cap-and-trade system, which aims to reduce European Union-wide industrial greenhouse gas emissions by 20 percent by 2020. The system is the centerpiece of Europe’s green policies. But the program, which charges industries for permits to emit greenhouse gases, no longer serves as a major disincentive to pollute. Industrial production fell dramatically during the economic crisis, so overall greenhouse gas emissions remain well underneath the cap, and they are still falling. The price per ton of carbon emissions is barely more than a tenth of its 2008 peak. Energy companies, who must plan decades in advance, have shied away from investing in gas-fired power plants because they are not profitable in comparison to coal.

Europe’s coal use might soon taper off, some experts say. And European lawmakers are trying to prop up the cap-and-trade system by setting more ambitious targets for 2025 and 2030. That would quickly send the price of permits up and make coal less competitive with greener forms of energy.

“The higher the price is for carbon, the worse the business case is for coal, and the better it is for gas,” said Hubertus Bardt, an energy expert at the Cologne Institute for Economic Research.

In addition, American mines might cut back on their production because of the lower prices, thus tightening the global supply and making coal less competitive in comparison to other energy sources, according to analysts.

For now, confronted with a glut of newly available fossil fuel, environmentalists are trying to decide whether it’s best to try to keep it underground.

“What we want to achieve is a reduction in the total quantities of the emissions of greenhouse gases,” said John Broderick, a research fellow at the Tyndall Center for Climate Change Research in Manchester, England. “If we’re serious about this, we would be looking to disincentivize the extraction of fossil fuels.”

Petra Krischok in Jaenschwalde, Germany, and Eliza Mackintosh in London contributed to this report.

Permalink Reply by mark ayers on February 10, 2013 at 12:35pm

Hope you don't mind Jack, I thought this article could use an illustration.  note the windmill. This the  Jaenschwalde Mine.

 

Permalink Reply by Jack Straw on February 17, 2013 at 11:50am

 

Source: http://www.bloomberg.com/news/2013-02-14/shale-lpg-poised-to-make-u...

 

SHALE LPG POISED TO MAKE U.S. NET EXPORTER FOR FIRST YEAR
(Bloomberg, Saturday, February 16, 2013) --

The U.S. is poised to become a net exporter of liquefied petroleum gases for the first year ever as shale-based energy production jumps, prompting new orders for specialized ships to haul propane and butane.

Daily LPG shipments equated to a record 194,000 barrels in last year's first 11 months, outpacing imports at 169,700 barrels, U.S. Energy Information Administration figures show. That's the first time the country was a net exporter in records going back to 1973, according to data compiled by Bloomberg.

Total seaborne trade in LPG will come to 100.6 million metric tons this year, up about 16 percent from 2010, estimates by German transportation lender DVB Bank SE show. U.S. exports will exceed 5 million tons this year, against 3.7 million tons in 2012, before reaching 7 million tons next year, London-based shipbroker Braemar Seascope Ltd. predicts.

"After that, it's anybody's guess," Nick Wright, a shipbroker at Braemar who specializes in organizing charters for gas carriers hauling LPG, said by phone Feb. 13. "Some have predicted they'll be as much as 20 million tons by 2020."

LPG is a byproduct from refining oil and purifying natural gas, according to the EIA. Hydraulic fracturing, known as fracking, of shale rock formations from Texas to West Virginia has boosted U.S. supplies of gas. LPG, used to manufacture petrochemicals and also for heating and cooking, is converted to liquid form for shipping by pressurization and cooling to minus 42 degrees Celsius (minus 44 degrees Fahrenheit).

More Vessels
Increased U.S. production is leading to orders at shipyards for vessels designed to transport LPG as well as other petrochemical gases including ethane, said Stephen Wilson, director of Braemar Seascope's gas department.

"We are seeing a game-changer because of this era of shale gas," Wilson said in a Feb. 8 interview. "The extra production planned of LPG and petrochemical gases is going to have a major impact, but nobody's 100 percent sure of what types of ships will be needed and numbers required."

BW Group Ltd. has 12 very large gas carriers that haul propane and butane, the biggest fleet, data from IHS Fairplay show. The Bermuda-based shipowner owns 47 gas carriers of all types, according to its website.

Billionaire John Fredriksen was among shipowners who ordered eight VLGCs in the last six months as shipyard prices fell as low as $62 million from the high of $95 million in 2006. Each vessel can hold 80,000 cubic meters (2.83 million cubic feet) of cargo.

2015 Deliveries
The fleet of 150 VLGCs will swell by 13 ships this year and a further 10 in 2014, Braemar's Wright said. Orders for another four vessels have yet to be confirmed, he said, predicting deliveries of the carriers in 2015.

Evergas, a Copenhagen-based shipper of petrochemical gases, last month ordered vessels that can haul ethane or liquefied natural gas from the U.S., Vice President Ralph Juhl said in an interview Feb. 13. He gave no information on the order's size.

Petrochemical manufacturer Ineos Group Holdings will charter the ships, each with a capacity of 27,500 cubic meters, under long-duration accords once they enter service starting in 2015 to transport ethane to Norway from the U.S., Juhl said.

LPG from the U.S. is cheaper than the biggest suppliers in the Middle East, which account for about 35 million tons a year of the estimated 85 million-ton global seaborne trade, according to Braemar.

Benchmark Voyage
The cost to ship 44,000 tons of LPG to Japan from Saudi Arabia, the benchmark route, advanced 0.6 percent to $40.59 a ton, according to the Baltic Exchange, a London-based assessor of freight costs. Rates gained in eight of the 10 sessions so far this month after averaging $38.75 in January, the lowest since October 2010, data compiled by Bloomberg show.

VLGCs will be able to navigate the expanded Panama Canal once wider locks under construction open in 2015, according to Braemar. Access to the waterway linking the Atlantic and Pacific oceans will shorten voyage times, in turn cutting shipping costs and reducing the expense of exporting LPG to Asia from the U.S., the shipbroker says.

 

Permalink Reply by Jack Straw on February 18, 2013 at 1:46pm

Source: http://canadafreepress.com/index.php/article/53205

Shale Gas, Hydraulic Facturing, Fracking, Keystone XL Pipeline

The Irony of Green Propaganda

 

- Dr. Ileana Johnson Paugh (Bio and Archives)  Monday, February 18, 2013

-------------------------------------------------------------------------------

The supporters of global warming met in Washington, D.C. on February 17, 2013 to pressure President Obama to stop the Keystone XL pipeline. The irony was evident to the rest of us. The green environmentalists were bundled up to their eyeballs since it was the coldest day this winter, 16 degrees Fahrenheit if you factored in the wind chill.

 

Protesters claim that oil sands, fracking, fossil fuels, and especially “dirty” coal are the enemy of ordinary Americans while the same Americans are fed up with paying unnecessary high prices for gasoline and electricity when our country has such vast resources of oil and natural gas that are not being tapped.

 

I wonder if Europeans knew in 1300-1850 that their Little Ice Age was caused by human activity since global warming alarmists were not around to inform them and force them to change their planet-altering life-style.

 

In the Blitzkrieg of constant manufactured crises, the media machine is deflecting people’s attention from the real issues affecting our country. Everyone is overwhelmed by a never-ending string of real and imagined catastrophic occurrences. Citizens seem to have lost the ability to judge for themselves and discern truth from fiction.

 

Bombarded by a deluge of MSM propaganda, low information Americans believed that the passengers suffering inconveniences caused by a disabled cruise ship that had lost its power for five days was akin to hurricane Katrina suffering. Can we have a reality check?

If power outage disabled such a large ship, have irrational lefties asked themselves what would happen to a major city if a massive electricity shortage caused the power to go out for days, weeks, and months? Would solar panels and wind mills restore electricity, clean water, sanitation, sewage disposal, heat, A/C, and normalcy to the city? How many people would die from pestilence alone?

 

The environmentalists demand that the “evil” coal-powered plants be shut down, and many have been shut down, because coal destroys the planet. A large portion of our electricity does come from “dirty” coal. Beloved hybrids and electric cars need fossil fuels and electricity generated by coal, hydro, and nuclear power plants, another industry that progressives want shut down.

 

Then there is the filthy little secret of solar-generated energy. It may be cleaner than coal-generated energy, however, in the production process, solar panel manufacturers create millions of pounds of contaminated water and toxic sludge which must be transported and disposed of hundreds of miles away.

The hazardous waste disposal costs (transportation via rail or trucks which burn fossil fuels) is not included or calculated in the solar panels carbon footprint. The polluted sludge is shipped because new solar panel manufacturers have not built facilities to recycle part of the sludge and to dispose of the carcinogenic cadmium properly.

 

Dustin Mulvaney, an “environmental studies professor who conducts carbon footprint analyses of solar, biofuel and natural gas production,” calculated that shipping 6.2 million pounds of waste by eighteen wheelers from California to a site 1,800 miles away would add 5 percent in carbon footprint.

 

Jason Dearen, of the Associated Press, compiled a list of 41 California manufacturers of solar panels and reported that no such data exists at the federal level.

“The state records show the 17 companies, which had 44 manufacturing facilities in California, produced 46.5 million pounds of sludge and contaminated water from 2007 through the first half of 2011. Roughly 97 percent of it was taken to hazardous waste facilities throughout the state, but more than 1.4 million pounds were transported to nine other states: Arkansas, Minnesota, Nebraska, Rhode Island, Nevada, Washington, Utah, New Mexico and Arizona.” (Jason Dearen)

 

Does creating 100 Megawatt of energy to power 100,000 homes (as the now bankrupt Solyndra did) balance out the 12.5 million pounds of hazardous waste that could seep into our drinking water? Yet Mulvaney said that coal-fired plants and natural gas plants create more than ten times the hazardous waste created by a solar panel.

 

One problem not addressed in calculations is the fact that solar panels need thousands of acres of land to display them, land that cannot be used for agriculture. Wind energy generation is problematic because huge wind mills kill a lot of birds and the noise pollution created is unbearable and unacceptable in populated areas when the wind exceeds 30 mph. Wind mills do not create electricity when idle and need back up from conventional power just like solar panels.

 

This brings me back to the war on coal waged by environmentalists and their powerful lobby. In 2012, the electricity generated from coal was 36% compared to the previous year of 44.6%, a considerable drop caused by the unprecedented regulatory assault on coal.

 

PJM Interconnection, which operates power for 13 states (Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia), held its 2015 capacity auction.

President Obama’s promise that “electricity prices will necessarily skyrocket” is coming to fruition. According to A.J. Cameron, “The market-clearing price for new 2015 capacity – almost all natural gas – was $136 per megawatt,” eight times higher than the 2012 price of $16 per megawatt. New Jersey, Delaware, Pennsylvania, and D.C. price is $167 per megawatt. First Energy’s price in northern Ohio is $357 per megawatt. Ohio has more forced coal-fired plants shutdowns thus the higher price.

Why are prices so much higher? Andy Ott of PJM explains, “Capacity prices were higher than last year’s because of retirements of existing coal-fired generation resulting largely from environmental regulations which go into effect in 2015.”

 

The Environmental Protection Agency regulators are winning the war on coal and most Americans are going to suffer, including the clueless greens.

 

“The PJM auction forecasts a dim future where Americans will be paying more to keep the lights on. We are seeing more and more coal plants fall victim to EPA’s destructive regulatory agenda, and as a result, we are seeing more job losses and higher electricity prices.” (Ed Whitfield, House Energy and Power Subcommittee Chairman)

 

British Petroleum published a report with projection of long-term energy trends, “Energy Outlook 2030,” in which it predicted that the United States will be 99 percent energy self-sufficient by 2030 due to shale gas and oil produced by hydraulic fracturing. “It could result in a re-industrialization of the U.S.” Being more skeptical, I believe that it could happen if the EPA would lessen its onerous regulatory stronghold on economic development.

 

“The natural gas boom in America will also lead to a significant reduction in greenhouse gases, since natural gas-fired power plants produce around half as much carbon emissions as coal-fired plants, and just 1 percent as much sulfur oxide.” (Newsmax, February 3, 2013)

 

As long as the President is in brilliant campaign mode, he can divorce himself from reality and pretend he is trying to solve the very problems he has created by blaming President Bush and the rich and greedy people. He has not solved any problems but has been quite successful in convincing a majority of Americans that he has. In the meantime, progressives push renewables and the misery and costly war on coal continues.

 

Listen to Dr. Paugh on Butler on Business (WAFS 1190), every Wednesday at 10:49 AM EST

Dr. Ileana Johnson Paugh, (Romanian Conservative) is a freelance writer (Canada Free Press, Romanian Conservative, usactionnews.com), author, radio commentator (Silvio Canto Jr. Blogtalk Radio, Butler on Business WAFS 1190, and Republic Broadcasting Network), and speaker. Her book, “Echoes of Communism, is available at Amazon in paperback and Kindle. Short essays describe health care, education, poverty, religion, social engineering, and confiscation of property. A second book, “Liberty on Life Support,” is also available at Amazon in paperback and Kindle. A third book, “U.N. Agenda 21: Environmental Piracy,” is a best seller at Amazon.com under Globalism, Politics, and Environmental Policy.

Her commentaries reflect American Exceptionalism, the economy, immigration, and education.Visit her website, ileanajohnson.com.

Dr. Johnson can be reached at: ileana@canadafreepress.com

Permalink Reply by Jack Straw on February 27, 2013 at 11:12am

 

Source: http://pdf.reuters.com/pdfnews/pdfnews.asp?i=43059c3bf0e37541&u...

Westport Launches Ford F-450 and F-550 with Bi-Fuel Westport WiNG™ Power System at NTEA Show

PR Newswire

VANCOUVER, Feb. 27, 2013

VANCOUVER, Feb. 27, 2013 /PRNewswire/ - Westport Innovations Inc. (TSX:WPT / NASDAQ:WPRT), the global leader in natural gas engines, today announced that its proven Westport WiNG™ Power System, a compressed natural gas (CNG) bi-fuel system, will be available for order on the Ford F-450 and F-550 Super Duty Chassis Cab trucks starting April 1, 2013. The trucks will make their debut at next week's National Truck Equipment Association Work Truck Show in Indianapolis, Indiana.

Assembled alongside the popular Westport powered Ford F-250 and F-350 trucks at the Westport Kentucky Integration Center (WKIC), a Ford Qualified Vehicle Modifier (QVM) audited facility, the new F-450 and F-550 trucks have undergone the same rigorous testing for safety and durability used by Ford for all its original equipment manufacturer (OEM) products. With the WKIC located adjacent to Ford's Kentucky Truck Plant, the 2013 F-450 and F-550 trucks will use the same integrated transportation system as other Westport powered Ford products to reduce delivery costs to the customer.

Available exclusively for order at Westport authorized Ford dealerships, the Ford F-450 and F-550 Super Duty Chassis Cab trucks with the Westport WiNG Power System are delivered key-READY™ to customers and come with a warranty that matches the Ford warranty for all similar powertrain and emissions components.

"The expansion of our product line builds upon our proven technology of the Westport WiNG Power System and extends our product availability to a different end user," said John Lapetz, Vice President Westport LD and Managing Director, North American Vehicle Programs. "With a higher degree of application flexibility and increased gross vehicle weight, the Ford F-450 and F-550 Super Duty trucks allow us to grow a solid footprint with customers who were not serviced with the Ford F-250 and F-350 CNG bi-fuel trucks."

The new Ford F-450 and F-550 Super Duty trucks with the Westport WiNG Power System are an ideal application for fleets in natural resource industries, construction, delivery, public utilities as well as government and transit operators. The trucks offer fleets the opportunity to use a cleaner, domestic fuel that offers savings between 30 to 60 percent with payback demonstrated in as little as two years.

For commercial fleet customers that require the Ford F-450 and F-550 Super Duty Chassis Cab trucks to be equipped to handle various jobsite environments, commercial vehicle bodies can be used with the Westport WiNG bi-fuel system.

"In partnership with service body companies based in Louisville, Kentucky, Westport will integrate the Westport WiNG Power System on the Ford F-450 and F-550 trucks with second unit bodies," said John Howell, Senior Director, Marketing, Westport. "Many standard configurations exist for bodies with a minimum of 84CA used in combination with a tank pack and custom bi-fuel configurations can be engineered for virtually any second-unit body with a minimum order of 10 units."

Starting at an industry leading price of $9,500, the Westport WiNG Power System is integrated on the 6.8-liter V10 engine of the Ford F-450 and F-550 trucks and offers a combined fuel range of approximately 650 miles (at nine MPG) with maximum CNG capacity (42 gasoline gallon equivalent) and a standard 40-gallon gasoline tank capacity. For customers who want to eliminate the anxiety of operating on natural gas only, the Super Duty trucks with the Westport system will run on conventional gasoline once the CNG fuel is depleted.

About Westport Innovations Inc.
Westport Innovations Inc. is a leading global supplier of proprietary solutions that allow engines to operate on clean-burning fuels such as compressed natural gas (CNG), liquefied natural gas (LNG), hydrogen, and renewable natural gas (RNG) fuels such as landfill gas and help reduce greenhouse gas emissions (GHG). Westport technology offers advanced LNG fueling systems with direct injection natural gas engine technology for heavy-duty vehicles such as highway trucks and off-road applications such as mining and rail. Westport's joint venture with Cummins Inc., Cummins Westport Inc. designs, engineers and markets spark-ignited natural gas engines for North American transportation applications such as trucks and buses. Westport is also one of the global leaders for natural gas and liquefied petroleum gas (LPG) fuel systems technology, design, and components in passenger cars, light-duty trucks and industrial applications such as forklifts. To learn more about our business, visit our website or subscribe to our RSS feed at www.westport.com, or follow us on Twitter @WestportDotCom.

Note: This document contains forward-looking statements about Westport's business, operations, technology development or the environment in which it operates, which are based on Westport's estimates, forecasts and projections. These statements include specifically, statements regarding the timing for introduction of the natural gas versions of the Ford F-450 and F-550 trucks, the price of natural gas and savings and payback period based on a conversion to natural gas as a transportation fuel. These statements are not guarantees of future performance, are based on a number of assumptions and involve known and unknown risks and uncertainties that are difficult to predict, or are beyond Westport's control including the development of competing products and technologies, availability and supply of natural gas, price and supply of gasoline, timing for certifications, timing of execution of agreements with distributors, and other risk factors and assumptions that may affect our actual results, performance or achievements. Consequently, readers should not place any undue reliance on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Westport disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by National Instrument 51-102. The contents of any website, RSS feed or Twitter account referenced in this press release are not incorporated by reference herein.

SOURCE Westport Innovations Inc.

 

Permalink Reply by Jack Straw on March 4, 2013 at 11:05pm

Source: http://www.reuters.com/article/2013/02/28/china-lng-transport-idUSL...

A sad reality, the Chinese Government are becoming better capitalists than the US Government.

 

China's natural gas drive may cut oil demand by a tenth

Thu Feb 28, 2013 4:05pm EST

 

* Nearly 1.5 million natural gas vehicles on the road

 

* Could replace equivalent of 840,000 bpd of oil by 2030

 

* Part of plan to increase gas use nationwide

 

By Chen Aizhu

 

BEIJING, March 1 (Reuters) - China's drive to fuel more vehicles with cleaner-burning natural gas could reduce oil demand by nearly a tenth - equivalent to Turkey's total oil consumption - and may help ease its cities' toxic smog problem, too.

 

The country's rise to become the world's biggest car market has seen rapid growth, too, in oil demand over the past decade, and has contributed to the heavy pollution that chokes its cities. China is now the world's second-largest oil consumer after the United States, burning some 9.6 million barrels per day (bpd) - more than a tenth of global demand.

 

A Beijing-coordinated campaign to fuel more vehicles with natural gas - part of a drive to reduce costly oil imports and a dependency on coal - could increase gas consumption to as much as 55 billion cubic metres by 2030, predicts energy consultancy Wood Mackenzie - about equal to 840,000 bpd of oil.

 

That's about 10 times more natural gas than is used in vehicles today, and close to 9 percent of China's oil demand.

 

HAILING COST BENEFITS

 

Taxi drivers have been quick to see the financial benefits, too, of switching to natural gas.

 

The cleaner fuel is 50-70 percent the price of gasoline and a third cheaper than diesel - savings that have encouraged rapid take-up of natural gas among drivers, and enough to make people like Yu Binghua queue for up to five hours to fill his Volkswagen Jetta taxi.

 

Yu works in Jiuquan, a city of 400,000 people on the edge of the Gobi desert in China's remote northwest, where all 800 municipal taxis run on gas. A first filling station was built three years ago, Yu said, and a fourth is under construction.

 

"The money I save is the money I make," the 32-year-old cabbie said by telephone.

 

While a gas engine can cost almost twice as much as a diesel engine, the payback through using cheaper fuel is just 8 months, said Shao Sidong, president of Westport-Weichai, a diesel engine maker which now also manufactures gas engines.

 

The push to natural gas comes also as efforts by Beijing to develop the electric car market, through heavy subsidies, have failed to spark, partly because battery costs remain high and charging facilities are few. Experts say electric cars lack mass appeal as they are either too costly for many or not stylish enough for the wealthy.

 

CAN INFRASTRUCTURE KEEP UP?

 

China last year had 1.48 million vehicles driving on natural gas, up 48 percent on the previous year, and a huge jump from just 6,000 in 2000, according to leading oil and gas producer China National Petroleum Corp's (CNPC) research institute.

 

The vehicles - mainly taxis, buses and trucks - run on both compressed natural gas (CNG) and liquefied natural gas (LNG). LNG, gas that is super-chilled to liquid form, is more efficient and can nearly treble a vehicle's driving range over CNG, say experts. That is encouraging the roll-out of more LNG vehicles. At the end of last year, there were 70,000 LNG vehicles on China's roads and 400 LNG stations, the CNPC has reported.

 

Beijing in October targeted China's vast transport sector - from buses and trucks to taxis and ships - as a preferred user of natural gas.

 

More than 30 automakers in China make natural gas vehicles, China's Association of Automobile Manufacturers (CAAM) said, led by Shanghai Volkswagen Automotive Co Ltd - a joint venture between Volkswagen AG and Shanghai Automotive Industry Corp (SAIC) - Chongqing Changan Automobile Co Ltd and Zhengzhou Yutong Bus.

 

The rapid growth in natural gas powered vehicles brings with it the challenge of building an infrastructure to ensure Yu and other drivers across China can fill up their cabs and buses as easily as with gasoline or diesel. For now, natural gas vehicles are mainly found in areas that produce natural gas, in China's west and south west.

 

OLD KING COAL

 

The world's top energy consumer, China is the fourth-largest gas user and aims to triple natural gas use to meet about 10 percent of total energy demand by 2020. The take-up in gas will mostly make inroads into consumption of coal.

 

Beijing is working to boost domestic gas supply, but consumption is growing at such a clip that China is becoming increasingly reliant on LNG imports. State oil giants have struck long-term deals with global LNG suppliers to meet future import needs, with Australia supplying the most.

 

In a national new energy vehicle development plan released last June, Beijing called for alternative fuels, mainly natural gas, to replace at least 10 percent of transportation fuel by 2015. The natural gas industry, pioneered by small, independent firms such as Xinjiang Guanghui Group, has been given added momentum as bigger state oil companies have stepped in.

 

"The growth is driven by regulated fuel prices, the environmental imperatives and the national oil companies' efforts to support the use of natural gas in vehicles," said Zhou Yingying, China gas market analyst at Wood Mackenzie.

 

LNG emits 28 percent less carbon dioxide and 90 percent less sulfur dioxide than gasoline and diesel, according to industry reports.

 

PETROCHINA MUSCLE

 

State-owned energy giant PetroChina has increased its role in the LNG vehicle industry through wholly-owned unit Kunlun Energy, previously a niche upstream oil producer that now runs import receiving terminals, wholesale distribution and retailing. It also helps retrofit and convert vehicles to natural gas.

 

Kunlun Energy has two LNG import terminals on China's east coast with combined annual capacity of 6.5 million tonnes. It also owns and plans a string of inland liquefaction facilities near PetroChina's domestic gas fields that could supply another 6 million tonnes of LNG a year by 2015, industry officials said. That combined 12.5 million tonnes a year would amount to 12 percent of China's existing gas market.

 

The smaller liquefaction plants are near domestic fields and have mushroomed across China in the past decade. They liquefy gas from fields not located on the national pipeline grid, and target the transport sector.

 

Last year alone, Kunlun helped put 28,000 LNG vehicles on the road, up from just 2,000 the previous year, and aims to boost that to 200,000 by 2015. The company worked with local authorities to put more LNG buses on the road and also struck deals with logistics firms and bulk diesel users such as cement plants to switch fuel for heavy-duty trucks.

 

 

Permalink Reply by 015334grltd9m on March 5, 2013 at 7:46am

This is why China like Japan who we converted to capitalism must remain an ally.

Permalink Reply by Jack Straw on March 5, 2013 at 11:52am

Source: http://online.wsj.com/article/SB10001424127887324539404578340720866...

 

Shell to Build LNG Fuel Plants in U.S., Canada

By TOM FOWLER

Royal Dutch Shell PLC will build plants in Louisiana and Canada to produce liquefied natural gas as a fuel for heavy trucks and large ships, the company said Tuesday.

The LNG terminals are among the latest efforts by energy companies to create greater demand for what is now a glut of natural gas in North America.

Shell, one of the largest gas producers in the U.S., will build the facilities in Geismar, Louisiana, along the Mississippi River south of Baton Rouge, and in Sarnia, Ontario, on the southern shore of Lake Huron just east of Michigan. Each plant will be able to produce 250,000 tons per year of LNG by chilling natural gas to negative 260 degrees so it can be compressed into a liquid and stored in high-pressure insulated tanks.

The facilities will be relatively small compared with other natural gas liquefaction terminals around the world, such as those in Qatar, but they will represent a doubling of the liquefied-gas manufacturing capacity in the U.S. and Canada, said James Burns, Shell's general manager for LNG fuels in the Americas.

Natural gas is used as a transportation fuel in some parts of the world, mostly for fleets of vehicles like buses and garbage trucks which use centralized refueling stations. Compressed natural gas is more widely used than LNG, but LNG has proven to be effective for very large trucks that drive great distances.

Few ships now run on LNG, according to The Lloyd's Register Group. But the fleet is expected to grow because of increasing environmental restrictions in the most polluted ports and the improving cost competitiveness of LNG compared with oil.

A Great Lakes cargo-ship operator has signed on as a future LNG customer, Mr. Burns said. Shell is also planning to operate three supply vessels in the Gulf of Mexico that will run on LNG, and it is in the process of converting some of its land-based drilling rigs to run on the fuel, rather than diesel.

The facilities are expected to take about three years to complete. Shell would not disclose the cost of the projects.

Write to Tom Fowler at tom.fowler@wsj.com

 

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