US LNG Exports Hit New Record Highs

Guest “Frac on!” by David Middleton

Some LNG Basics

Liquefied Natural Gas (LNG)
Office of Fossil Energy and Carbon Management

Today, the United States is the world’s largest producer of natural gas.  Natural gas supplies about 1/3 of the United States’ primary energy consumption,  with its primary uses being heating and generating electricity.  While the majority of natural gas is delivered in its gaseous form via pipeline in the United States, the growth in the international market for natural gas has given rise to the use of natural gas in a liquefied form, or LNG.

LNG Basics

Liquefied natural gas (LNG) is natural gas that has been cooled to a liquid state, at about -260° Fahrenheit, for shipping and storage. The volume of natural gas in its liquid state is about 600 times smaller than its volume in its gaseous state. This process makes it possible to transport natural gas to places pipelines do not reach.

Liquefying natural gas is a way to move natural gas long distances when pipeline transport is not feasible. Markets that are too far away from producing regions to be connected directly to pipelines have access to natural gas because of LNG. In its compact liquid form, natural gas can be shipped in special tankers to terminals around the world.  At these terminals, the LNG is returned to its gaseous state and transported by pipeline to distribution companies, industrial consumers, and power plants.

LNG Trade

For large-volume ocean transport, LNG is loaded onto double-hulled ships, which are used for both safety and insulating purposes. Once the ship arrives at the receiving port, LNG is off-loaded into well-insulated storage tanks, and later regasified for entrance into a pipeline distribution network.

LNG can also be shipped in smaller quantities, usually over shorter ocean distances. There is a growing trade in small-scale LNG shipments, which are most commonly made using the same containers used on trucks and in international trade, specially outfitted with cryogenic tanks. Other small-scale LNG activities include “peak-shaver” liquefaction and storage facilities, which can hold gas compactly for when it is needed in local markets in the U.S. during times of peak demand.  LNG is also sometimes imported or exported by truck from this kind of facility.

In 2020, the U.S. exported almost 2,400 billion cubic feet (Bcf) of natural gas in the form of LNG in large LNG tanker ships, along with a small quantity shipped by container or in trucks.  In total, as of August 2021, U.S. LNG has been delivered to 40 countries on five continents.  The U.S. also still imports some LNG, mostly to New England, a region of the country constrained by limited pipeline and storage capacity. 

[…]

US DOE

Key Abbreviations

  • LNG: Liquified Natural Gas
  • Bcf: Billion cubic feet
  • FERC: Federal Energy Regulatory Commission
  • Frac, Frac’ing: Related to hydraulic fracturing

LNG: An American Success Story

2 Dec, 2021

US LNG exports hit record highs as global gas crunch persists

Author Corey Paul

Natural gas deliveries to U.S. LNG export terminals surged to record levels in the waning days of November, topping 12 Bcf/d as strong global gas demand continued to incentivize operators to run their facilities at full bore.

Total feedgas deliveries to the six major operating U.S. LNG export facilities hit about 12.1 Bcf/d on Nov. 26 and remained near that level for about two days before dropping to about 11.2 Bcf/d on Nov. 30, according to S&P Global Market Intelligence pipeline flow data. This last number compared to about 10.9 Bcf/d on Nov. 30, 2020, as sector activity rebounded from the impacts of the pandemic.

Average flows for November 2021 exceeded 11 Bcf/d.

[…]

Prices at hubs in every region were down sharply in Dec. 1 trading as mild weather underwhelmed U.S. gas markets, according to Platts.

LNG exports, meanwhile, could continue rising into 2022. In addition to the sixth train at Sabine Pass, Venture Global LNG’s Calcasieu Pass LNG export facility is also undergoing commissioning in Louisiana. The developer has said its facility, which will have an export capacity of about 10 million tonnes per year, could begin producing LNG by the end of 2021. Goldman Sachs commodity analysts recently raised their full-year 2022 projection for U.S. LNG exports by 5 Mt to a total of 82 Mt for the year.

S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.

S&P Global

The skyrocketing growth of US LNG exports has been dazzling.

Source: Graph by the U.S. Energy Information Administration (EIA), based on data from the U.S. Department of Energy’s LNG Monthly, EIA’s estimates for June 2021, and EIA’s Liquefaction Capacity Table. EIA July 27, 2021

US LNG export capacity has grown from about 2 Bcf/d when I authored this 2017 post to greater than 10 Bcf/d in 2021 and is expected to reach 14 Bcf/d by the end of next year.

LNG export terminals, currently under construction, will add an additional 8.4 Bcf/d of export capacity over the next few years and an additional 24 Bcf/d of capacity, as yet not under construction, have been approved by FERC.

Despite, the shamdemic-induced drop in LNG exports in mid-2020, this particular hockey stick didn’t even bend, much less break.

This was a truly remarkable transformation.

What’s not to love about this American success story?

It’s an American success story, therefore…

The climate mob is coming for LNG exports
by Paul H. Tice | October 16, 2021

The current global energy crisis may finally provide the cover that climate activists need to start dismantling the U.S. liquefied natural gas export industry. Even though LNG has been one of the great American success stories of the shale revolution over the past decade, with the U.S. converting almost overnight from a natural gas importer to an exporter and a major player in the global LNG market, environmentalists and Democratic lawmakers have been pressuring the Biden administration since Inauguration Day to institute a ban on LNG exports.

Now with natural gas prices surging and fears of domestic gas shortages growing as we head into winter, there have been similar calls for an LNG export ban from the business community. In a recent letter to the Department of Energy from the Industrial Energy Consumers of America, the corporate lobbying group argued for the curtailment of export volumes from existing facilities and a government halt on permit approvals for all new LNG construction.

[…]

Since LNG exports represent the main source of incremental demand for U.S. natural gas supply — domestic consumption continues to grow at an anemic annual pace — LNG export facilities are the next infrastructure target for the anti-fracking, pipeline-protesting climate mob.

[…]

Washington Examiner

Despite the record-high, LNG exports, the current gas storage volume is right in the middle of the 5-yr range.

While natural gas prices have risen above the shamdemic-induced lows of 2020, they are still well below the highs of the LNG importing era (1995-2009).

US LNG imports peaked in 2007

U.S. LNG imports peaked in 2007

The United States imported very small amounts of LNG until 1995, and then LNG imports generally increased each year until peaking in 2007 at about 771 billion cubic feet (Bcf) and equal to about 17% of total natural gas imports. LNG imports declined in most years since 2007 as increases in U.S. natural gas production and expansion of the natural gas pipeline network reduced the need to import natural gas.

In 2020, the United States imported about 49.2 Bcf of LNG from just four countries. This was the lowest amount since 1996 and equal to about 2% of total U.S. natural gas imports.

The Everett regasification terminal near Boston, Massachusetts, receives most U.S. LNG imports, and in 2020, it receved 60% of total U.S. LNG imports; 95% from Trinidad and Tobago and 5% from Nigeria. New England states: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont, may have significant pipeline constraints when heating demand increases substantially during periods of very cold weather. LNG imports help to meet natural gas demand in New England because the region currently has limited pipeline interconnections with the Northeast and other U.S. natural gas producing regions.

EIA

This bit of left-wing caterwauling is hilarious because Massachusetts is dependent on imported LNG from places like Russia, due to their opposition to pipelines:

APRIL 02, 2021
SENATORS MARKEY AND WARREN TO REINTRODUCE LEGISLATION TO BLOCK INFRASTRUCTURE USED TO EXPORT AMERICA’S NATURAL GAS

COMPRESSOR Act would prevent the operation of the Weymouth compressor station and similar natural gas projects

Washington (April 2, 2021) – Massachusetts Senators Edward J. Markey and Elizabeth Warren today announced the reintroduction of the Community Outreach, Maintenance, and Preservation by Restricting Export Stations from Subverting Our Regulations (COMPRESSOR) Act, legislation that would block the placement into service or operation of any natural gas compressor station that would be built as part of a pipeline project meant to export natural gas. This bill would ban the operation of the controversial compressor station in Weymouth, Massachusetts, which was constructed to facilitate the distribution of natural gas through Massachusetts and export it to Canada.

[…]

Ed Markey

24 Nov 2021 | 21:16 UTC
US senator questions oil and gas companies on rising LNG exports, gas prices

Maya Weber, J Robinson

US Senator Elizabeth Warren has joined those criticizing US energy companies for higher domestic natural gas prices this winter, writing 11 gas companies seeking explanations for exports of record amounts of US natural gas.

[…]

In response to Warren’s letter, API Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola, asserted that US policymakers also play a role in affecting US gas supplies.

“Rising natural gas costs reflect an imbalance between supply and demand that is exacerbated in regions like the Northeast due to added state-level policy restrictions on building much-needed gas infrastructure that has made the region more reliant on foreign imports,” he said.

[…]

S&P Global Platts

Massachusetts is heavily dependent on natural gas and has no reserves or production. The state has no underground storage capacity and is actively hostile toward the construction of natural gas pipelines… But it does have “New England’s only operating LNG import terminals“…

Natural gas

Massachusetts has New England’s only operating LNG import terminals.

Massachusetts does not have any natural gas reserves or production.85,86 The state receives its natural gas supply from interstate pipelines and liquefied natural gas (LNG) import terminals. Pipeline deliveries of natural gas have shifted as production from the Marcellus and Utica shales in the Appalachians has offset shipments from other regions.87 Natural gas also comes from offshore Nova Scotia in Canada.88 In recent years, pipeline infrastructure has been added to transport natural gas deliveries to the Northeast.89 Most of the natural gas that enters Massachusetts by pipeline comes through New York and Rhode Island.90 Additional pipeline deliveries come via a pipeline that traverses Maine and New Hampshire to deliver offshore, onshore, and LNG-sourced natural gas from Canada.91 The natural gas that is not consumed in the state is typically sent by pipeline to Rhode Island and New Hampshire. A small amount is sent to Connecticut.92

Although Massachusetts receives most of its natural gas supplies by pipeline through other states, natural gas also arrives by tanker at the state’s LNG terminals. Massachusetts has the only LNG import terminals in New England, one at Everett on Boston Harbor and two offshore in Massachusetts Bay.93,94,95,96 In 2020, U.S. LNG imports were less than 7% of their 2007 peak.97 However, in 2020, Everett received the most LNG imports of any U.S. terminal, most of it from the Caribbean, and the Everett terminal handled about 60% of all U.S. LNG imports.98,99 The terminal is connected to regional pipelines, a natural gas utility, and a power plant. LNG is also transported by truck to storage tanks for several local natural gas distribution companies. The Northeast Gateway, one of the two offshore terminals, did not receive any LNG imports in 2020. The other offshore terminal, Neptune Deepwater Port, has been inactive since it received initial LNG deliveries at the time of the facility’s completion in 2010. LNG provides more than one-fourth of New England’s natural gas supplies during peak heating demand days in the winter.100,101

Like other New England states, Massachusetts has no underground natural gas storage and depends on storage capacity in other states to meet peak winter natural gas demand for heating and for electricity generation.102 As increasing amounts of natural gas are used for electricity generation in Massachusetts and throughout New England, assurance of natural gas supply remains a critical energy issue for the region.103

In proportion to the state’s share of the region’s population, Massachusetts consumers account for nearly half of the natural gas used in New England.104,105 The residential sector typically accounts for about three-tenths of natural gas consumption in Massachusetts.106 Slightly more than half of households in the state rely on natural gas as their primary energy source for home heating.107 Although the electric power sector has been the largest consumer of natural gas for almost two decades, in 2019 it used less than the residential sector. The amount of natural gas delivered to the electric power sector declined further in 2020, when it fell to its lowest level in two decades.108 The commercial sector and the electric power sector each accounted for slightly less than three-tenths of the state’s natural gas consumption. The industrial sector used slightly more than one-tenth.109

EIA

Talk about Russian collusion!

Dec 10, 2019
Elizabeth Warren’s Massachusetts Loves Natural Gas

Jude Clemente

Elizabeth Warren has pledged to ban fracking when she becomes president of the United States. This would cause real problems for her home state. The Massachusetts economy depends on imported natural gas. In a single year, methane supplies around 465 trillion Btu of energy, or some 50% more than second place gasoline. Massachusetts, however, produces no natural gas itself, making energy imports as integral to the state’s functioning as anywhere.

[…]

Massachusetts though has notorious and severe constraints for gas pipelines. The unwillingness to build more capacity for gas rears its ugly head particularly in winter, when high electricity and heating needs collide. ISO New England has made clear that fuel-security risks, where power plants cannot get the fuel that they need to operate, are the foremost challenge to a reliable power grid. This has helped U.S.-sanctioned Russia, with Vladimir Putin supplying liquefied natural gas into Boston harbor in each of the past two winters. “Why natural gas from Putin’s Russia has to be imported to New England.”

Not just a national security issue, pipelines have much lower greenhouse gas emissions than Putin’s shipped LNG. This indeed all falls in the ridiculous and absurd category because Massachusetts is just a short pipeline away from mighty Appalachia, where Ohio, Pennsylvania, and West Virginia yield nearly 40% of all U.S. gas. The Marcellus shale play in Pennsylvania is probably the largest gas field in the world, even right up there with South Pars shared between Iran and Qatar.

[…]

Forbes

Massachusetts Senators Elizabeth “Liawatha” Warren and Ed “Dumber than a shoe” Markey and everyone who ever voted for them have collectively earned the largest Ron White Lifetime Achievement Award in the history of the known Universe.

You can't fix stupid
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Carlo, Monte
December 6, 2021 6:05 pm

Fauxahantus strikes again.

Scissor
Reply to  Carlo, Monte
December 6, 2021 7:43 pm

I’m heartened that the Shell video is actually pro-fossil fuel. I very much wish my pension to be there when I’m eligible to collect it.

Joel O’Bryan(@joelobryan)
Reply to  Carlo, Monte
December 6, 2021 9:45 pm

Eastern Massachusetts’s liberal establishment demonstrate the Taleb “Intellectual Yet Idiot” phenotype in spades. William Buckley warned 60 years ago about letting any of these intellectual idiots near the centers of political power is happening today.

Yet here we are, through the Left’s lies, half-truths, and omissions, at the brink of a Socialist takeover of the US. Canada and Australia appear already lost with COVID dictatorships.

Joe B
Reply to  Joel O’Bryan
December 7, 2021 12:32 am

JO’B
If you are in the New England region, you may want to check out the ‘announcement’ (warning) from your area’s grid manager … ISO-NE.
They finally publicly acknowledged what many have been shouting for years, to wit, if extended cold snaps occur, be prepared for blackouts.
The next 3 winters, at a minimum, will share this winter time precariousness.

Tom Halla
December 6, 2021 6:30 pm

Repeal the Jones Act, and Massachusetts can import gas from Louisiana, not Russia or Tobago.

Joe B
Reply to  David Middleton
December 7, 2021 1:04 am

4 cargoes of heating fuel and diesel – sourced from Primorsk, Rusia – are arriving at New Haven and NYC right this moment.
The global scarcity of Ultra Low Sulphur heating oil will absolutely crush New England if their gas-fueled power generators cannot get enough fuel … which is a virtual certainty.

Joseph Zorzin
Reply to  Joe B
December 7, 2021 3:23 am

the price of heating fuel here in Corruptachusetts is rising every day- it hit rock bottom under Trump

Joe B
Reply to  Joseph Zorzin
December 7, 2021 1:51 pm

Mr. Zorzin,
Sadly, the high prices are already baked in as Algonquin Citygate January/February pricing is at the $22/mmbtu level … about 7 times higher than what you were paying just this past spring.
These nosebleed costs will show on your monthly bills about March/April 2022.

Perhaps more worrying, your ISO manager – Gordon von Welie – just announced (warned?) yesterday that blackouts may occur if your winter experiences cold snaps.
The next 3 winters – at a minimum – will have these shortfalls.

Joe B
Reply to  Tom Halla
December 7, 2021 12:58 am

Mr. Halla, as a super staunch booster of the American hydrocarbon industry, I could not more strongly disagree.
The Massachusetts folks have stridently shunned US gas despite despite being – literally – a bicycle ride away from the biggest gas resources on the planet.
Their grid manager just announced potential blackouts this winter should cold temperatures arise.

While I have the greatest empathy for the New England folks as they are staring at a cold, dark, busted-water pipe filled season, they have allowed their idiotic ‘leaders’ to bring this situation to a crisis point and they will now reap the whirlwind.
It will only be by crossing the crucible will the necessary vigorous public engagement emerge and a more sane public policy be adopted.

Tom Waeghe
December 6, 2021 6:40 pm

We should be keeping it for ourselves. We’re gonna need it.

Joe B
Reply to  Tom Waeghe
December 7, 2021 1:09 am

Mr. Waeghe
Right now, there is a record amount of feedgas going to the LNG plants.
Over the past few days, Henry Hub pricing has DROPPED from ~$5.60/mmbtu to today’s ~$3.70.

No offense, but armchair myopic economic/trade ‘solutions’ are always … counterproductive.

CD in Wisconsin
December 6, 2021 6:59 pm

Let us remind ourselves here that natural gas is also used in fertilizer production for agriculture…

https://www.marketwatch.com/story/fertilizer-prices-soaring-as-natural-gas-rally-adds-to-perfect-storm-11633699973

“Natural gas is a key ingredient in the process used to make nitrogen-based fertilizers used on a range of crops, including corn and wheat. Natural gas accounts for 75% to 90% of operating costs in the production of nitrogen, Taylor noted.
…..
…..
Nitrogen prices have been correlated, with a lag, to natural gas prices, Taylor said, in a phone interview. That means any run-up in natural-gas prices in the North American market would be poised to add to rising nitrogen prices.

Nitrogen fertilizers are a crucial input for corn and wheat.

Front-month urea futures for delivery at the U.S. Gulf of Mexico traded at $680 a ton on Thursday, up 168.2% from its Dec. 31 level of $253.50 and more than triple its level from 12 months ago, according to Dow Jones Market Data. Anhydrous ammonia prices in the U.S. Corn Belt have also soared, as producers prepare to make fall applications.”

******

So when natural gas prices go up, it would make sense that fertilizer prices will also rise putting upward pressure of agricultural output and prices at the grocery store. The “keep-it-in-the-ground” gang shoot themselves in the foot when they demonstrate their ignorance of all this. God help us.

gbaikie
December 6, 2021 7:09 pm

Better to burn it, then let it seep out.
Our goal should be to lower Methane levels in the atmosphere.
Though having cheap clean energy is better goal- so it’s lowered US
CO2 emission and lower global CO2 emission if we export more of it.

Zig Zag Wanderer
Reply to  gbaikie
December 6, 2021 9:51 pm

Better to burn it, then let it seep out.

Wot?

If you meant “than let it seep out”, I agree.

Our goal should be to lower Methane levels in the atmosphere.

Why? There is absolutely zero threat from methane, capitalised or not.

Though having cheap clean energy is better goal-

Good luck with that. It needs to be reliable too, don’t forget.

so it’s lowered US CO2 emission and lower global CO2 emission if we export more of it.

Why would you need to do that?

Last edited 1 month ago by Zig Zag Wanderer
gbaikie
Reply to  Zig Zag Wanderer
December 7, 2021 9:31 pm

–If you meant “than let it seep out”, I agree.

Our goal should be to lower Methane levels in the atmosphere.

Why? There is absolutely zero threat from methane, capitalised or not.–

If lose 1 billion tons, lose a trillion dollars.
How many trillion of dollars of methane is the world losing of
a very clean and useful fuel?

Pathway
December 6, 2021 7:27 pm

I wonder what happened in 2016 that stimulated the rapid increase in LNG exportation?

Izaak Walton
Reply to  Pathway
December 6, 2021 7:45 pm

Well it would appear that the Obama administration’s decision to approve the Sabine Pass LNG terminal in 2012 finally started paying off. It took 4 years for the terminal to be built and once it was done it started exporting immediately.

Izaak Walton
Reply to  David Middleton
December 6, 2021 8:16 pm

Three FERC commissioners (out of 5) were appointed by the Obama adminstration before 2012 and the link you gave also said that the terminal had to be approved by the DOE as well. So whether or not that counts as being part of the Obama administration is beside the point. Certainly they could have stopped it if they had wanted to.

Derg
Reply to  Izaak Walton
December 6, 2021 8:17 pm

And Benghazi was started by an internet video 😉

Thomas
Reply to  Izaak Walton
December 6, 2021 9:45 pm

Sabine Pass was originally built as an LNG receiving terminal, but it was designed to be reversible, so now it can export.

Bruce Ranta
December 6, 2021 7:52 pm

No, Canadians deserve a Ron White’s blessing. A 100 foot bronzed statue of ‘Can’t fix stupid’ in the middle of Ottawa, with a twin in Montreal, would be nice.

Steve Oregon
December 6, 2021 7:55 pm

Cove Point LNG Terminal has been an immense success story.
https://www.baltimoresun.com/news/investigations/bs-md-japan-lng-20180606-story.html

Bill McKibben et al tried to kill it and failed because Obama, the Democrat Governor and many others supported it and the new pipeline that was added to serve it.
https://www.huffpost.com/entry/dominion-cove-point_n_4831723#comments

Here on the west coast Democrats killed an identical LNG terminal.
https://www.oregonlive.com/business/2021/12/jordan-cove-developers-abandon-plans-for-pipeline-coos-bay-lng-terminal.html

Reply to  Steve Oregon
December 6, 2021 10:30 pm

Jordan Cove is another of those sites that started as import terminals. After the fracking revolution they morphed into export designs.

While at CVX, in 2004, we considered many sites for import terminals along the West Coast. Coos Bay was a possible, as was a site in WA. I spent almost a year looking at sites from Mexico to Canada. It was a fun job that quickly imploded when the fracking supply blossomed in 2005.

I often wonder how Oregonians are going to heat their homes soon, with all the greenie fantasies that go on in their government and populace. Good thing they still have forests.

Joel O’Bryan(@joelobryan)
December 6, 2021 9:34 pm

LNG is the future. In the Western hemisphere, the US gulf coast terminals will dominate for next 20-30 years. Russia’s Nordstream2 ease of access to German markets means Central Europe will become a Russian vassal state.
In Asia, the Timor Sea gas fields are just getting started supplying gas to heavily industrialized S Korea and Japan via the Darwin LNG export terminal. There’s likely plenty more gas fields to be “discovered” in the Timor and Arafura.

Vuk
Reply to  Joel O’Bryan
December 7, 2021 4:44 am

If Vlad the Terrible invades Ukraine, the word from the UK’s FO that Russia’s existing pipeline supplies will be boycotted, i.e. Germans and other Europeans will not buy Russian gas any longer.
Has the US capacity to replace the volume of Russian gas supplies by transatlantic LNG shipping or is it going to let Germans (currently shutting nuclear and coal power stations) to freeze this winter?

c1ue
Reply to  Vuk
December 7, 2021 11:09 am

There are a lot of very dubious assumptions in your post.
1) That Russia has any desire to conquer the neo-Nazi infested Ukraine.
Before Nord Stream, Ukraine was the primary NG transit hub to Europe; that is no longer the case. The other thing Russia wanted to keep was Crimea. The Russian Federation has what it wants – so long as Ukraine doesn’t join NATO, they are satisfied.
2) That the US LNG could even theoretically replace Russian natural gas exports to Europe. Europe consumes over 1 bcm per day; 1 bcm = 35.3 bcf. Thus the entirety of US LNG exports likely would not be able to replace Russian natural gas even if it were 100% directly to Europe
3) That US LNG would go to Europe at all vs. Asia. Japan, for example, has a serious energy problem now that it closed almost all of its nukes due to Fukushima. And being islands, there aren’t really pipelines so they are forced to LNG (and coal). Russia has built and is building pipelines to China but their demand is so enormous that China is “all hands on deck” regarding energy production/import.
4) That Europe could even afford US LNG prices en masse. $30/mmbtu now (referenced below) = >$1 per cubic meter. The deal Moldova signed was for $.79/cubic meter while Gazprom expected to get $0.20 to $0.206 per cubic meter at the start of 2021
https://www.aa.com.tr/en/energy/general/gazprom-plans-gas-exports-of-175-183-billion-cubic-meters-to-europe-in-2021/32744

The energy crunch right now is the only reason LNG is doing well – fortunately for LNG Exporters, that doesn’t look like it will change soon given ESG driven (lack of) investment, but don’t mistake this situation will the energy environment even 3 years ago.

There is potential in Azeri,Qatari, Iranian, UAE, Eastern Med/Libya gas but the geopolitical situation plus the usual f’d up Turkey is a significant barrier.

5) That the UK FO has any credibility whatsoever regarding European . Brexit, remember?

Phillip Bratby
December 6, 2021 10:41 pm

Frack on, Brandon.

Redge
December 6, 2021 11:19 pm

If only fracking wasn’t effectively banned in the UK, we wouldn’t have to rely on importing gas from unstable world leaders

Joe B
Reply to  Redge
December 7, 2021 1:16 am

Redge,
The recoverable natgas from the Bowland and Weald Basins could comfortably supply Great Britain for the next 50 years.
The kneecapping of Cuadrilla’s operation in the Bowland was amongst the most self destructive decisions that I have ever witnessed.

Redge
Reply to  Joe B
December 7, 2021 1:33 am

Unfortunately, the present political elite of the UK are fracking idiots

With the exception of the chosen few and their lackeys, the Greens will not be happy until the world is devoid of man.

bigoilbob
Reply to  Redge
December 7, 2021 5:08 am

Agree. Bans, with no case by case justifications, are not the way to go. Here, most remaining federal lands are goat pasture anyhow. And lease auctions are historically overbid, which helps the treasury. So, except for those wanting to shirk on lease terms (just short of all), and the inevitable begs for royalty reduction later, they are good things.

So, if the UK can assemble the vast infrastructure required to develop these resources responsibly, then they should be able to do so.

But as far as probable outcomes go:

  • The UK resources seem inferior in quality to those here.
  • The UK has almost none of the world leading infrastructure and trained personnel needed to even attempt shale exploitation.
  • Unlike US state and federal environmental, safety and health Ben Dover regulators, the UK would require a uniform regimen of best practices. I.e., minimal methane leakage, adequate haz waste treatment/disposal, rigorous NORM storage/treatment/disposal, asset retirement bonding at more than the tiny fraction now the case here, etc.

KYSO. But while keeping in mind that, even with high product prices, the worlds most vital shale and efficient shale oil and gas industry in now in full Harvest Mode. In toto, every new multilateral is suffering more than the last from frac hits and competitive drainage. Industry activity has been reduced to producing off wells on line, finishing up the lowest hanging drilled but uncompleted wells. drilling just enough to satisfy leasehold obligations, paying out stock holders with dividends and buy backs instead of plowing back in sustainable CAPEX, like for like acquisitions to reduce head counts, and lobbying for a continuation of the gross under bonding of asset retirement obligations that will communize at least 11 figures of USD onto the rest of us. FYI, Joe had nada to do with this. It’s all free enterprise and reservoir engineering/geology…

Joe B
Reply to  bigoilbob
December 7, 2021 2:11 pm

Bigoilbob,
I could not more strongly disagree with virtually all of your points.
The 3 operators currently working the Beetaloo Basin are using onsite veterans from the Marcellus to navigate the ‘growing pains’.
If anything, the astounding pace of US unconventional technology growth will enable a huge ‘leapfrogging/time compression’ effect exactly as the Russians are now showing in the Bazhenov. Cuadrilla could easily be producing from the Bowland by now if absurd regulations did not shut them down.
.5 on the Richter scale is a tiny fraction of the 2.0 regularly recorded by foot stomping football fans.

And, pssst, (furtively looks over both cyber shoulders) … successful EOR is ALREADY being quietly implemented by different operators in both the Bakken and Eagle Ford. Effective injection/control of both field gas and water is showing VERY impressive results.
As a formal acknowledgement of this will prompt seismic leveis of fallout, surreptitious activities are still unfolding.
Look at CLR’s odd, unsolicited Permian purchase from Pioneer as one clue.
For more data, closely study the results of Liberty Resources’ Stomping Horse EOR project.
Hint, it was not stopped due to insufficient supply of natgas.

bigoilbob
Reply to  Joe B
December 7, 2021 2:58 pm

“I could not more strongly disagree with virtually all of your points.”

So, why didn’t you address them? Or provide any evidence that any of them weren’t true? They were all bulleted, and all ignored in your reply.

“And, pssst, (furtively looks over both cyber shoulders) … successful EOR is ALREADY being quietly implemented by different operators in both the Bakken and Eagle Ford. Effective injection/control of both field gas and water is showing VERY impressive results.”

I said nothing about EOR, and you conveniently fail to provide any truth about these “VERY impressive results”. As in, anything beyond the tiny pilots that have been occasionally featured in Gee Whiz power points at investor conferences for years now? But I’m sure they’re on the very cusp of almost, just about, nearly, being commercialized, even as almost every operator is keeping CAPEX at a fraction of what they spent a few years ago, right?.

And thankfully, the UK will certainly require best practices – or as you retag it. “absurd regulations”.

Keep clicking your slippers, eyes closed. I choose to deal in current realities.

Last edited 1 month ago by bigoilbob
bigoilbob
Reply to  bigoilbob
December 7, 2021 3:24 pm

To be fair, you DID mention a cadre of us oilfield pro’s, employed as consultants. Sorry, shale development requires a decade of massive investment in both equipment and manpower. There’s no evidence of either going on in the UK. Even China isn’t getting it, and we are in the aforementioned Harvest Mode.

FYI, the best non CONUS shale development is probably the Saudi shale gas initiative. Good enough reservoir quality, wink wink regulatory regime, enough CAPEX, and a ready supply of $300/month non indigenous indentured labor. If they could increase the fraction of summer AC powered by nat gas instead of oil, there would be less world wide emissions as a result.

paul courtney
Reply to  bigoilbob
December 7, 2021 4:27 pm

Mr. bob: Joe B’s response debunked your “full Harvest Mode” nonsense. Your irrational opposition to fracking suggests that it eats into your profit somehow. If the U.S. energy industry is failing so badly as you constantly post here, you should get out- take Joe Brandon’s suggestion and learn to write code. I might hire you to write code, but wouldn’t hire you to run a gas station.

bigoilbob
Reply to  paul courtney
December 7, 2021 4:58 pm

Mr. bob: Joe B’s response debunked your “full Harvest Mode” nonsense.”

He completely sidestepped it. 

  • Which shale producer is spending at any more than a fraction of what they were a few years ago? Not rhetorical, which?
  • What has happened to the market cap of US oilfield servicers, the folks who actually do the work, over the last few years?
  • Why is Conoco planning on 2022 CAPEX of less than a quarter of what they spent a few years ago, after it’s $9.5B Shell Permian acquisition?
  • What has Occidental been able to do to exploit their $35B shale acquisition?
  • What improvements have the producers been able to make to combat the ever increasing frac hits an competitive drainage?

Your irrational opposition to fracking suggests that it eats into your profit somehow.”

Nope. I intentionally stayed away from it in my 40+ years of petroleum engineering. Lots of EOR (enhanced oil recovery for you civilians), on and offshore California, and then the 21st century overseas, in haz duty premium pay conflict zones. But I did return from retirement to manage Marcellus frac completions for the premier US producer, for all of 2 weeks, Quit when I realized that it was mostly fighting with Halliburton over pennies, and trashing whole counties in West Virginia. But overall, I “profited” just fine….

paul courtney
Reply to  bigoilbob
December 8, 2021 7:02 am

Mr. bob: I see, so Halliburton has been “trashing whole counties” in W.Va., for how long now? An environmental disaster in W.Va. that could have been blamed on Trump yet no news coverage whatsoever? Sure.
Your bullet points don’t merit a response becase it’s clear you cherry pick some item you’ve found (your search was biased, as you always make clear). You seem to think these items outweigh the elephant, that exports are at all time high, because you think these companies are incapable of long-term thinking.
One last item, your bullet points above say UK has no infrastructure for extracting or distributing NG. Didn’t the UK have coal infrastructure? Not too hard to convert coal elec. to NG, is it? So there’s some infrastructure in place I’d guess. To extract takes five years? Not in US, why different there? Piping NG isn’t hard to do, unless enviros stop you.
Anyway, glad you’re retired, and you made your pile. If fracking NG didn’t make money (you say it loses money?) then it would not have reached “harvest mode”. You are blind to this, bullet points notwithstanding.

bigoilbob
Reply to  paul courtney
December 8, 2021 7:23 am

Mr. bob: I see, so Halliburton has been “trashing whole counties” in W.Va., for how long now? An environmental disaster in W.Va. that could have been blamed on Trump yet no news coverage whatsoever?”

No, the producers are responsible. Do you understand how things actually work in the field? FYI, Obama was POTUS, when I took that gig. The reg blame is on W. Va., with their bought and paid for regulators.

“Your bullet points don’t merit a response becase it’s clear you cherry pick some item you’ve found (your search was biased, as you always make clear).”

A pitiful excuse to ignore the facts.

“One last item, your bullet points above say UK has no infrastructure for extracting or distributing NG.”

Actually, not your “last item”, but reading comp. What I actually, factually, inferred, was that the UK does not have anything like the frac spreads, trucks, multilateral drilling/completing capacity, haz waste disposal capacity, etc. to commercialize shale frac drilling/completions. This takes a decade of spec investment, as has been shown in the CONUS. Investment that both the producers and their service company vendors will never get back, per the downward trajectory of market cap for both sectors.

“Didn’t the UK have coal infrastructure? Not too hard to convert coal elec. to NG, is it?”

Dream on. What significant part of the hardware can be “converted”? The only “conversion” that might take place is job transfers from the cola fields to the shale fields. I.e., from one twilighting biz to a another.

The UK has been producing coal throughout AD. The biz has evolved over hundreds of years. Shale exploitation would have nothing in common with that biz history.

“To extract takes five years? Not in US, why different there?”

I agree that if your producers wanted to follow the US example of a hot house business, started from a uniquely bright price point, funded with years of wasted, spec investment, ultimately producing negative ROR, they could KTSO. But they would end up losing even more, as I’m guessing that UK regulators would be less Ben Dovery than their US counterparts.

bigoilbob
Reply to  paul courtney
December 8, 2021 7:29 am

 If fracking NG didn’t make money (you say it loses money?) then it would not have reached “harvest mode”.

If fraccing was a sustainable biz, then the producers and servicers would not both have death spiraling market caps. More was plowed in than returned. This, even assuming the communizations of the 11+ figures of asset retirement obligations they have already been racked up (and the more of them that will be later), from the businesses to the rest of us.

The whole biz is racing for the highway pillar, Aubrey McClendon style…

bigoilbob
Reply to  paul courtney
December 8, 2021 7:47 am

Oh, you reminded me. Fun fact. 2 days before I quit the nation’s premiere Marcellus producer, I was told that my annual bonus would vary by $2,000, depending on whether or not I kicked in $1,000 to Earl Ray Tomblin’s war chest. A.k.a., Tuesday in the gas field…

Joe B
December 7, 2021 12:42 am

The company behind the next LNG project to export is Venture Global, and the Calcasieu Pass plant will come online within weeks.
An identical plant, at twice the size – Plaquemines Parish – will get FID also within weeks.
A third project, CP2, was just given the go ahead to start the development phases.
All three plants combined will produce 50 million tonnes per annum (mtpa).
This is slightly more than the much touted Qatar expansion (49 mtpa).
The 3 plants will utilize 7 1/2 Bcfd.

As an aside, the 3 west coast Mexican LNG plants (Ensenada, Puerto Libertad, and Topolobampo) will ultimately produce about 40 mtpa, all of it US sourced (primarily Permian and Piceance), and should export to the FSRU at Port Kembla, Australia (yes, Australia) in about 18 months time.

bigoilbob
Reply to  David Middleton
December 8, 2021 11:32 am

At $85/t, they will be wildly economic.”

Paid for with what? Pure borrow and spend corp. welfare.

Yes, bipartisan. My US Rep. Cori Bush has repeatedly heard from me on this. Hawley and Blunt are paid up stooges. Beyond hope….

Stevek
December 7, 2021 2:06 am

Massachusetts by importing LNG instead of using pipelines increases co2 as energy is needed to compress the gas.

Joe B
Reply to  Stevek
December 7, 2021 2:25 pm

Steve,
Although it is primarily cooling – not compression – that causes the liquefaction, process natgas is consumed in these operations.
While 1 million tonnes of LNG per year strictly equates to 131,000,000 cubic feet of natgas per day, normal procedures require 140/160 million cubic feet per day to produce 1 metric tonne of LNG each year.

Related, the world record gas send out (at the time) took place in February, 2019, just outside Boston at the Northeast Gateway Port and it received virtually NO media attention.
Source of the natty was Trinidad/Tobago and Russia (Yamal by way of St. Nazaire).
That the MSM has been so woefully incompetent in informing the public is a big reason why things are just so fucked up.

John Garrett
December 7, 2021 4:32 am

Current prices for LNG reflect Europe and Britain’s dire situation. There is currently one hell of an arbitrage between U.S. gas prices and those prevailing outside the U.S.:

National Balancing Point (UK): ~$30.00/MMBtu
Title Transfer Point (Netherlands): ~$30.00/MMBtu
JKM (Japan Korea Market): ~$34.00/MMBtu

John Garrett
Reply to  David Middleton
December 7, 2021 5:45 am

Asia LNG price v. Henry Hub price:

https://fred.stlouisfed.org/graph/?g=JBe8

Last edited 1 month ago by John Garrett
bluecat57
Reply to  John Garrett
December 7, 2021 6:12 am

The question is: Who is profiting?
#FollowTheMoney
Bet it leads to Leftists and Democrats.

bluecat57
December 7, 2021 6:09 am

That was before the Biden Leftists destroyed the energy production sector and doomed millions if Americans to poverty and freezing to death.

John Garrett
December 7, 2021 6:26 am

EQT Corporation (the largest U.S. natural gas producer) responds to Sen. Warren:

https://www.eqt.com/wp-content/uploads/2021/12/ResponseLetterSenWarren.pdf

The Honorable Elizabeth Warren
United States Senator, Massachusetts
309 Hart Senate Office Building
Washington, DC 20510

December 7, 2021

Dear Senator Warren:
We strongly agree with the goal of keeping energy affordable and reliable for citizens of the United States. EQT Corporation (EQT) has worked toward this goal for decades. We disagree, however, with claims that the increase in natural gas prices relative to 2020 levels is attributable to a combination of “corporate greed” and the export of liquefied natural gas (LNG)…

…We at EQT are saying loud and clear that we are willing and able to supply the world with cheap and reliable natural gas, while simultaneously reducing emission levels at a pace the world has never seen. But we need your help to get it done. We are not looking for handouts, we are looking for permission and a clear signal of political support, one that will justify the billions of dollars that our industry will have to spend to make the largest green initiative in the world a reality.

Conclusion
I know that ensuring American citizens have access to reliable, low-cost energy and meeting our global climate goals are both incredibly important to you, and I hope you understand that they are to me as well.

I am a 39-year-old native of Massachusetts who lives in the heart of where my company operates and wants to see a world where all people can flourish, the energy needs of others are responsibly met, and my Bostonian mother does not have to heat her home in the winter with heating oil.

Sincerely,
Toby Z. Rice
President and Chief Executive Officer

Bill Rocks
Reply to  John Garrett
December 7, 2021 7:58 am

That is an impressive letter full of information and perspective.

Jeff corbin
December 7, 2021 7:49 am

Time to force the Russia’s hand in the Ukraine by pouring LNG ships into the black sea. The last thing P needs is wind fall profits to fund military action, (invasion or espionage) in Ukraine and central Europe.

Alan Watt, Climate Denialist Level 7
December 7, 2021 10:17 am

The Everett regasification terminal near Boston, Massachusetts, receives most U.S. LNG imports, and in 2020, it receved 60% of total U.S. LNG imports; 95% from Trinidad and Tobago and 5% from Nigeria. 

Why would Boston import from Nigeria (let alone Russia) when US Gulf ports are closer?

And have Trinidad and Tobago been demanding climate reparation payments because our fossil fuel use threatens to put them under water?

Glen
Reply to  Alan Watt, Climate Denialist Level 7
December 7, 2021 12:20 pm

Jones act

Joe B
Reply to  Alan Watt, Climate Denialist Level 7
December 7, 2021 2:48 pm

For all those continuing to follow this unfolding New England energy drama, please do not think that a temporary waiving of the Jones Act will prompt positive, long term effects for both New England in particular or the American hydrocarbon industry in general.
The few shiploads that MIGHT be diverted to Everett (or GOM loading of FSRUs and discharging at Northeast Gateway) could bring about some short term relief.
However, the ~3 1/2 Billion cubic feet per delivery is only 12 hours worth of supply currently offered via pipe.
(Peaking use would extend consumption over a several day span).

In a nutshell … the political/social/economic fallout from misguided energy policies are approaching epic proportions.
The more serious the pain felt by New Englanders, the more widely, vigorously motivated will they become to ‘right their own ship’.

This writer has seen SEVERAL cases of catastrophic energy shortfalls from Australia, Texas, the UK and Every. Single. Time, the Green Blob has – with MSM assistance – blatantly lied about the fundamental causes … pointing the fingers at hydrocarbons and NOT the interruption/cessation of sun/wind production.

New England’s political leaders have brought the situation to this point and the looming disruptions may be necessary to prompt a cathartic re-direction of their policies.

R.T.Dee
December 7, 2021 10:18 am

.Another good one, David M.! Keep on fracking! Let,s go Brandon!

I repeat my Song of the Frakkers: by R.T.Dee

Dedicated to David Middleton, Geologist & Petroleum Engineer @wuwt.com

Old Joe was in the White House, toying with his pen,
Thinking very little as was his norm; and then
In rushes Bernie, with his leftist minions three,
One of whom was the well known AOC.

“Hey, Joe, old pal, we have got a job for you.
Get into your Office, set your arse upon a pew.
We need to get your moniker on these Orders Exec.,
To counteract the damage that the Orangeman did do.”

“Wazzat? asked Joe, “I was about to take a nap,
And you and the girls come in, talking loads of crap!
Do I need to read them first? What are they about?
I had better call Pelosi. Girls, don’t shout!”

Now Bernie and his minions were on the far left,
A branch of the Demoncrats of common sense bereft.
They didn’t want Ms. Nancy messing up their acts,
– She might confuse Joe with something bad – like facts
.
Birds twittered in the background, led by AOC,
Saying “De-fund the Police, we must stop the XLP,
End the use of fossil fuel, have the schools teach CRT.”
– And a lone voice muttered “Gosh, I really need a pee.”

“Hush, girls,” said old Bernie, “let me have his ear.
If you all talk at once it won’t be very clear.”
“Mr. President, you alone possess the power,
To out-trump Trump – it can be done within the hour.”

“This is what the Party needs – what these papers say –
We must stop this fracking and do it right away.
We can’t stop all the fracking but you must understand,
That we can prohibit them from using federal land.”

“What is hell is all this fracking? I never understood
But if the Party says so, guess it can’t be very good.”
A shrilling from the background, like a cat with mange:
“It’s an ecological disaster, all because of Climate Change!”

“Hush, girls,” said old Bernie, “will you let me have the floor?
Old Joe and I go back this twenty years or more.
We understand each other and he isn’t very ‘woke’
If you all keep shrieking he’ll think it’s all a joke.”

“We must stop the XL pipeline because it carries gas,
We need to stop Big Oil and must set it on it’s ass!
Shut down coal plants, de-commission nuclear power,
And you, Mr. President, can do it all this hour!”

So Biden signed his Edicts, but the Frakkers kept on fracking,
Though there weren’t quite as many as there were a while ago;
Yes, Siree! Those Frakkers kept on fracking,
All the way from North Dakota to the Gulf of Mexico.

Oh! They fracked in the Permian, they fracked in the Bakken,
And they fracked in places where the oilmen didn’t go,
They drilled through the clay, the gneiss and the limestone
Down to the shales that were waiting down below.

They pumped out the gas – and if there’s lack of pipelines
They’ll use rail-cars and tankers to carry off the gas,
Nothing stops the Frakkers, they just keep on a-fracking,
From the fields of Pennsylvania to the oil lands of Texas.

Out on the west coast, Californication,
(Meaning how to bugger things by political means),
Shut down the nukes and the coal-fired generation
And instead used renewables not worth a hill of beans.

‘Cos when the wind don’t blow and the sun don’t shine,
You are shit out of luck when it comes to getting power.
If ya only got some hydro and ya lakes are getting lower,
Well, you gotta crank up turbines and use gas or coal.

Oh! They fracked in the Permian, they fracked in the Bakken,
And they fracked in places where the oilmen didn’t go,
They drilled through the clay, the gneiss and the limestone
Down to the shales that were waiting down below

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