FMC Commissioner Gives Keynote on Panama Canal
Commissioner William P. Doyle of the Federal Maritime Commission, has given the keynote address at the Eno Center for Transportation Forum on the Panama Canal entitled: Lessons Learned and Implications for World Commerce. His comments on the future of the canal's LNG trade are also extracted below.
Commissioner Doyle noted that the Obama Administration, members of Congress and state and local officials support the tremendous economic, business, job-supporting, energy and transportation related opportunities the expanded Canal will bring to the United States.
The Commissioner also addressed: The Administration’s efforts to expedite regulatory reviews of infrastructure projects, the Panama and Suez trade routes, recent progress on discussions for slot and transit fees associated with the expanded Canal, and LNG export potential through the Canal.
Extract from the speech: LNG Exports — Preparing for the Expanded Canal
"I would like to provide an example of a new type of U.S. manufactured export product that could really benefit from the expansion of the Panama Canal.
Not long ago the United States was positioning itself to be the world’s largest importer of natural gas. In 2006 there were approximately 50 proposed liquefied natural gas (LNG) import projects in some stage of regulatory review. 20 The U.S. was on the verge of becoming ever more reliant on the Middle East for its natural gas.
That all changed in 2008 when the independent natural gas producers in the U.S. proved that abundant amounts of natural gas could be extracted and produced from shale basins in places like the Pennsylvania, Ohio and West Virginia. Indeed, these producers perfected the technique known as horizontal multistage hydraulic fracturing.
Today, the U.S. has not only slashed its imports of natural gas from overseas, but we are on the verge of becoming a major competitor on the supply-side of natural gas through our LNG exports.
The world’s largest market for liquefied natural gas is Asia. As it stands now, South Korea and Japan are the largest importers of LNG. In the coming years, China may be added to that list.
With the Dominion Cove Point decision issued by the Department of Energy last Wednesday, the Obama administration has now authorized 6.37 billion cubic feet of liquefied natural gas to be sold overseas. 24 Dominion, located in Maryland, is the first East Coast export project that has been approved and it is the closest terminal to Appalachia’s Marcellus and Utica shale formations.
Previously, the Energy Department approved conditional export licenses to three Gulf Coast terminals: Lake Charles, Louisiana project, as well as the Freeport LNG project on Quintana Island, Texas, and, in 2011, Houston-based Cheniere Energy’s Sabine Pass facility in southwest Louisiana.
How do we get the domestically produced natural gas into the export market?
Once the expanded Panama Canal opens, the distance to ship U.S. natural gas from the Gulf Coast of the United States to Asia will decrease by 9,000 miles. 25 Only 21 of the existing global fleet of 370 LNG tankers can currently fit through the Panama Canal. 26 None use the Canal.
However, more than 80 % of the tankers will be able to make the passage through the Canal once the widening is complete (Platou Consultants). 27 The U.S. will be competing with Australia, Russia, East Africa and the Middle East as a natural gas supplier for Asia. The development of U.S. natural gas resources, together with the Panama Canal Expansion, will have a transformative impact on the U.S. energy and transportation landscape, helping to improve our energy security while spurring economic development and job creation around the country."
The full speech is available at:
http://www.fmc.gov/commissioner_doyles_keynote_address_to_the_eno_center_for_transportations_forum_on_the_panama_canal/
