THROUGH A DARK GLASS AT NATURAL GAS: NIMBY BYPASS

Natural gas is not CLEAN energy, but it is CLEANER than coal or oil. Which is why it makes sense as an interim measure in the move toward 21st century energy. The problem is that U.S. supplies are peaking.

But the oil and gas industry, one of the nation’s most competent, has a solution: Imports from foreign fields. The industry has even resolved the obstacle of transport by working out how to liquefy the gas, bring it into the country in tankers, and regasify it for pumping in existing pipelines.

The new problem: Nobody wants such a facility in their neighborhood. (NIMBY: Not In My BackYard) One story below recounts the Port of Long Beach’s refusal to even do the environmental impact studies. An April 3 story not linked here reported that Delaware took their case against a proposed LNG facility to the Supreme Court to stop it.

But the oil and gas industry solved that one, too: Floating offshore plants.

A new one has been approved for Long Island Sound to serve the NYC metro area. FERC took massive public input on the project’s need, environmental impact, public safety/security and on possible Long Island Sound impacts. The review took 38 months and 25,000 staff hours. They put it 10 miles out in the Sound.

So there will be a facility 10 miles off NYC but not one in the middle of L.A.’s Port of Long Beach. Meanwhile, a facility in Ensenada, Mexcio, will open for business this spring. It was green lighted and installed with relative ease. It will distribute natural gas throughout the Southwest. It's Mexico's problem.

Through a dark glass, a picture is emerging of a big nation, hungry for energy and unwilling to look its appetite in the eye. There’s a word for that: Denial. It’s not a pretty picture.

Natural gas is vital in U.S. life. (click to enlarge)

Sempra LNG terminal at Ensenada nears completion
Eric Watkins, March 24, 2008 (Oil & Gas Journal)
and
Misubishi unit’s Long Beach LNG terminal dealt legal blow
Eric Watkins, March 24, 2008 (Oil & Gas Journal)
and
FERC approves US’s first floating LNG terminal
Nick Snow, March 24, 2008 (Oil & Gas Journal)

WHO
Sempra Energy; ICA Fluor: Mitsubishi Corp. subsidiary Sound Energy Solutions (SES) (Tom Giles, executive vice-president); US Federal Energy Regulatory Commission (FERC) (Joseph T. Kelliher, Chairman)

An LNG carrier. (click to enlarge)

WHAT
- Energia Costa Azul import and regasification planned LNG import terminal should be up and running soon, the first LNG receiving terminal on North America's West Coast.
- SES is reconsidering its options for an LNG regasification terminal in the Los Angeles region following an apparent legal reversal, the termination of the environmental review of the proposed SES LNG terminal.
- FERC approved Broadwater Energy LLC's application to build the first floating LNG terminal in the US.

WHEN
- Energia Costa Azul up and running during the second quarter.
- Mar. 17 ruling deferring the Port of Long Beach project is to be filed April 9. SES has 60 days to respond.

click to enlarge

WHERE
- Energia Costa Azul is near Ensenada on Mexico's Pacific coast, capable of supplying gas markets in the southwestern US and Mexico.
- SES would build at the Port of Long Beach
- The Broadwater terminal will be in Long Island Sound, 9 miles off the coast of Riverhead, in Suffolk County, NY, and 10.2 miles from the nearest onshore point in Connecticut. It will serve New York City, Long Island, and Connecticut energy needs.

WHY
- Energia Costa Azul $945 million plant w/processing capacity of 1 bcfd natural gas, to be expanded later to 2.5 bcfd.
- The engineering firm ICA Fluor will build nitrogen injection to produce as much as 18 million scfd of nitrogen at the plant.
- ICA Fluor will also build a 26-Mw power generation facility to complement the existing capacity at the plant.
- Los Angeles Superior Court Judge James Chalfant upheld a 2007 ruling giving the Port of Long Beach the right to stop its environmental study, effectively ending progress toward building an LNG facility.
- SES wanted a 25-year lease at the port to build an $800 million, 1 bcfd LNG facility for regasification and shipping with some harbor and local distribution.
- Broadwater Energy agreed to more than 80 mitigation measures to enhance safety and security and minimize environmental impacts.
- The project will provide up to 1.25 bcfd of regasified LNG to electric power plant and home heating customers. It will have 8 LNG storage tanks w/8 bcf of regasified LNG storage capacity, a regasification plant, and a 21.7-mile long pipeline from the terminal to a subsea interconnection w/Iroquois Gas Transmission System to bring the gas onshore.

With oil supply peaking and coal disdained, this could be the natural gas moment. (click to enlarge)

QUOTES
John Hritcko, senior vice-president, Broadwater: "[The LI Sound floating LNG terminal will be] an important step forward in bringing new, clean, reliable natural gas supplies to a region where prices are volatile and climbing, air quality is a concern, and [which] is located at the end of the pipeline delivery system."