LNG Black Swans Appear, Christy Clark Keeps Clucking

Harvey Oberfeld is so old, so stale and I believe, now senile, besides him ranting about perceived Quebec racism and First Nation`s robbing Canada blind he really has become a bore...Oberfeld`s latest advice to the NDP, allow all big industrial projects to go through, greenlight everything, don`t bother with those pesky environmental reviews, ..Oberfeld wants jobs jobs and more jobs..

Thank goodness Harvey Oberfeld is close to being finished, imagine if he was deciding your children`s future, a tired old man who`s views went out with the tide decades ago, ...Just look at Alberta, they have never extracted more tar oil then now, they have never pollutued as much as today yet with all that development Alberta is shuttering hospital beds, cutting services and running massive multi0billion dollar deficits, five straight years of red ink with number with number six approaching..

Enbridge pipeline if built would create maybe 100 full-time jobs, LNG plants if built would create maybe 200 full-time jobs, yet one major oil tanker spill would destroy 10,000 jobs, .....

Harvey Oberfeld`s post from the 1950`s is here...

http://harveyoberfeld.ca/blog/ndp-needs-new-philosophy-and-policies-not-just-new-leader/

And I found this comment from Laura to be the most compelling, and yes, Oberfeld ridiculed and blew her off, Oberfeld is a RED..:Retired extremely dangerous,... his ideology is dangerous, his mental faculties diminished,
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Laura // Sep 19, 2013 at 11:06 pm.

 

Harv, the policies you advocate don’t work. You stated that you need government to give the go-ahead to all these projects so as to pay for the social programs NDPers want to see.
Well, we’ve had that kind of government for the last 12 years and social programs are worse than they were in the 1990s and debt has ballooned to a size nobody would have expected back in 2001.
You and lot of the posters here were raised in the 50s and 60s and still advocate the same policies in vogue then. This isn’t 1950 anymore, we know from experience that wide-open development doesn’t generate lasting wealth or great social programs.
Booms eventually turn to busts and bills have to be paid and land cleaned up.
You older guys still believe in a free lunch, that you just start cranking up the machinery and mow down a forest or two and divert a river and bob’s your uncle, we’re all rich.
The world doesn’t work that way any more. If it did we’d all be rich after 12 years of Liberal rule.

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And Laura is right, British Columbia for the last 13 years has been Governed by business friendly BC Liberals, they said yes to Run of River..yes to expanded coal mines, yes to outsourcing, yes to smart meters, yes to fish farms, yes to privatizing our crown forests, yes to deregulation and just look at us now..

wild salmon stocks are in big trouble, diseased farmed fish are killing our natural British Columbia wild salmon, the forests are sick, tree planting and reforestation ignored, BC Hydro is broke, our Government is racking up $5 to $10 billion dollars in new debt each year, from a provincial debt of $29 billion in 2001 to a provincial debt of $170 billion in 2013..not counting BC Ferry debt, BC Hydro debt....After 13 years of following Harvey Oberfeld`s advice BC Ferries are unaffordable for most, BC Hydro rates are about to skyrocket and Translink is going digging for coins in all your pockets, bridge tolls, user fees and services being cut... And Oberfeld`s advice to the NDP is to ramp up the same policies that have driven us to near bankruptcy.....

RED....and not worth reading...anymore, senility has taken hold, selective garbage in means selective garbage out, ....A Stephen Harper bootlicking toad...

  Anywho, this article is about the cluck cluck clucking coming from Christy Clark on natural gas...

It really is getting silly, we had Rich Coleman announcing $115 million in subsidies on a "proposed $320 million dollars" worth of little projects, this was, is a sign of desperation, this so-called $trillion dollar industry needed a subsidy to get some upstream roads built, some short well-head pipeline connections, and..and the reason why these tax breaks were announced is because none of these projects are getting done unless someone, anyone decides to actually build a real LNG plant, these little projects are cart before horse operations....

And more, Tides Canada released a study on how dirty our BC natural gas is and that scrubbing technology and carbon capture and storage must be implemented by the big energy companies...now let me be clear, Tides Canada is correct, our BC gas is dirty, despite Christy Clark blathering about how clean our gas is and how cold it is compared to other jurisdictions..

Those are both flat-out lies made by Clark, we have dirty gas and deep gas, the deeper you go underground the hotter it gets, thus costing more to freeze..Well, science, facts or indisputable data never did get in the way of Christy flapping her gums..as one pundit blogger said of Christy Clark...

"wiggle the hips and shoot from the lip Christy"...Priceless..

And then there is the group of mayors from rural BC and the useless Robin Austin of the NDP...These northern mayors are asking for LNG revenue sharing, asking for revenue sharing on something that doesn`t exist today, tomorrow or even in 2018..There might be a single operation up and running by 2021...8 years from now, surely there must be issues of today worth discussing, ..

There are some major LNG happenings going on, bad happenings, as in bad news for British Columbia..

Japan, ...Japanese electric utility companies are going broke buying LNG, Chubu Electric for the first time in 33 years can`t pay a dividend, the same situation is happening with all of Japan`s electricity suppliers, they are either losing money or barely breaking even and they can`t pass on anymore of the cost to consumers, a catch 22 situation...

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Chubu Electric to forgo half-year dividend payment, 1st in 33 yrs

 

Chubu Electric has not decided yet what to do with year-end dividend, according to the sources. It will likely come up with a decision after watching how far it can streamline operations to balance costs and profits.
Electric power companies are under stress after nuclear power plants have been taken off-line after the Fukushima crisis in March 2011.
In the fiscal year that ended March 31, 2013, six of Japan's nine major utilities that have nuclear power plants have decided to forgo dividend payments.

In the April-June quarter of this year, six utilities, excluding Tokyo, Tohoku and Hokuriku electric power companies, posted consolidated losses. Kansai Electric is planning to skip semiannual dividend payments this year.
Chubu Electric marked 32.1 billion yen in consolidated loss in fiscal 2012, the second straight year of loss, but managed to pay 50 yen per share in the annual dividend by drawing down on reserve funds.

 http://www.globalpost.com/dispatch/news/kyodo-news-international/130913/chubu-electric-forgo-half-year-dividend-payment-1st-33

 

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It is just a matter of time, either cheap LNG or the nuclear facilities are starting up, money talks, energy blackmail from LNG energy companies and British Columbia walk..

The below data is from a very interesting PDF file ...The very last line cut n pasted says it all....

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The Fukushima disaster has since mid-2011

led to a surge in LNG demand to compensate for the loss

of nuclear generation capacity (at a time of slow growth in global LNG supply)This has resulted in a redirection of LNG supplies (contracted and flexible) away from Europe and towards Asia. Although this could be expected to lead to a

major shift in European gas supply patterns this has not occurre due to a continued slump in European natural gas demand through a combination of the economic recession, and increased power generation by coal and renewables at the expense of gas

.

In Japan the loss of nuclear generation capacity and the consequent increase in the use of LNG at oil-indexed

prices has resulted in the power generation utility companies being unable to pass on the full costs of generation to end-consumers.

As a consequence most are either losing money or at best barely breaking even. Not surprisingly this has led to increasing discontent with continuing with LNG pricing mechanisms based on a linkage to crude oil prices.

A ‘prospective’ Black Swan which is exercising minds from Moscow to Tokyo is the increasingly probability of the export of

significant volumes of LNG from the US.In part this builds onthe

second bullet whereby the emergence of shale gas growth post 2008 in the US rendered the 200 bcma of regas facilities constructed in North America almost redundant.These stranded assets however serve to provide a base for conversion to LNG export facilities at a lower incremental investment costs than

greenfield LNG projects in the rest of the world. We will return to this development and its possible consequences later in the paper.

What can be learned from the developments of the last 20 years in terms of regional gas markets and the

impact of unforeseen changes? We observed

that due to the low energy density of natural gas, regional

markets historically tended to develop in isolation LNG in its early (pre 2005) era tended to follow a ‘tramline’model with rigid long term contracts defining specific supplier to consuming country supply routes. Absent the ‘Black Swan’ events bulleted above we might reasonably have expected the status quo to have continued with the key natural gas consuming regions existing in parallel universes with their own specific contracting and price formation mechanisms. What these 

events did however, was to offer individual players the option to 

a) stick with established behaviours and incurlower financial rewards or even losses, or, b) take advantage of unforeseen

opportunities, even where this may require contract renegotiation or infrastructure investment. Enlightened

self-interest generally tends toward

s option b) and as in the wider history of commerce, inter-regional trade exerts a powerful influence on its participants as they adapt to changing circumstances. The evolutionary adaptation in response to the gas world Black Swans has set in motion a ‘Darwinian’ dynamic, currently playing out in Europe and potentially to be catalysed in Asia through US LNG exports.

What we can conclude from this can be summed up the following simple statements:

•The ‘old’ systems based on separate regional contracting structures and price formation mechanisms

were/are ‘fragile’ when faced with Black Swan events.

•Things change when buyer and seller both see value through inter-regional new trade opportunities.

•Things change when big players lose big money

 http://www.gastechnology.org/Training/Documents/LNG17-proceedings/4-Howard_Rogers.pdf

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I recommend you read the whole PDF, a good read..

But let me cut to the chase...Japan is going to be doing several things, these things Japan will do are a matter of financial survival..

Japan will restart their nuclear facilities.

Japan will have LNG futures linked the Henry Hub pricing in north America..

Just think about these scenarios,  Japan is going bankrupt over LNG prices, the people of Japan can`t afford higher energy prices, ..

Japan is the wealthiest per capita of any Asian country..Christy clucking Clark is talking about LNG to China and India..

Well Christy...if Japan and Japanese people can`t afford imported LNG, if Japanese electrical utility companies can`t afford LNG how do you expect India to afford high-priced LNG?...Those Indian`s average wage is 1/10 that of Japanese people, those 25 cent per hour garment workers, hundreds of millions surviving on $1 dollar per day, how much LNG can they buy?...And China....Russia has export capacity available and pipelines directly into China, ....and again, Chinese people make far less money per capita than the Japanese..

That Asian price premium in the future is gone....

Henry hub will in my opinion rise to $6 dollars and Europe and Asia`s LNG price will fall to $10 per BTU...

There is but one thing to remember about BC`s LNG fantasy..

"•Things change when buyer and seller both see value through inter-regional new trade opportunities.

•Things change when big players lose big money"

http://www.asianpacificpost.com/article/5770-asian-buyers-want-cheaper-bc-gas.html

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P.S....

A note to all my readers, I can be harsh and critical,  the Fraser institute and big industry have had their way for decades, corporations are getting wealthier and paying less tax, nation after nation is going deeper in debt, VAT taxes, consumer taxes, road tolls, services cut, pensions cut, we give more and more while receiving less and less...At one time one parent only was needed to work to support the family, now it is two parents working, less kids and more debt, British Columbia`s lower mainland has become a stagnant shithole, millionaires and peasants, families are leaving B.C..

Wildlife and green-spaces are becoming rare, species going extinct, insanity is doing the same thing over and over again while expecting different results....you know, like the corporates are going to take care of us, we just need to give more, take less and look the other way...

The Fraser institute and corporate powers are taking over, the false promise of jobs and prosperity if we just give them more, ...

Harvey Oberfeld is too old and stuck in a time warp to comment, a nice man but now delusional..

Without fresh water, salmon filled rivers, clear skies and breathable air, without those few items we will become another stinky hell-hole like Fort McMurray or a smoggy lung choking den of corruption like Beijing China.

Corporations don`t care about you or your children, and those close to the edge should shut their mouth..

The Straight Goods

Cheers Eyes Wide Open