Platts Inside Energy
A key Democratic senator Thursday reiterated his concerns that a study of US exports of liquefied natural gas is "seriously flawed" and should not be used to grant permits.
Oregon Senator Ron Wyden, who is the incoming chairman of the Senate Energy and Natural Resources Committee, said in a letter to Energy Secretary Steven Chu that the study uses outdated data that contradicts more recent projections by DOE's own Energy Information Administration on future US energy consumption.
"The shortcomings of the ... study are numerous and render this study insufficient for the department to use in any export determination," Wyden said. The study "would need to be updated with new EIA projections, more realistic market assumptions, regional impacts of the proposed actual export terminals, and evaluations of the actual impacts on consumers and businesses of exporting LNG."
Officials with DOE could not be reached for comment by press time.
Wyden has long expressed concerns about the domestic impact of expanding LNG exports to countries which do not have free-trade agreements with the US. He said in his letter that even with the current US gas boom, the DOE study failed to consider significant domestic demand growth that many experts project will occur over the next decade, particularly in the form of gas-intensive manufacturing and chemical facilities.
The study also does not take into account the potential impact of Canadian LNG exports on US prices, Wyden wrote. And he said DOE needs to establish clear criteria for approving LNG export applications.
Wyden s letter came as industry sent different signals on LNG exports.
A new coalition comprising Alcoa, Celanese Corporation, Dow Chemical, Eastman Chemical, Nucor Corporation and the American Public Gas Association announced its plans to lobby against more LNG exports, and released a survey claiming 81% of voters favor such restrictions until a better understanding of their impact on domestic gas prices is available.
Dow and other heavy industrial users of gas are planning to spend billions of dollars on new plants in the US, but they may be deterred by uncertainty over LNG exports and prices, George Biltz, vice president of energy and climate change at DOW, said at a news conferences for the new coalition, called America s Energy Advantage.
But the US Chamber of Commerce said LNG exports would help bolster gas prices, which have been lagging for some time, and encourage more production.
"If they don't do something to stimulate a little increase in the price of LNG, no one's going to take [gas] out of the ground, that's a fundamental reality," Thomas Donohue, the chamber s president and CEO, told reporters in Washington.
Fitch cites shale’s industrial impact
The emergence of shale gas as enormous energy resource for the US will provide a huge boost to manufacturing but not to the nation s energy independence, FitchRatings said in a report Thursday.
"The primary impact of shale gas will be lower costs for US industry and consumers and expanded capacity and profits for petrochemical companies and energy-intensive material producers [like] steel and other metals, cement, pulp and fertilizer," said the report, "Shale Boom: A Boost to Manufacturing but not to Energy Independence."
"Net oil imports have decreased and will continue to decrease, but the US will not achieve energy independence [defined as zero net imports] over the near to medium term," FitchRatings said.
Net US oil imports fell to 8.5 million b/d in 2011, from 12.5 million b/d in 2005, FitchRatings said.
The report said shale gas and oil production, if allowed to continue to expand, will also provide other comparative advantages for the US economy, including lower transportation costs.
Among other findings, the report said the benefits of reducing consumption, often overlooked by analysts, will likely be more important than increasing oil and gas production because the changes in technology associated with fuel savings and building energy efficiency are permanent.
Treasury renewable payments hit $16B
The Treasury Department provided 851 renewable-energy projects with $1.9 billion from its 1603 cash-grant program in lieu of tax credits between September 10 and December 5, 2012, the agency said Thursday.
The reimbursements are equal to 30% of the cost of construction of any of 11 types of renewable projects, including wind, solar, geothermal, biomass, fuel-cel, and landfill developments. Treasury first started making the payments in September 2009.
All told, Treasury has handed out more than $15.9 billion in 1603 reimbursements to 8,273 projects as of December 5.
Congress created the program under the American Recovery and Reinvestment Act of 2009.
Following the financial crisis of late 2008, Congress was concerned that renewable developers would abandon their projects because of difficulties obtaining financing. In approving the provision, lawmakers said production and investment tax credits available to solar- and wind-energy developers appeared to be inadequate at the time.
The law initially set up the program to run for two years, but Congress provided extensions until the end of 2012 for qualified wind-energy projects and the end of 2016 for qualified solar projects.
The most recent three-month period cited by Treasury, wind projects received the largest reimbursements and solar projects got the most payments a trend that has existed since the start of the program.