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Indybay FeatureRelated Categories: Central Valley | Environment & Forest Defense
Natural Gas Supply Outpacing Demand Growth - Ban Exports of LNG
How can the US “high-volume high pressure” production of (fracked) LNG be the cheapest on the global market? Maybe it's because the water is free. The sand is free. Ban fracking sand mining now! Sand mining for purposes of fracking will likely become a controversial issue this Legislative session (2013) And the 'fracking fluid' is probably leftover industrial waste, a liability turned to asset. It's the Tao Of The Corporate Way. We Oppose Unless They Disclose (Monterey slogan)
That's one solution to the burgeoning domestic production of both natural gas and crude oil as well as lagging domestic natural gas and petroleum products demand is to export. Oil and gas companies have applied for new liquefied natural gas export licenses with the U.S. government in order to profit from the price disparity between the U.S. domestic natural gas price and the foreign natural gas price, which is over $15 per MMBtu in Asia. Even factoring in an upper limit of $3.00 per MMBtu for liquefaction as well as estimated shipping costs of $1.50 per MMBtu to Europe and $3.75 per MMBtu to Asia, U.S. natural gas producers reap substantial profits from these transactions.
LNG shipped via large ocean tankers provides countries with trade flexibility and helps avoid some of the geopolitical and geographic issues associated with pipelines, LNG has its own limitations. The technology has been around for decades, but until recently it was not price-competitive against pipelines in a selected market (country). LNG requires a port to accommodate tankers and processing plants. On the export side, the process requires a liquefaction facility, which can cost several billion dollars, and large tankers, each of which can cost between $200 and $400 million (Bloomberg). A facility to gasify LNG on delivery is also required on the importers side costing in the hundreds of millions into the billions.
We Oppose Unless They Disclose (Monterey slogan)
When we’re told by the Western States Petroleum Association (WSPA) that for 60 years there has been ‘fracking’ in California with no problems or contamination of groundwater aquifers (Catherine-Reheis Boyd, WSPA), or that the amount of water used in ‘fracking’ is miniscule (Tupper Hull, WSPA, on Jan 7, 2013 speaking to the wineries and vintners of the Central Coast) http://www.winespectator.com/webfeature/show/id/47844
what we are not told is that the extraction processes and technology of natural gas in deep subsurface ‘high volume hydraulic fracturing’ cannot be compared to the historic shallow vertical wells fracked for (un)conventional oil and ‘dry natural gas distillation’ which is historically what has gone on in California.
Two techniques, horizontal drilling and hydraulic fracturing, also called "fracking" (injecting liquid into rock formations to push out trapped gas) have the potential to access large swaths of shale gas, tight gas, and coal-bed methane once thought too expensive to extract. In the United States, shale gas has already jumped from less than 1 percent of U.S. production a decade ago to 23 percent in 2010.
As a result of increasing liquids production, natural gas liquids products (ethane and propane) are themselves becoming uncoupled from the oil price. To maintain profitability, oil and gas companies have turned from dry gas production, which is largely uneconomic at current prices, to the production of the liquids portion of shale gas formations.
How can the US “high-volume high pressure” production of (fracked) LNG be the cheapest on the global market? Maybe it's because the water is free. The sand is free. But Sand mining for purposes of fracking will likely become a controversial issue this Legislative session (2013). Currently, most of that mining is done in Wisconsin, but there already are heavy impacts on Minnesota roads as the sand is transported to North Dakota oil fields. But each mine still requires a permit from the state, and Governor Dayton can put the brakes on this deadly mining rush by placing a moratorium on permits for new mines.
Tell Governor Dayton: Ban fracking sand mining now!