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garden bay, west coast, Canada
persistent digging,never say never

Monday, June 17, 2013

Christy Clark Goes Down The Rabbit Hole(LNG Fantasty)


The British Columbia advantage when it comes to LNG exports, our unelected gabby premier Christy Clark has been blathering about out B.C advantage, yet everywhere I look, everything I examine tells me we don`t have an advantage we actually have disadvantages..

This fact may be the catalyst for Clark negotiating all potential provincial profits gone, Christy is in panic mode, her entire election campaign was based on selling a gullible public a fantasy about $trillions flowing to our province in the form of LNG dollars, those $trillions are being negotiated down to scant $millions, and the reason is obvious, Clark needs to show the public progress on LNG export facilities being built, knowing nothing will be built or online before the next election her immediate goal is to con the public that all is well, that carries the sham through the next election and after that, after no big profits accrue she won`t care, her exit strategy will be plotted and torch be passed on to a next false prophet...

I was doing a little globe research and lo n behold I discovered that the LNG facilities in Australia, which are concentrated on or near the Barrow Islands are near 1000 nautical miles closer to Shanghai than is Prince Rupert, Australian LNG a 1000 nautical miles closer to South Korea and about 800 nautical miles closer to Japan...

With modern LNG tankers traveling about 19 knots per hour(in good sea conditions) means Australia shipping is 2 days closer than British Columbia, and considering vessels must come and go, the round trip is 4 days closer, therein Australia LNG can be shipped cheaper, 4 days plus of vessels fuel burning costs as well as staffing costs....


Prince Rupert to Shanghai.4500 Nautical Miles, Barrow Islands Australia to Shanghai, 3600 Nautical Miles...Now, as for China itself, China neighbor on the east is Russia, Russia has gobs of gas and there is existing pipeline networks into eastern China, including a massive natural gas pipeline from Kazakhstan into China, a pipeline with several spur lines with the capacity to service 500 million Chinese, in other words the eastern China market is satisfied, China will not build infrastructure from Western China(Shanghai) to the east, too costly and the market already served, so we are talking Shanghai as a import terminal when it comes to Australian LNG, and or B.C exported LNG...
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 Line A was completed in 28 months and inaugurated in December 2009. Line B became operational in October 2010. The fourth compressor station in Kazakhstan was completed in December 2010. The total cost of the project is estimated at $7.31bn.
 The China National Petroleum Corporation (CNPC) began construction of the pipeline in August 2007. CNPC Exploration and Development Company, a subsidiary of CNPC, executed the project.

The pipeline transported 4.38 billion cubic metres (bcm) of natural gas from fields in Turkmenistan, Uzbekistan and Kazakhstan to China's gas transportation network in 2010. 

In April 2006, CNPC signed a contract with Turkmenistan for supplying natural gas to China for 30 years.

China and Uzbekistan signed an agreement in June 2010, under which Uzbekistan will provide 10bcm of natural gas a year to China. As part of the agreement, Uzbekistan's gas pipeline network was connected to the Central Asia-China gas pipeline to supply natural gas.

Natural gas from Turkmen fields, such as the Samandepe gas field located near the Amu Darya River, is being fed to the pipeline. Fields in Kazakhstan, including Karachaganak, Kashagan and Tengiz, are connected to the pipeline. Gas fields in Uzbekistan also supply natural gas to the pipeline.

The natural gas supplied by the pipeline is expected to meet the growing energy demands of China. It is forecast that by 2012-13, it will have a delivery capacity of 40bcm a year."




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As you can see most of the Chinese market is being supplied, Eastern and Southern China market is gone, that leaves western China, Shanghai and surrounding areas, Australia is 2 shipping days closer, 4 days counting round trips, that shipping advantage is gone, and as for India....

Two things, we know there are many wealthy Indian millionaires, however, there are 950 million dirt poor people, we have all read about the wage levels of garment workers and farmers, 25 cents per hour, hundreds of millions more making not much more than that, the point I am making is the vast proportion of India`s people can`t afford even a $100 Canadian dollar natural gas bill per year, I don`t see that changing anytime soon...

Barrow Islands Australia to India is about 3200 nautical miles to 4400 nautical miles depending on what port you call on,...Prince Rupert to India is anywhere from 12,000 nautical miles to 16,000 nautical miles depending on which route they chose, as in going east or west, with those distances so vast the shipping costs are enormous, the spread a mile apart, for you are looking at a difference of 16 days minimum in ocean shipping times, and again, ships must come, and go, you are looking at roughly 30 days longer for a round trip to India from B.C. than Australia, in other words the Indian market for B.C LNG is not there, won`t be there in the near or long term..

That leaves us competing for Japan and South Korea, however, the Japanese market which after the Fukushima disaster LNG exports increased as other nuclear plants were shut down, that trend is being reversed, the short term outlook for LNG exports to Japan is stable to a slight decline, the long term forecast for imports of LNG to Japan is a very large decline as most nuclear facilities are coming back online, and there are other demographics at play with Japan, conservation, a small dense populous and most importantly, an aged population, demographics predict a die-off and more migration into warmer cities....Not to mention both Japan and South Korea going big into exploring the massive energy potential of ocean hydrates, hundreds and hundreds of years of supply, if indeed Japan manages to tap this energy source the world outlook for LNG to Asia is bleak, the entire industry will be thrown on its ear..
______
 "Despite weak growth in 2012, Japan`s LNG imports rose by 11.2% year over year in 2012, as the country continued to seek alternative fuels to fill the gap left by the closure of nuclear capacity, Australia replaced Malaysia as the country`s largest supplier with an increase of 13.8% in LNG exports to Japan-largely because on the coming on stream on Pluto LNG. 
Two nuclear facilities came back on line in 2012 and, despite public opposition, we believe a gradual return to higher levels on nuclear power generation will be inevitable in the medium term, indeed, the prospect of a return nuclear-fuelled power appears to have increased with the election of another Liberal Democrat party(LDP) Government, 
The new prime minister Shinzo Abe has already declared his intention to build new, much safer nuclear facilities. The previous Government had stated that an increase in renewable energy was its long term goal, our current consumption forecasts that a few more nuclear facilities will be brought back on line in 2013-2014, but in the more medium term recent gains in gas consumption will be reversed if nuclear capacity comes back on line in a more significant scale. 
A further constraint on Japan`s LNG consumption is more structural, in that the country`s geographical and population density hampers Japan`s ability in terms of gas infrastructure to significantly absorb higher volumes of LNG"
 
http://www.cmegroup.com/education/files/eiu-japan-china-driving-global-demand-2013-02-28.pdf#page=1&zoom=auto,0,792


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Well, new nuclear facilities that have no waste, efficient, thorium reactors, the same electric producing reactors China is building, and building in numbers..

____________

"The liquid fluoride thorium reactor (acronym LFTR; spoken as lifter) is a thermal breeder reactor that uses the thorium fuel cycle in a fluoride-based molten (liquid) salt fuel to achieve high operating temperatures at atmospheric pressure.

The LFTR is a type of thorium molten salt reactor (TMSR). Molten-salt-fueled reactors (MSRs) such as LFTR, where the nuclear fuel itself is in the liquid form of molten salt mixture, should not be confused with solid-fueled molten salt-cooled high temperature reactors (fluoride high-temperature reactors, FHRs).[1]

Molten salt reactors, as a class, can include both burners and breeders in fast or thermal spectra, using fluoride or chloride salt-based fuels and a range of fissile or fertile consumables. LFTR refers to a particular design subset of MSRs defined by use of fluoride fuel salts and breeding of thorium into uranium-233 in the thermal spectrum.

In a LFTR, thorium and uranium-233 are dissolved in carrier salts, forming a liquid fuel. In a typical operation, the liquid fuel salt is pumped between a critical core and an external heat exchanger where the heat is transferred to a nonradioactive secondary salt. The secondary salt then transfers its heat again to a steam turbine or closed-cycle gas turbine.[2]

This technology was first investigated at the Oak Ridge National Laboratory Molten-Salt Reactor Experiment in the 1960s. It has recently been the subject of a renewed interest worldwide.[3] Japan, China, the UK, as well as private US, Czech and Australian companies have expressed intent to develop and commercialize the technology.

LFTRs are a particular class of molten salt reactor that includes several design variations. LFTRs differ from other power reactors in almost every aspect: thorium fuel cycle, low operating pressure, liquid fuel, salt coolant, higher operating temperature, and online refueling and reprocessing. The unique characteristics of a LFTR give rise to many potential advantages and also to a number of design challenges. This article addresses some LFTR reactor design variations and their advantages and disadvantages. Power conversion cycles that could be used to generate electricity with a LFTR are discussed, as well as online removal of fission products which is an important aspect of LFTRs."

 http://en.wikipedia.org/wiki/Liquid_fluoride_thorium_reactor
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So basically, the Japanese market is dead, the only way Japan will buy BC LNG is if the price is cheap, very cheap, and therein lies the problem, all that fracking, all that heavy water use, billions of gallons of water injected deep underground, laden with chemicals, so desperate is Christy Clark to get big energy companies to build in BC that she is now giving away the immense profits she campaigned on, ...Before the election Christy Clark claimed LNG taxes and royalties(based on the Australian LNG taxation formula) were going to pay off BC Hydro`s debt, BC Ferries debt, our provincial debt, pay off bridge tolls, fund more money for health and hospitals, education and teachers as well as creating a prosperity fund with hundreds of $billions of dollars for future generations..

The BC Government paid for Ernst and Young to throw some fiscal numbers togother based on the Australian taxation model, they also used extensive volumes of exported LNG too, numbers that are unrealisticly large, this was done pre-election..

http://www.empr.gov.bc.ca/OG/Documents/Ernst%20and%20Young%20-%20LNG%20Revenue.pdf

At that time Christy Clark stated that her taxation model would mimic the Australian model..David Schreck also broke-down some taxation and LNG export volumes too..

http://www.strategicthoughts.com/record2013/LNGsupertax.html


Last week we learned that Christy Clark is in negotiations with energy companies on LNG taxation, or more aptly, Clark is negotiating downward, industry has scoffed at Clark`s taxation model, the numbers Christy Clark talked about pre-election are off the table, off the table in a big way, as in next to nothing in taxation, and even with that industry isn`t jumping up and down to start building in B.C...

http://blogs.wsj.com/canadarealtime/2013/06/14/british-columbia-working-with-industry-on-proposed-lng-taxes/

The Vancouver Sun and BC Government spinners have been milking the Petronas proposal for all its worth, they are spinning, Petronas has no long-term buyers yet, Japex is not a customer, Japex in the Japanese Government who have bought a 10% equity stake in the proposal, customers are not equity investors, TransCanada who has been approached by Petronas to build the pipeline to Prince Rupert from northeast B.C. are not a contractor but a partner in the proposal, in other words, we have the Japan Government wanting a cheap gas deal, we have TransCanada(pipeline company) needing profits, healthy profits to make both new money and pay for a $5 billion dollar pipeline, and we have Petronas, also known as the Malaysian Government, a company that provides the Malaysian Government 50% of its entire budget, they want super profits too,

That is the catalyst for these desparate negotiations with industry on taxation and royalties, the Australian taxation model is now gone, and so are Christy Clark`s fantasy pre-election numbers..

And more, Japan has supply, China has supply, South Korea has supply, the only way to get market share with these countries, considering we have no shipping advantage over Australia is to lowball the price, lowball any provincial share we might have seen..

I have more very interesting LNG data from The Economist Intelligence Unit, very interesting indeed..

___________

"LNG in Canada has government support but needs..
 huge investment
Companies operating in Canada are also seeking..

 to begin LNG exports. Traditionally, 

Canada has exported its surplus gas to the US market, but
the shale gas boom in the US is reducing demand for these flows. 

Partly because of the original focus on the US market, ...

Canada lacks the infrastructure required to quickly become an LNG exporter.
Canada's gas is found in interior British Columbia and Alberta,...

 some distance from the coast...

 and with no existing infrastructure linking the sites to ports.

As of February....

Three export projects had been granted licences by Canada's National Energy Board; ..

the latest of these was a licence granted in early February to the LNG Canada Development consortium,...

 led by Shell and including PetroChina, Mitsubishi and Korea Gas...

 Kitimat LNG, co-owned by the US's Apache and Chevron,...

 was granted a licence in 2011,....

 while (US/First Nation) BC LNGExport Co-operative received....

 one early in 2012. None of these projects, which will target
Asian markets, is likely to come on stream much before 2020.

Once the infrastructure is in place, Canadian gas would....

, in theory, have an advantage over its US counterpart....

 (assuming that US gas will be exported from the US east coast)....

, as shipping times would be shorter.....


However, the price of Canadian LNG is expected to be oil-indexed..

, and the costs involved in building the terminals and infrastructure will be huge.
Given that there could be additional costs associated...

 with allaying environmental and First Nation concerns....

 about the projects,....

 it remains to be seen whether Canadian LNG will be....

 price competitive compared with US LNG."


 
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So here we have our unelected premier offering up,..

 I mean giving away taxation and royalties to industry as a sop..

 so they will build, and build fast,...

 but that creates a another problem,....

 these LNG plants proposed for British Columbia won`t be built here..

 at all, they will be built in South Korea in modular form,....

 barged to either Kitimat or Prince Rupert and put together ...

like a big jigsaw puzzle, .....

Nothing for these plants will be manufactured in British Columbia,..

 well..

So maybe you think these LNG plants will employ thousands...

 and B.C. will reap large on income taxes,...

 you would be wrong,...

 as the BG(British Gas) group said earlier this year, ...


the modules will be built in Asia, barged to B.C....

 and assembled,....

 once up and running the most massive of all the proposals,..

 according to the BG group will employ...

 a mere 250 plant employees...

 with perhaps another 250 spinoff jobs throughout the province..

Meaning even if 4 LNG plants were built(the big ones)..

 employment would number roughly 1000 employees ..

with about 1000 spinoff jobs..




I was already initially skeptical, and I`m not talking about temporary construction jobs, we are talking about the facilities get built, they are in operation, how many workers will they employ?..Because the BC Liberal 2013 election platform is quite specific... And I quote..

____________
 
"LNG facilities are currently proposed by business groups that include some of the world`s biggest energy companies-Shell, Imperial, Chevron, British Gas, Petronas, SK & and ES of South Korea, Inpex and the Chinese National Offshore Oil Corporation, to name some of the major players, it`s no fantasy.
The projects mean 39,000 jobs to British Columbia during construction with another 75,000 full time jobs created once in operation. We can create 1 $trillion dollars in economic activity and create the BC Prosperity fund with $100 billion over 30 years.

An opportunity this good faces lots of global competition. Premier Christy Clark and Today`s BC Liberals have worked diligently to enable LNG as an economic generator for decades to come."

(BC Liberal platform at below link)

http://files.flipsnack.com/iframe/embed.html?hash=fhcjsxtd&wmode=window&bgcolor=EEEEEE&t=13660594461366059618

________

There is the smoking gun evidence, from the BC Liberal platform...39,000 construction jobs and 75,00 full-time jobs once in operation..

That whole number thing seems backwards from the git-go, normally there are more during construction jobs than the full time after everything is built job numbers....

Do you see those job numbers in the BC Liberal election platform...

"39,000 jobs to British Columbia during construction with another 75,000 full time jobs created once in operation"

How many LNG plants are being proposed, we have heard these Liberals say 4 LNG plants, 6 LNG plants, 8 LNG plants...

Well, there was an article in the Vancouver Sun earlier this year, the BG Group(British Gas) announced they are going to the planning stage, then if that goes well they will apply for an environmental assessment, no they haven`t made any firm commitments, it`s still very early in the process, they mention something about, if everything goes well they will start assembly of their LNG plant in 2016..

But what is absolutely startling is the honesty in the article, honesty from a major world class energy company..

What British Gas has stated in the article is this...

________

"The BG Group has filed plans for a liquefied natural gas plant at Prince Rupert that would consume the equivalent to all of the province’s current production of natural gas and almost all the energy generated by BC Hydro’s proposed Site C dam to produce it."

_____

Do you see that? This one LNG plant will consume all the present natural gas production in British Columbia, that`s not the scary part, what is stated in the article puts "Christy Clark and Today`s BC Liberal`s" jobs number to shame, this article makes a complete mockery of what the Liberals are stating in their 2013 election platform..

___________

"BG intends to build a facility on Ridley Island capable of producing 21 million tonnes of LNG a year. Called Prince Rupert LNG, it would be built overseas in modules and shipped to Prince Rupert for assembly.

 Even so, the plant would create 3,500 jobs during construction,

 250 permanent direct jobs and another 250 spinoff jobs.

 BG says it is planning to build it in two phases, beginning in 2016.
The first phase — two seven-million-tonne-a-year processing units, or trains — is to be completed by 2021" 
________

Do you see that?....3500 temporary construction jobs, 250 full-time jobs with 250 full-time spinoff jobs...

Well well well, let`s take the 6 LNG export plants scenario,  first off, the plants are built in Asia, shipped here and assembled, that`s a problem, but the bigger problem is the job numbers..This British Gas project is a biggy, so big it will not only take all our present natural gas production it will also require all the power generated by the proposed $12 billion dollar public taxpayer project known as Site C Dam..

______

"The scope of the project is huge: All three trains would consume about 3.3 billion cubic feet of gas a day, which is the equivalent of B.C.’s current natural gas production. The plant will require 800 megawatts of energy to run refrigeration compressors and to run the facility. By comparison, the Site C dam would produce 900 megawatts"

__________

The British Columbia advantage is industry`s advantage, they have the BC Liberals over a barrel, Christy Clark has gone cap in hand begging for an LNG build before 2017...She is giving away the farm, the Australian LNG taxation model is gone, Christy isn`t negotiating up but down...

Her LNG windfall claims was a lie, the employment numbers associated with LNG is a lie, the future market growth forecasts are a lie...

In 2011 and 2012 combined British Columbia made less than $400 million dollars on natural gas, these big energy companies want free hydro-electric and cut-rate royalty rates..

Whatever gets announced, whatever goes forward who knows, there is only one thing I am sure of...

Taxation schemes, royalty schemes for energy companies dealing with British Columbia will be a secret, no prying public eyes will be allowed to see the details, it will be called proprietary concerns, and will be shrouded in cabinet secrecy..

Remember, we paid $12 million dollars for a fake Bollywood award show, I wonder how much this illusion will cost us..




The Straight Goods

Cheers Eyes Wide Open 




3 comments:

Anonymous said...

Christy is like the LNG industry in BC. You can't even give it away.

Anonymous said...

Christy is like the first grader (she did get first grade) who gets caught up in a fantasy and then attempts to perpetuate it with one grand fable after another until it becomes incredible. And like a first grader she has no idea when to stifle the yarn and regain reality.
Beg, borrow or rent a wheel chair ($25/month) and show up in West-Kelowna on July 10th.
Its our last chance to stop this reign of terror!
John's Aghast

Anonymous said...

How many people saw the bc Bollywood show .? None.?