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By Geoffrey Styles on Mar 20, 2014 with 19 responses

Environmental Groups Gear Up to Stop US LNG Exports

LNG As the Next Battle after Keystone

A collection of environmental groups, including the Sierra Club, Friends of the Earth and 350.org apparently just sent a letter to President Obama, urging him to require a Keystone-XL-style environmental review — presumably entailing similar delays — for the proposed Cove Point, Maryland liquefied natural gas (LNG) export terminal. Given the President’s “all of the above“ approach to energy and his recent remarks in support of wider natural gas use, the hyperbole-laden letter seems likelier to rev up the groups’ activist bases than to influence the administration’s policies.

Either way, its timing could hardly be coincidental, coming just as opinion leaders across the political spectrum have seized on LNG exports as a concrete strategy for countering Russian energy leverage over Europe in the aftermath of President Putin’s seizure of Crimea. If, as Robert Rapier and the Washington Post have suggested, the Keystone XL pipeline is the wrong battle for environmentalists, taking on LNG exports now is an even more misguided fight — at least on its merits.

Wrong on Science, Wrong on Scale

Referring to unspecified ”emerging and credible analysis”, the letter evokes the thoroughly discredited argument that shale gas, pejoratively referred to here as “fracked gas”, is as bad or worse for the environment as coal. In fact, in a similar letter sent to Mr. Obama one year ago, some of the same groups cited a 2007 paper in Environmental Science & Technology that clearly showed that, even when converted into LNG, the greenhouse gas (GHG) emissions of natural gas in electricity generation are still significantly lower than those of coal, despite the extra emissions of the liquefaction and regasification processes. The current letter also implies that emissions from shale gas are higher than those for conventional gas, a notion convincingly dispelled by last year’s University of Texas study, sponsored by the Environmental Defense Fund, that measured actual — not estimated or modeled — emissions from hundreds of gas wells at dozens of sites in the US.

It’s also surprising that the letter’s authors would choose to cite the International Energy Agency’s 2011 scenario report on a potential “Golden Age of Gas” in support of their claims. That’s because the IEA’s analysis found that the expanded use of gas foreseen in that scenario would reduce global emissions by 160 million CO2-equivalent tons annually by 2035, mainly through competition with coal in power generation in developing countries, addressing the principal source of emissions growth today.

The letter takes another wrong turn in suggesting that President Obama increase support for wind and solar power instead of supporting gas. The contribution of new renewables to the US energy mix has grown rapidly, but it remains small. Despite record US wind turbine and solar power additions, shale gas and shale oil added more than 20 times as much energy output on an equivalent basis in 2012, and last year’s gains look similarly disproportional. Simply put, the US isn’t enjoying a return to energy security, or becoming a major energy exporter, because of renewables, and it’s counterproductive to pit renewables against gas as done here.

Another Wrong Fight, at the Wrong Time

Experts disagree on how much and how quickly US LNG exports can influence gas markets in Europe and elsewhere. Yet while none of the currently permitted or proposed LNG facilities will be ready to ship cargoes for at least a couple more years, the knowledge that they are coming will inevitably have an impact on traders and contracts, including contracts for Russian gas in the EU. I can vouch for that as a former oil trader. Whether or not US natural gas molecules ever reach Europe, they can serve a useful role in the necessary response to Russia’s aggression in Ukraine. Attempting to block this for spurious reasons puts opponents in jeopardy of becoming what Mr. Putin in his previous career might have called “useful idiots.”

It’s tempting to speculate on what this new campaign says about the participating groups’ perceptions of how the Keystone fight is going. Win or lose, they might soon need a new cause, or face the dispersal of the protesters and financial contributors it has galvanized. Blocking LNG may look conveniently similar — even if similarly mistaken — but I can’t help feeling these groups would gain more traction with their fellow citizens by focusing on what they are for, rather than expending so much energy in opposition.

  1. By Ben on March 20, 2014 at 8:15 pm

    Yes, the Enviros have signed on to a whole new level of economic heterodoxy that belies a cornerstone of the marketplace: It takes energy to produce growth. Ah, but that’s just the point isn’t it? Economic growth isn’t the goal at all. Environmental protection at substantial trade-off cost to economic output is the principal objective here in the name of the planet and all its blessed creatures, large and small. Ah, yes, putting it that way, I guess various arguments about the merits of job creation, or improving household incomes, or lifting individuals and families from poverty are of little consequence. The holy grail in all this is safeguarding the planet and all else is really quite secondary. Yes, that makes perfect sense and, so, the rest of the discussion is quickly relegated to sidebar status.

    Now that we understand–and all agree–that growth isn’t (and shouldn’t be) our individual or collective aspiration, we can begin sorting the wheat from the chaff on all the various energy development projects that hold little prospect of delivering the promise land of clean, green energy for America’s future peace and prosperity–well, at least peace.

    I’m quite familiar with Cove Point’s expansion and it’s a done deal. Why so confident? Don’t ask me, go check with the #2 Democrat in the House,
    Rep. Steny Hoyer (D-MD). Expansion plans were explored in his office and that of MD state Sen.Thomas V. “Mike” Miller in Annapolis well ahead of any FERC application. It may be worth remembering where Majority Leader Pelosi orginally hails from as well (hint: It’s a lot further east than the SF Bay area ;)

    Anyway, I appreciate the attempted boosting of natural gas, but I doubt exports will be the issue that wins over a lot of the hearts and minds of typical Americans who instinctively believes (rightfully or not) that national security may start at the water’s edge, but it works toward the heartland with an intentional eye toward bolstering our productive capacity. And the arguments to this effect have yet to reach full chorus. When they do, I’m inclined to believe that neither the Enviros or the major energy producers will be altogether satisfied with the working man’s traditional instincts.

    Thanks for covering what will surely remain a highly-charged issue in the months (make that years) ahead.

    Ben

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    • By Geoffrey Styles on March 21, 2014 at 11:30 am

      Ben,

      I wouldn’t bet against Hoyer on this. This campaign also looks like another example of making the perfect the enemy of the good. LNG is cleaner than coal, hands down, but that’s not good enough, apparently. Podesta has it right on this one: “If you oppose all fossil fuels and you want to turn that switch off tomorrow, that is a completely impractical way of moving toward a clean-energy future.”

      Read more: http://www.politico.com/story/2014/03/john-podesta-natural-gas-environment-energy-104836.html#ixzz2wbyT1eBE

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    • By ben on March 22, 2014 at 11:03 am

      I’m betting on Steny (whom I know). The issue is not a problem in Southern Maryland and especially in (heavily Republican) Calvert County.

      http://articles.baltimoresun.com/2014-01-26/business/bs-bz-cove-point-exporting-safety-20140126_1_cove-point-lng-import-terminal-lng-facility

      The signal that LNG was pretty much a “go” was the selection of a fairly pragmatic Moniz to become Sec’y at DOE. The issue of exports largely comes down to one of volume-limitations and that will sort itself out. If one simply looks to the influence of folks like George Kaiser (in Tulsa) on the cuurent White House occupant, an awful lot about the internal political dynamics on the issue become a good deal clearer.

      Yes, one would pray that the public good would trump that of ideology in the end. Regrettably, sensibility hasn’t been racking up a very impressive track record in recent years. Special interests have definitely got the old tail wagging the dog. This, too, will change in due course. At least that’s the hope.

      Thanks for your consistently balanced and insightful analysis.

      Ben

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  2. By Forrest on March 21, 2014 at 7:19 am

    Your absolutely right!

    My thoughts, the country has entered into Fascism rule per environmental control. Citizens don’t magically get smarter or have more virtue once receiving government dole and a Washington D.C. address nor do they gain such when crossing over to environmental activism. The organizations, businesses, politicians, entertainers, and people whom make a living off stoking environmental flames is indeed large. They will never let the problem ebb….it only worsens per power and money it attracts. So, these profiteers only looking for opportunities to exploit for their self interests. They work within a wonderful field of study that bears no responsibility to their actions which in turn applies much cost to the competition. A field of study that carries a badge of honor just for spouting off and in so doing claim more honor and donations. The U.S. is educated to the wonderful world of activism to achieve government control. Were also educated to historical dastardly business practices. This formal education indoctrination in full swing per early ’70s….present day mission accomplished. Not good to train the citizens upon such biases and jeopardize critical thinking skills. IOWs don’t train them on what to think, but how to think!
    As you post the act of government approval for LNG port has immediate ramifications upon State Department diplomacy. It’s way cheaper to export LNG than military. This erodes Russia’s primary weapon of influence. Also, it just doesn’t make sense to bind up business open market process on the false notion political intelligence is a superior decision making process. The fuel market is complicated and changes quickly. The business cycle automatically adjusts for consumer demand. The government need only insure maximum market competition and quickly inflict criminal laws to those attempting market control. This represents my enthusiasm per competition of biofuel to the marketplace. Also, it’s a false assumption to close markets such as exports to ensure cheap energy. This thinking will result in Hugo’s Venesuela economy. We will have more poor people in the nation per such thinking skills.

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  3. By exdent11 on March 21, 2014 at 7:33 am

    As an environmentally concerned citizen, it annoys me when some environmental groups galvanize around debatable issues like the Keystone pipeline and this LNG export business. These groups dissipate their power by warring against projects that have limited environmental impacts in the grand scheme of reducing carbon. I would much prefer them to expend their ammunition on fighting for a carbon tax, reducing coal usage, and keeping the gas industry’s feet to the fire on reducing methane emissions.

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    • By Forrest on March 21, 2014 at 8:38 am

      As I understand the science, methane is multiple times more GHG powerful, but comes with a short time frame to deconstruct. Probably, per solar radiation? Natural gas is such a present day wonderful fuel per ease of pipeline transport and incredible efficiencies i.e. advanced combined cycle generation of power and CHP process even better. Steam power will never achieve the efficiencies of hot air turbine. Also, the future of hot air turbine looks brighter. One example, steady improvement of ceramic technology. While it is unwise to place so many eggs in one NG basket as per our changes in supply…it would be smart to enter more diverse supply streams within the N.G. pipeline i.e. coal to gas conversion. This is particularly attractive as the efficiencies of energy conversion are approaching 2x what we can achieve from coal steam power. From what I read the gasification process is low polluting. Also, the process can be located upon coal supply land and product piped for minimal transportation costs. Remember, the articles per Robert Rapier highlighting the coal use upon developing economies unstoppable and overshadows the U.S. best intentions? Realize we would enjoy multiple times improvement of global pollution by eliminating some of our hyper expensive CO2 solutions and donate money to poor foreign nations per the easy pickens of huge benefit and low cost entry level solutions. The investment dollars rewards per benefit a magnitude higher.

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    • By Geoffrey Styles on March 21, 2014 at 11:17 am

      The President’s advisors are weighing in: http://www.politico.com/story/2014/03/john-podesta-natural-gas-environment-energy-104836.html?hp=r1
      Gist: Methane leaks from gas systems are mostly fixable, and even at current levels don’t negate the benefits of gas in power generation.

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  4. By Newton on March 21, 2014 at 11:36 am

    Govt doesn’t sell gas , for profit companies do, if you check the facts the only way LNG will be profitable to ship to EU is with taxpayer’s subsidy, of course ship to east asia will need no subsidy but US LNG can’t compete with russian/iran piped gas in any future

    currently gas fracking in US is unprofitable at current prices so of course gas companies are happy to get on board the LNG to save EU ship full speed ahead

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    • By Geoffrey Styles on March 21, 2014 at 5:07 pm

      Newton,

      “Govt doesn’t sell gas.” You say that as though you think it will come as a surprise to me. As for the facts, they start with the requirement for any US LNG export terminal to receive permits from both DOE and FERC, so the government is involved to at least that crucial degree. No permits, no exports. Once that hurdle, which these environmental groups want to turn into a brick wall, has been cleared LNG is sold by commercial entities to other commercial entities.

      If pipeline economics were the only factor determining who supplies the European market, EU countries would buy all their imports from Norway and Russia, but they don’t. They buy significant quantities of LNG from Qatar, Nigeria and other suppliers. http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:EU-27_imports_of_natural_gas_-_percentage_of_extra-EU_imports_by_country_of_origin,_2012.png&filetimestamp=20130529121346

      That means they’re already competing for LNG with Japan, China and other consumers. Even if 100% of US LNG went to Asia, it would still increase global supply, reduce prices, and make it easier for Europe to buy LNG from other suppliers, or at least use that threat to drive down Russian contract prices, which is the real leverage we can exert on Russia’s not very diverse economy, raising the cost of Mr. Putin’s territorial ambitions.
      It’s also worth noting that distance has a bearing on delivery costs. For example, the voyage from Houston Fos-sur-Mer in France is around 16 days, versus 28 days to Osaka, Japan.
      Finally, it’s a gross oversimplification to suggest that all shale gas is unprofitable at current prices. If that were correct, we’d see production falling, not increasing. The real question is how much prices would have to go up to stimulate the additional production to supply all these export terminals. Plenty of companies seem willing to bet that the answer is a little but not a lot.

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      • By Newton on March 21, 2014 at 5:25 pm

        shale gas in usa atm is unprofitable they flare off est 30% algeria is also a large supply to eu using pipes if usa lng added any pressure to russia i would be surprised. my point unstated was more along the lines of the attempt of us congress pushing speed on lng exports ‘to help eu’ is in reality merely to the goal of higher prices for us gas companies profits

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        • By Newton on March 21, 2014 at 5:38 pm

          there is a production drop in fracking gas in us it is well published but the super hype by the industry such as claims as 100 yrs of gas for usa is way overinflated the theory is during early boom starting in 2006 benifited the early companys who by 2010 began selling out to ‘suckers’

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          • By Newton on March 21, 2014 at 6:04 pm

            ps. check your sites ‘oil markets and the shale boom 2014′ comments on that are very telling

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        • By Geoffrey Styles on March 21, 2014 at 9:00 pm

          With such definite ideas about how things work, it’s perplexing that you’d waste your valuable time reading anyone else’s views, let alone commenting on them.

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          • By Newton on March 21, 2014 at 11:48 pm

            the fact that i read ‘others views’ means i am open minded enough to accept truth where i find it and debate where i find untruth.

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    • By Forrest on March 21, 2014 at 6:13 pm

      Europe is struggling to pay gas fuel supplies per consciousness of empowering bad behavior. They would prefer to pay more and oppose those countries beset with nefarious ideals of government. The U.S. should stand tall and place economic might to the liberal ideals of independence and freedom aka open market competition to empower such noble actions. You post government doesn’t sell gas at a profit. Well, that is an indicator of their ineptitude. Also, the mere fact that the U.S. is available and on the ready is a big determinant to the profiteering forces of those countries proud of central control.

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  5. By johnwerneken on March 21, 2014 at 9:51 pm

    Those people are for an end to progress and permanent poverty if not genocide for all but themselves. They are worse than the Nazis they only wanted to enslave or exterminate a small fraction of humanity, not almost all of it.

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  6. By Newton on March 21, 2014 at 11:55 pm

    If the USA is on the path to ‘energy independence’ why then would we need Keystone pipeline threw america’s heartland with all the attendant risks ?

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  7. By Forrest on March 22, 2014 at 8:11 am

    They prefer to make noise in attempt to puff up their self worth and contributions. Much easier to tear down than build. Easier to accuse and complain than improve. This goes double for environment concerns. The usual posts entail intriguing thoughts, information, stats, etc., not arguments upon conspiracy accusations.

    I personally caught on to this nonsense as a mere youth. Living in northern Wisconsin we had a mineral company looking for copper. The local papers had press on the “discovery”. Locals were excited by the new found wealth, but the neighboring twin cities were just buzzing with environmental drama. Commentaries of destruction and activists attempting to maximize their influence to condemn any possible progress. A deluge of propaganda to scare population with the media on hot pursuit to promote the nonsense per excitement of their marshaling abilities. They demanded to foil any research drilling as that would kill the pristine woodland. Demonstrators quickly set up camp for PR with a call to press for the momentary photo shot once the captioned obtained. This was within a few miles from our country home. I took a bike ride down to the test hole drilling site next to marsh land, to discover the ecological destruction. Looked harmless to me, couldn’t see any problem and revisited the site a few years afterward. Not a trace of evidence man was drilling. So, I learned a valuable lesson that most environmentalist are actors and trade in fear mongering and propaganda for empowerment. The mainstream media is happy to go along with the trade and won’t deflate accusations per credible testimony and quality information to public. Much easier, cheaper, for them and probably more profitable to inflate the activity that relies on poor quality info and low information public. The same scenario happened a few years later only a magnitude higher per the military installation cutting mile long swaths upon forest land for global communication with sub fleet. Project ELF. The same nonsense. Propaganda was off the charts and almost no intelligent reporting by media. That was decades ago and I can inform your readership the activist were totally wrong with their accusations. The public long ago forgot the confrontation and the media chooses to forget those historical lessons per discrediting the environmentalist. In fact the media such as NPR will continuously go back historically to preach lessons of destruction per some business activity as reasons to become activists. I have also, lived with the much propagandized Embridge pipeline spill. For brevity will just comment that the media, Environmentalist, politicians, and EPA have an unholy alliance to maximize propaganda capability. The hysteria was laughable and the ability for impartial evaluations gone. Access and information was regulated per good old fashioned communist style control.

    I read little credible evidence of environmental destruction of pipeline. Also, the arguments for closing down trade of LNG as an attempt to maintain cost of energy is a poisonous attractant to those full of conspiracy intelligence. Venezuela is besieged with this thinking skill set and reason Hugo was so successful. This guy, basically, was a community agitator as well.

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  8. By Paul Taylor on March 23, 2014 at 11:59 am

    During the oil shortage crisis with Pres. Carter in 1970s, the Democratic congress placed export restrictions (embargoes) on U.S.-produced oil. Pres. Obama should remove the 40 year-old embargoes, as well as his own drilling restrictions on federal lands in light of Asian and European demands for America’s bounty of oil and natural gas. Moreover, Pres. Obama should fast track American port expansions to handle liquefied natural gas (LNG) for export.
    Los Angeles ECOPOLITICS Examiner

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