A subsidiary of Canadian energy company TransCanada has proposed a crude oil pipeline running 4,600 kilometers from Alberta and Saskatchewan to Saint John, New Brunswick. The proposed Energy East Pipeline Project would enable Western Canadian
crude oil to be shipped east across six Canadian provinces, expanding
economic opportunities for refining and export -- but like other major
pipeline projects, the Energy East project faces regulatory hurdles.
On March 4, 2014, Energy East Pipeline Ltd., a wholly owned subsidiary of TransCanada Oil Pipelines (Canada) Ltd., proposed the project which entails the conversion of about 3,000 kilometers of existing natural gas pipeline to an oil transportation pipeline, new pipelines in Alberta, Saskatchewan, Manitoba, Ontario, Québec and New Brunswick, and marine facilities that enable access to other markets by ship. If built, the $12 billion project could carry up to 1.1 million barrels of crude oil
per day.
The major motivation behind the line is the relative surplus of Western Canadian crude oil, including fuel produced from the Alberta oil sands. While Alberta and Saskatchewan produce substantial oil, relatively little capacity to ship that crude to refineries means relatively low prices for producers. Meanwhile, refineries in Quebec and Atlantic Canada currently receive 86% of their crude oil from foreign sources. TransCanada pitches the Energy East project as giving these Eastern Canadian refiners access to "reliable, low-cost Western Canadian crude." The developer also points to positive economic development impacts, including about 10,000 jobs and an estimated $35 billion added to Canada’s gross domestic product over 40 years, as well as the relative safety of shipping oil by pipeline as opposed to by rail or truck. Notably, the project also allows TransCanada to make better use of its existing natural gas pipeline system, which has excess unused capacity.
Like the Keystone XL pipeline in the U.S., the Energy East project faces opposition from both local siting concerns and global worries about the environmental impacts of "tar sands" crude production. Some have also expressed concerns that the project would disrupt natural gas flows to Canadian consumers, although TransCanada has said that it has plans to build more lines to meet any increased demand.
Under Canadian law, interprovincial pipelines are federally regulated by Canada's National Energy Board (NEB). According to its website, TransCanada expects final regulatory approval in the fourth quarter of 2015, with the project commissioned and placed in service in 2018. How the regulatory process plays out will affect when -- and whether -- the Energy East pipeline project moves forward.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label truck. Show all posts
Showing posts with label truck. Show all posts
Exporting compressed natural gas from the US
Monday, October 6, 2014
In a divided opinion, the Federal Energy Regulatory Commission has found that it does not have jurisdiction over facilities proposed by Emera CNG, LLC to compress natural gas for export to the Bahamas by ship.
Natural gas is an important fuel used globally for electric power generation, heating, and industry. Throughout most of the U.S., an abundant supply of natural gas means domestic pricing for gas is lower than overseas. This creates a potentially profitable opportunity to export natural gas from the U.S., if regulatory conditions allow.
Natural gas can be exported by pipeline as a gas, or by truck or ship as either compressed natural gas (CNG) or liquefied natural gas (LNG). Liquefying natural gas enables massive quantities of gas to be transported anywhere in the world, but requires the construction of expensive facilities to liquefy and regasify the fuel. The federal Natural Gas Act gives the Federal Energy Regulatory Commission jurisdiction over the siting and construction of most LNG facilities in the U.S., and authorizes FERC to issue certificates of public convenience and necessity for LNG facilities engaged in interstate natural gas transportation by pipeline. For example, Dominion Cove Point LNG, LP recently secured the FERC's approval for its Cove Point LNG export facility.
By comparison, compressing natural gas to high pressures is a relatively lower-cost way to improve the energy density of the fuel and reduce its transportation costs, albeit not to the degree of LNG. CNG exports are already happening, and may soon increase.
Emera recently proposed to construct a CNG compression and truck-loading facility at the existing Port of Palm Beach in Riviera Beach, Florida, in order to export CNG to the Commonwealth of the Bahamas. At the site, Emera would draw natural gas from the Riviera Lateral, a pipeline owned and operated by Peninsula Pipeline Company. Emera would then dehydrate and compress the gas to fill containers that would be loaded onto trucks. The proposed CNG facility would initially be capable of loading 6 million cubic feet per day (MMcf/d) of CNG, with expansion capabilities up to 25 MMcf/d. Once loaded onto trucks, Emera will haul the containers to a berth about a quarter mile away at the Port of Palm Beach. At the port, the containers will be loaded onto a roll-on/roll-off ocean-going carrier and shipped to Freeport, Grand Bahama Island, where the containers would be unloaded, the CNG decompressed and injected into a pipeline for transport to electric generation plants owned and operated by Emera affiliate Grand Bahama Power Company and other customers on Grand Bahama Island.
To reduce regulatory uncertainty, Emera petitioned the Federal Energy Regulatory Commission for a declaratory order that its project will not be subject to the Commission’s jurisdiction under the Natural Gas Act. Last month, a majority of the FERC Commissioners found that the construction and operation of the CNG facility described by Emera would not be subject to FERC's authority over natural gas exports under the Natural Gas Act. In particular, the majority opinion held that Emera’s facilities to compress and load CNG onto trucks are not jurisdictional export facilities.
In reaching this conclusion, the majority found that the proposed CNG facilities were unlike the border-crossing pipelines and coastal LNG terminals that the Commission traditionally has regulated under section 3 as import/export facilities, and more like existing, unregulated facilities that deliver LNG into trucks which are subsequently driven across the border into Canada or Mexico. Indeed, the opinion cites the example of Xpress Natural Gas, which has a CNG plant in Maine that receives gas from an interstate pipeline and loads CNG containers onto trucks for delivery to customers in Canada and in New England. The Commission does not regulate the CNG facility under either section 3 or 7, nor does it exercise jurisdiction over the trucks’ passage across the border under section 3.
The majority opinion similarly found that because Emera said that all of the natural gas to be compressed at Emera’s planned facility will be exported in foreign commerce to the Commonwealth of the Bahamas, the Commission’s section 7 jurisdiction over transportation and sales of gas for resale in interstate commerce would not be implicated by Emera’s proposal.
Notably, new Commissioner Norman Bay dissented from the majority opinion. Noting language in section 3 of the Natural Gas Act giving FERC jurisdiction over natural gas exports, Commissioner Bay's dissent describes the majority’s argument as that because the CNG will leave Emera’s facility by truck and travel a quarter of mile before being loaded onto ocean-going carriers for export – rather than by a pipeline running across a border or to a tanker – the facility is not an “export facility” under section 3 of the Natural Gas Act. In Commissioner Bay's words, "It cannot be that the Commission’s jurisdiction turns on this 440-yard truck journey."
With FERC regulation under the Natural Gas Act behind it, Emera will still need other approvals to export CNG; for example, Emera has filed an application with the U.S. Department of Energy's Office of Fossil Energy for authorization under Section 3 of the Natural Gas Act for export of natural gas.
What role will CNG exports play in the U.S.'s energy future?
Natural gas is an important fuel used globally for electric power generation, heating, and industry. Throughout most of the U.S., an abundant supply of natural gas means domestic pricing for gas is lower than overseas. This creates a potentially profitable opportunity to export natural gas from the U.S., if regulatory conditions allow.
Natural gas can be exported by pipeline as a gas, or by truck or ship as either compressed natural gas (CNG) or liquefied natural gas (LNG). Liquefying natural gas enables massive quantities of gas to be transported anywhere in the world, but requires the construction of expensive facilities to liquefy and regasify the fuel. The federal Natural Gas Act gives the Federal Energy Regulatory Commission jurisdiction over the siting and construction of most LNG facilities in the U.S., and authorizes FERC to issue certificates of public convenience and necessity for LNG facilities engaged in interstate natural gas transportation by pipeline. For example, Dominion Cove Point LNG, LP recently secured the FERC's approval for its Cove Point LNG export facility.
By comparison, compressing natural gas to high pressures is a relatively lower-cost way to improve the energy density of the fuel and reduce its transportation costs, albeit not to the degree of LNG. CNG exports are already happening, and may soon increase.
Emera recently proposed to construct a CNG compression and truck-loading facility at the existing Port of Palm Beach in Riviera Beach, Florida, in order to export CNG to the Commonwealth of the Bahamas. At the site, Emera would draw natural gas from the Riviera Lateral, a pipeline owned and operated by Peninsula Pipeline Company. Emera would then dehydrate and compress the gas to fill containers that would be loaded onto trucks. The proposed CNG facility would initially be capable of loading 6 million cubic feet per day (MMcf/d) of CNG, with expansion capabilities up to 25 MMcf/d. Once loaded onto trucks, Emera will haul the containers to a berth about a quarter mile away at the Port of Palm Beach. At the port, the containers will be loaded onto a roll-on/roll-off ocean-going carrier and shipped to Freeport, Grand Bahama Island, where the containers would be unloaded, the CNG decompressed and injected into a pipeline for transport to electric generation plants owned and operated by Emera affiliate Grand Bahama Power Company and other customers on Grand Bahama Island.
To reduce regulatory uncertainty, Emera petitioned the Federal Energy Regulatory Commission for a declaratory order that its project will not be subject to the Commission’s jurisdiction under the Natural Gas Act. Last month, a majority of the FERC Commissioners found that the construction and operation of the CNG facility described by Emera would not be subject to FERC's authority over natural gas exports under the Natural Gas Act. In particular, the majority opinion held that Emera’s facilities to compress and load CNG onto trucks are not jurisdictional export facilities.
In reaching this conclusion, the majority found that the proposed CNG facilities were unlike the border-crossing pipelines and coastal LNG terminals that the Commission traditionally has regulated under section 3 as import/export facilities, and more like existing, unregulated facilities that deliver LNG into trucks which are subsequently driven across the border into Canada or Mexico. Indeed, the opinion cites the example of Xpress Natural Gas, which has a CNG plant in Maine that receives gas from an interstate pipeline and loads CNG containers onto trucks for delivery to customers in Canada and in New England. The Commission does not regulate the CNG facility under either section 3 or 7, nor does it exercise jurisdiction over the trucks’ passage across the border under section 3.
The majority opinion similarly found that because Emera said that all of the natural gas to be compressed at Emera’s planned facility will be exported in foreign commerce to the Commonwealth of the Bahamas, the Commission’s section 7 jurisdiction over transportation and sales of gas for resale in interstate commerce would not be implicated by Emera’s proposal.
Notably, new Commissioner Norman Bay dissented from the majority opinion. Noting language in section 3 of the Natural Gas Act giving FERC jurisdiction over natural gas exports, Commissioner Bay's dissent describes the majority’s argument as that because the CNG will leave Emera’s facility by truck and travel a quarter of mile before being loaded onto ocean-going carriers for export – rather than by a pipeline running across a border or to a tanker – the facility is not an “export facility” under section 3 of the Natural Gas Act. In Commissioner Bay's words, "It cannot be that the Commission’s jurisdiction turns on this 440-yard truck journey."
With FERC regulation under the Natural Gas Act behind it, Emera will still need other approvals to export CNG; for example, Emera has filed an application with the U.S. Department of Energy's Office of Fossil Energy for authorization under Section 3 of the Natural Gas Act for export of natural gas.
What role will CNG exports play in the U.S.'s energy future?
Shell announces LNG plants for transportation sector
Wednesday, March 6, 2013
Energy company Royal Dutch Shell PLC has announced plans to build two liquified natural gas (LNG) plants in North America to produce fuel for marine and heavy-duty on-road transportation.
Shell, a global group of energy and petrochemicals companies, may be most famous for its roadside gas stations, but also operates businesses in crude oil and natural gas production, refining, marketing, and research and development. According to a press release issued yesterday, Shell and its affiliates now plan to develop two liquefaction units to turn natural gas into LNG.
By cooling natural gas to around -260°F, it can be liquefied. The resulting LNG takes up significantly less volume than the gas did, making it easier to ship and store. Unlike gas taken directly off a pipeline, LNG can also be used as a mobile fuel source for transportation. Compared to oil-based fuels such as diesel and gasoline, LNG can be less expensive and may create fewer emissions of carbon dioxide and pollutants.
Shell's newly announced plants will be built in Geismar, Louisiana and Sarnia, Ontario, Canada. The Geismar plant will supply LNG along the Mississippi River, the Intra-Coastal Waterway and to the offshore Gulf of Mexico and the onshore oil and gas exploration areas of Texas and Louisiana. Shell is partnering with companies including subsidiaries of Martin Resource Management Corporation and Edison Chouest Offshore to supply LNG fuel to marine vessels that operate in the Gulf of Mexico. Under Shell's vision, LNG produced at Geismar will be barged to Port Fourchon, Louisiana, where it will be bunkered into customer vessels. Shell also announced plans for a similar liquefaction unit at its Shell Sarnia Manufacturing Centre in Sarnia, Ontario, Canada. The Sarnia project is designed to supply LNG fuel to all five Great Lakes, their bordering U.S. states and Canadian provinces and the St. Lawrence Seaway.
Each facility will be relatively small-scale, capable of producing 250,000 tons of gas per year. According to Shell, pending final regulatory permitting, the liquefaction units may begin operations and production in about three years. Shell is currently developing a similar gas processing facility in Alberta, Canada, and plans to sell LNG at truck stops in that province.
Several years ago, energy companies rushed to develop LNG import terminals in the U.S. to increase supplies of natural gas in the interstate pipeline system. Hydraulic fracturing and the resulting development of feasible production of domestic natural gas from shale resources turned LNG imports' economics on their heads. Now that natural gas in most of the U.S. is significantly cheaper than imported LNG, companies like Cheniere Energy Inc. are now seeking to export LNG to other countries. Domestic use of LNG in the transportation sector represents an alternative way for energy companies to profit from the shale gas boom.
Shell, a global group of energy and petrochemicals companies, may be most famous for its roadside gas stations, but also operates businesses in crude oil and natural gas production, refining, marketing, and research and development. According to a press release issued yesterday, Shell and its affiliates now plan to develop two liquefaction units to turn natural gas into LNG.
By cooling natural gas to around -260°F, it can be liquefied. The resulting LNG takes up significantly less volume than the gas did, making it easier to ship and store. Unlike gas taken directly off a pipeline, LNG can also be used as a mobile fuel source for transportation. Compared to oil-based fuels such as diesel and gasoline, LNG can be less expensive and may create fewer emissions of carbon dioxide and pollutants.
Shell's newly announced plants will be built in Geismar, Louisiana and Sarnia, Ontario, Canada. The Geismar plant will supply LNG along the Mississippi River, the Intra-Coastal Waterway and to the offshore Gulf of Mexico and the onshore oil and gas exploration areas of Texas and Louisiana. Shell is partnering with companies including subsidiaries of Martin Resource Management Corporation and Edison Chouest Offshore to supply LNG fuel to marine vessels that operate in the Gulf of Mexico. Under Shell's vision, LNG produced at Geismar will be barged to Port Fourchon, Louisiana, where it will be bunkered into customer vessels. Shell also announced plans for a similar liquefaction unit at its Shell Sarnia Manufacturing Centre in Sarnia, Ontario, Canada. The Sarnia project is designed to supply LNG fuel to all five Great Lakes, their bordering U.S. states and Canadian provinces and the St. Lawrence Seaway.
Each facility will be relatively small-scale, capable of producing 250,000 tons of gas per year. According to Shell, pending final regulatory permitting, the liquefaction units may begin operations and production in about three years. Shell is currently developing a similar gas processing facility in Alberta, Canada, and plans to sell LNG at truck stops in that province.
Several years ago, energy companies rushed to develop LNG import terminals in the U.S. to increase supplies of natural gas in the interstate pipeline system. Hydraulic fracturing and the resulting development of feasible production of domestic natural gas from shale resources turned LNG imports' economics on their heads. Now that natural gas in most of the U.S. is significantly cheaper than imported LNG, companies like Cheniere Energy Inc. are now seeking to export LNG to other countries. Domestic use of LNG in the transportation sector represents an alternative way for energy companies to profit from the shale gas boom.
Subscribe to:
Posts (Atom)
