Here's some "great" news for Marcellus Shale people

Who are they trying to kid? Do they think we are dummies? They came here, are ruining the water and woods, pay NO gas tax and this is what PA gets for welcoming them.  That's as bad as the Alaskan pipeline who sells 75% (what I heard) going overseas. Obama's termination/reductions budget wants all of us to tighten our belt on fossil fuels to the point of not using any at all, but who can afford solar, wind, or geothermal sources? 

This makes me furious.

Marcellus shale gas may head overseas

By Lou Kilzer and Andrew Conte
TRIBUNE-REVIEW
Sunday, April 10, 2011

Drilling companies rapidly expanding their U.S. operations in places such as Pennsylvania's vast Marcellus shale formation repeatedly tout they are providing American jobs and securing the nation's energy future.

Yet, a Tribune-Review examination found foreign companies are buying significant shares of these drilling projects and making plans for facilities to liquify and ship more of that natural gas overseas.

A leading player in the natural gas grab is China, whose thirst for energy to fuel its industrial explosion is growing rapidly. Others include the governments of South Korea and India, and companies in Great Britain, the Netherlands, Norway, Japan and Australia.

"They're going to come in, extract all this stuff for next-to-nothing, and make global profits off it," said Pittsburgh Councilman Doug Shields. "This is beads for Manhattan, in a global sense."

Much of the salesmanship to promote gas exploration nationwide, and especially in Pennsylvania, pressed the point that the country must become less dependent upon foreign energy sources.

It avoided discussion about exporting that gas overseas.

“The implications are great,” said Paul Cicio, president of Industrial Energy Consumers of America, which represents large U.S. manufacturers. He believes exporting newfound natural gas is a strategic blunder that will cost American manufacturing jobs by hiking the price of gas here.

"This is not good for our country,” he said.

Bill Newman, a New York lawyer who often represents foreign clients, sees things differently. “We have a shortage of capital in this country,” he said. “In the 19th century, the railroads almost broke us.” He said he believes foreign investment in the United States can work like it did in supporting the railroads.

Patrick Henderson, senior adviser on energy matters to Gov. Tom Corbett, said the possible export of Marcellus gas overseas “doesn't hurt the argument that we need to develop the resource.” He said it underscores that the United States needs to develop technology that uses natural gas.

“Exporting is generally a good thing, though our first choice would be to use it here," he said. Corbett doesn't believe Pennsylvania should tax Marcellus shale gas aimed for overseas because it would be difficult “to craft a tax” based on where the gas is used, he said.

The relatively new technology called hydraulic fracturing, or “fracking,” to free gas from deep shale formations is helping America move from importing natural gas to potentially supplying it to the world.

Foreign companies generally are investing in Marcellus shale because they want a good return, rather than assets, said Kathryn Klaber, president of Marcellus Shale Coalition.

"We should be celebrating the foreign investment that is helping to finance domestic energy production and that is benefiting Pennsylvanians in the prices they're paying for energy," Klaber said.

SUPPLY AND DEMAND

Pennsylvania sits above the sweet spot for one of the world's largest natural gas deposits, trapped in a rock layer a mile below the surface known as Marcellus shale. The Marcellus Shale Coalition, an industry trade group, issued a report last week saying the United States could take advantage of that gas by converting more vehicles to use it. Many vehicles in South Korea, for example, are powered by natural gas instead of gasoline.

The United States could become an exporter of liquified natural gas because supply and demand determines gas sales here, whereas sales in Asian markets and Europe are formulated on the price of oil. Sometimes, Cicio said, that works in the United States' favor when oil is cheap, but it can hurt when oil rises in price.

Foreign countries will do what it takes to get natural resources they need, said Mel Packer, an organizer with Marcellus Protest, a citizens group based in Washington, Pa., that opposes drilling ecause of environmental concerns.

"They're going to buy them where they can get them," Packer said. "If that means buying whole corporations to get the assets, that's what they're going to do."

Two companies — Cheniere Energy Partners and Freeport LNG Development — are seeking government permits to export liquified gas, according to the Federal Energy Regulatory Commission.

A Chinese firm, ENN Energy Trading Co., signed a memorandum of understanding to send 1.5 million tons of natural gas from Cheniere, a Houston-based company operating the Sabine Pass port in Louisiana.

“We are excited to participate in supplying natural gas to China,” Cheniere CEO Charif Souki said in a news release.

Two other port companies are expected to seek permission soon, said Biliana Pehlivanova, a natural gas analyst with Barclay's Capital investment bank in New York.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           One is Virginia-based Dominion Resources, which has Pittsburgh offices and owns a liquified natural gas terminal and port in Cove Point, Md. The facility could be converted into an export facility for Marcellus shale gas by 2015, but spokesman Dan Donovan said the company has not decided whether to do so and has not sought export permits.

"We are talking to our producers,” he said.

Dominion's Cove Point facility takes in imported liquified natural gas from BP in Great Britain, Shell in the Netherlands and Statoil in Norway. Statoil and Shell are investing heavily in the Marcellus formation.

Last year, Warrendale-based East Resources sold its Marcellus interests to Royal Dutch Shell for $4.7 billion. Last month, Statoil, which has a $3.375 billion partnership agreement with the largest Marcellus leaseholder, Oklahoma City-based Chesapeake Energy, said it might drill as many as 17,000 Marcellus wells over two decades.

Other foreign companies with Marcellus shale interests are Mitsui and Sumitomo from Japan, the BP group from Great Britain, Atinum from Korea and Reliance Industries from India.