Japan Quake Is Causing Costly Shift to Fossil Fuels: New York Times

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New York Times
Japan Quake Is Causing Costly Shift to Fossil Fuels

Japan, the world’s third-largest user of electricity behind China and the United States, had counted on an expansion of nuclear power to contain energy costs and greenhouse gas emissions. Instead, its nuclear program is in retreat, as the public and government officials urge a sharp reduction in the nation’s reliance on nuclear power and perhaps an end to it altogether.

As its nuclear program implodes, Japan is grappling with a jump in fuel costs, making an economic recovery from the March earthquake and tsunami all the more difficult. Annual fuel expenses could rise by more than 3 trillion yen, or about $39 billion, the government says….

Prime Minister Naoto Kan has called for a gradual move away from nuclear energy, and proposed a goal of generating 20 percent of Japan’s electricity from renewable sources, including hydroelectric plants, by the early 2020s. The Parliament is debating legislation to spur that change…

Japan’s liquefied natural gas imports have jumped for three consecutive months, squeezing global supplies amid strong demand from China and other emerging economies…

NEB gets ready for BC LNG hearings, first step for second Kitimat project


The National Energy Board has announced it will hold hearings on the second proposed liquified natural gas project, saying, the hearings will “consider an application submitted by BC LNG Export Co-operative LLC (BC LNG) for a 20-year licence to export liquefied natural gas (LNG)
from Canada to Pacific Rim markets.”

Once again under the NEB’s rules of procedure, the hearings will be limited to granting the export licence, with or without conditions and will follow the so-called “market-based procedure” set up for the NEB after deregulation of the oil and gas industry in the late 1980s.

This application is based on projections that the demand for natural gas in Pacific Rim markets will continue to increase substantially over the next 20 years. In its application, BC LNG is requesting authorization to export up to 1.8 million tonnes of LNG annually.

The Board will consider, among other issues, the export markets and natural gas supply, the transportation arrangements, and the status of regulatory authorizations.

However in an apparent departure from the KM LNG hearings where energy lawyers challenged environmental and social issues as not included in the mandate for those hearings, these ground rules say they are now”

The Board will also consider the potential environmental effects of the proposed exportation, and any social effects directly related to those environmental effects.

The public has until Sept. 11, 2011 to register with the board for full intervenor status, request to make an oral statement or to submit a letter of comment.

Letter from NEB to BC LNG (pdf)

KM LNG final arguments set for Thursday in Calgary

The National Energy Board panel hearing KM LNG’s (also known as Kitimat LNG) application for an natural gas export licence will hear final arguments from the lawyers for the various parties at the NEB offices in Calgary beginning at 9:30 a.m. MT Thursday.

The hearings which began in Kitimat in June, resumed Wednesday in Calgary.  Most of the day was spent with testimony and discussion about how various regulations in a number of countries could affect the Kitimat project.   Some witnesses testified that the Asian countries which could be the prime market for any liquified natural gas exported through Kitimat are nervous about the reporting and disclosure requirements required by some Canadian regulations.  There could be conflicts between those regulations and the customers desire to keep some information proprietary and confidential or, in cases where the LNG is purchased by a national government that government’s national security practices may also prevent some disclosure.  Some witnesses worried that the Canadian requirements just might be a deal breaker for some Asian customers who want ease of access as well as security of supply and thus would not want to be tangled in red tape.

 There was also some discussion of the need to reconcile the Canadian reporting requirements with those the US Securities and Exchange Commission.

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Kitimat LNG hearings to resume in Calgary July 13

The KM LNG (also known as Kitimat LNG) hearings for an export licence will resume before a National Energy Board panel in Calgary on Wednesday July 13, and run to Friday,  July 15, the NEB has announced on its website.

This phase of the hearing will consider “the potential environmental effects of the proposed exportation and any social effects that would be directly related to those environmental effects, including any such effects to aboriginal interests”, and “consultation with the public and aboriginal peoples.” 
 But it appears that the NEB is using its procedures to block consultation with some “aboriginal peoples,” the Coast First Nations. In a letter on its website, the NEB says that an early June submission from Art Sterritt,the Executive Director of the Coast First Nations came too late, since the deadline for submissions was April 26. That means the First Nations group must present a motion before the board panel asking to be heard.

Australia, Canada rivals in “new frontier” of liquified natural gas

Canada and Australia are rivals in the “new frontier” of liquified natural gas export sales to Asia, a panel of energy marketing executives told the National Energy Board Tuesday at hearings into the KM LNG in Kitimat.

The “marketing panel” testifying before the board included Kenny Patterson, Vice President LNG Marketing and Shipping for Apache Energy, Sean Bolks, Apache Director of Corporate Risk Management, Jamie Bowman, Vice President of Marketing for EOG and David Thorn,Vice President, Canadian marketing for Encana and two consultants.

Patterson told the NEB at more than one point during his testimony that Canada was the “new frontier” for liquified natural gas, and so was attracting a good deal of interest from countries across East Asia who need more natural gas supplies.

Patterson and the other executives on the panel refused to be specific on who the customers actually are, despite cross-examination from NEB counsel Parvez Khan and additional questions from the NEB presiding member Lynn Mercier.

Patterson said Apache couldn’t go into individual buyers, so Khan asked: “How many different buyers n a general sense?” to which Patterson replied that in Asia, the KM LNG partners, which include Apache, EOG and Encana, were general discussions with seven to eight major Asian LNG companies as well as other smaller players.

That answer came despite the fact that earlier in the day in Kuala Lumpur at the Asia Oil and Gas Conference, Mate’ Parentich, general manager of LNG marketing at Apache, said the company would soon conclude talks on the sale of 85 percent of liquefied natural gas from the Kitimat terminal.

Asked for specifics by Bloomberg News, a Houston based Apache spokesman Bill Mintz then said that no binding contracts had yet been signed for the Kitimat project.  

Bloomberg later moved a corrected and updated version of the story, including the statement that no contracts have yet been signed.

Khan asked about one Memorandum of Understanding signed with KM LNG. Again the panel refused to be specific. Bowman said the MOU had been signed with the previous partnership in KM LNG and while the MOU had not yet expired, it was subject to further negotiations. 

Khan and Mercier were both aware that any agreements with potential buyers were “subject to regulatory approval,” which, of course, is the National Energy Board’s role, but again they were unable to drag any specifics out of the executives on the marketing panel.

The panel members told the NEB members that Korea and Taiwan are already well established LNG markets and China was beginning to be more aggressive as an LNG buyer. Japan, which was devastated by the earthquake in March and lost of a lot nuclear powered electrical generation capacity is now scrambling to catch up with its Asian neighbors. The executives told the NEB panel that both Indonesia and Malaysia will also become more important buyers for LNG in the Canadian market as their domestic demand grows.

Noting that Patterson is based in Perth, Australia, Mercier asked the executives about the recent announcement by Shell that it would build a floating LNG platform off Australia.

Panel members replied that the Asian markets want long term, secure sources of supply, with multi-billion dollar contracts for between 10 and 20 years. As stable, market-driven countries with ample supplies of natural gas, both Canada and Australia could fulfill those needs, panel members said. Companies operating in both countries would require those multi-billion, multi-year contracts to justify the investment in natural gas extraction and transportation.

Jamie Bowman, Vice President of Marketing for EOG  listens as fellow panel members testify before the NEB. (Robin Rowland/Northwest Coast Energy News)