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Chevron Calls End to New Liquified Natural Gas Mega Projects
- jacques_chester 10y agoTo put this in perspective, the population of Western Australia is about 2.6 million people. Most of those -- around 2 million -- live in Perth. Around $33k spent for every many, woman and child in the state. A lot of that $88 billion (Gorgon and Wheatstone) was spent on local labour and supplies. And Gorgon was one capital project. At the height of the boom, there were hundreds of billions of dollars of capital projects underway simultaneously across Australia. When I was last in SF a few months ago it reminded me of Perth at the height of the boom. And I found it unsettling.
- PhantomGremlin 10y agoI hadn't thought about it until now, but Canada and Australia are very similar in several respects. They both have vast natural resources, and the population of both is found mostly in small regions. In Australia it's mostly along some of the coast. In Canada it's mostly in a small strip just to the north of the USA. Contrast to Europe. Lots of population everywhere. Contrast to the USA. The eastern third of the country is quite developed, as is a good part of California.
- trome 10y agoJust ignore Portland, Seattle and the entirety of NorCal, along with Denver/Boulder, and a bunch of other large cities in what some call the "flyover" parts of the US.
- saryant 10y agoAlso the 27 million people living in Texas.
- nkoren 10y agoTexas is 695,662 km^2. That's larger than the combined area of Germany, Belgium, the Netherlands, Denmark, and Great Britain (682,034 km^2), which have a combined population of more than 174 million people. So, yes, Texas is comparatively under-developed.
- soundwave106 10y agoEven regarding Texas, about 16 million of those 27 million live in just 4 metro areas (Dallas, Houston, Austin, San Antonio). Most of the the development, large metros included, is in the eastern half which is a fair bit less arid. Texas has 8 counties that make the top 50 least populous counties by density (https://en.wikipedia.org/wiki/County_statistics_of_the_United_States https://en.wikipedia.org/wiki/County_statistics_of_the_Unite...). It fits a pattern that also fits Australia and Canada... people don't want to live as much where it is extremely dry, or extremely hot / cold.
- jacobolus 10y agoExcepting the coast, the western half of the USA is desert and mountains. There are scattered cities (Denver, Salt Lake City, Phoenix/Tuscon, Las Vegas, Boise, El Paso, Spokane), but most of the territory is relatively undeveloped and sparsely populated. (This is a good thing in my opinion. Covering every bit of land with city is a miserable societal goal. So is strip mining all of the land for fossil fuels and minerals, or turning it all to pasture.) Here’s a map: https://johnstonarchitects.files.wordpress.com/2012/04/pop_lg.jpg https://johnstonarchitects.files.wordpress.com/2012/04/pop_l...
- jerf 10y agoEven saying something like "California has a lot of people" can mislead you if you look at a map of the state. I live in Michigan and fly into Silicon Valley about twice a year; when I depart Michigan the entire state I fly over shows signs of human population, as everything is at least a farm [1]. In Silicon Valley, most of those mountains you can see on the horizon have nothing (visible from a plane) on the other side of them. Even most of California is empty mountain. [1]: I have to qualify it with "the parts I fly over" because obviously I'm flying over the southern part of the state. Head north and you start getting vast tracks of wilderness, and the upper peninsula is effectively not populated. There's just a few beads of "civilization" tied together by some fairly long roads, which are themselves most of the rest of the "civilization", and then it's square mile after square mile of wilderness.
- hyperbovine 10y agoThe western US is incredibly sparsely populated compared to the east. Just look at one of those nighttime satellite shots: http://geology.com/articles/night-satellite/satellite-photo-united-states-at-night-lg.jpg http://geology.com/articles/night-satellite/satellite-photo-...
- ldp01 10y agoI haven't been to SF but it certainly sounds familiar. Perth circa 2011/2012 was quite the boom town. Of my friends who graduated in 2012/2013 and found jobs in O&G/Mining, most of them have since moved interstate/internationally and switched from resources to different industries or gone back to study after the boom receded. But for a while there engineering graduates were going straight into 120k salaries doing fly-in-fly-out work on mine sites.
- gcb0 10y agoThe article never tells what LNG is.
- PhantomGremlin 10y agoYou could always use Wiki. Take natural gas (mostly methane) out of the ground. Cool it until it turns into a liquid (aka LNG) and takes less than 2% of the volume of the gas. Put it into ships. Sail ships to countries like Japan. Turn liquid back into gas and use it for e.g. power generation.
- manicdee 10y agoEven better, put the LNG back on the boat, send it to Australia and make 110% profit!
- kwhitefoot 10y agoPlease, please, tell me you are joking!
- unexpected 10y agosomewhat. LNG is sold on the basis of long-term supply contract. It's quite possible that LNG exported from Western Australia could make its way back to Sydney, Melbourne, other places if there is no pipeline infrastructure in place. the LNG import facilities compete on price, and in this example, Chevron would sell it to the highest bidder. No one wants "stranded" gas, but it would be up to the Government of Australia to set up the pipeline to its major cities. I'm sure such a pipeline exists, but given the quantity of gas available, Australia may not be able to use it all.
- PhantomGremlin 10y agoSmart move by Chevron. Soon there will be some big LNG projects coming online in the USA. Two that are not just proposals but are in various stages of construction are: http://www.cheniere.com/terminals/sabine-pass/ http://www.cheniere.com/terminals/sabine-pass/ https://www.dom.com/covepoint https://www.dom.com/covepoint
- greglindahl 10y agoI take it that you read the article, because it had a graph showing US exports rising from nothing to a lot over 2016-2020?
- PhantomGremlin 10y agoGraphs are one thing, details about actual ongoing construction are something else. The North America graph in the article looks like a classic startup "hockey stick". And I've been at too many startups and seen too many hockey sticks to take them seriously. Details matter. The two projects I linked to were delayed by many years. So the fact that there is substantial construction at both sites is a big deal. The fact that Cheniere is actually exporting LNG right now is an even bigger deal.
- marcgcombi 10y agoSmart move because there is not economic incentive for most "green energy" projects. Apologies to my liberal friends, but until you go full-Marxist in the first world countries, market-cost will always win. Game on!
- kbenson 10y agoUntil we correctly account for negative externalities and stop giving certain incumbent energy industries a free ride (or worse, rebates), market cost won't reflect real cost, and economic incentives end up really being political incentives.
- marcgcombi 10y agoAren't the incentives in place to encourage exploration and improve supplies and supply stability? I suppose that you're correct, to some degree. However, in the end, the equation is pretty simple when (cost of production + profit) > (the cost of an equivalent product, already in the market) then people will engage in that particular commerce. It's no more complicated than that.
- kbenson 10y agoCost of production includes cost of locating and developing resources, so incentives that offset the cost of these allow for equivalent profit at a lower price. The real point though is that the negative externalities are not included in the cost of production, because we as a society do not attribute their cost to the company that causes them. The simplistic example is the company that pollutes the local water and the overall health of people in the community goes down. Even without major sicknesses and death, if it causes an average of an extra sick day per year for the local people, that's a major impact on the entire region[1]. But then what if we look at hard a little more removed? What if the river pollution affects other industries more directly? For example,if there's a ranch bordering the river, what if it makes the cattle sick, even just sicker than normal? What if it affects Salmon spawning downstream? These are all costs borne by others, so are not accounted for in the cost of the product the original company produces, but we all pay for it in litttle or big ways. What if it just affects a species negatively without an industry behind it? If it's causing the extinction of some fish or frog species, what is the cost of that? You could say it negatively affects even human being in some small way to cause an extinction, but I don't know how to quantify the cost. Originally we didn't account negative externalities because we didn't know it mattered. In the few cases where it was obvious we used the courts to deal with it. Now we're learning (or have learned) that things are interconnected much more than we believed, but we're stuck with a bunch of industries that are used to not paying for this, and a public that's used to the current costs of goods and services, and it's hard to change that. But hard to change doesn't mean it's economically sound. 1: http://ohvec.org/mountaintop-removal-articles/health/ http://ohvec.org/mountaintop-removal-articles/health/
- forgottenacc57 10y agoOne day we'll realize that these big companies have been looting our natural resources with the full collaboration of the government.
- oculusthrift 10y agothese companies are our government. dick cheney and rex tillerson.
- siculars 10y agoVirtually all major oil companies are directly related to their respective governments, publicly or privately.
- Altay- 10y agoReally? There are people like this on HN? You think these companies are spending billions to extract these resources them hording them in their vaults? No. They're help all of us buy the things we need, including the device you used to type your nonsense.
- jpatokal 10y agoAustralian here. In Norway, oil wealth on government land was turned into arguably the highest standard of living in the world. In Australia, it went mostly into the profits of companies headquartered overseas and the government negotiated with them so badly and/or corruptly that it's managing to run a budget deficit. Of course mining is essential to humankind and the companies that do it are not doing it out of the goodness of their hearts, and that's fine. But extractive industries are by definition not sustainable and they incur very real health, environmental and infrastructure costs that have to be paid by someone. Recommended reading: https://penguin.com.au/books/boom-the-underground-history-of-australia-from-gold-rush-to-gfc-9781742537849 https://penguin.com.au/books/boom-the-underground-history-of...
- caf 10y agoSomething has gone badly wrong in public policy in this area. Consider: That's seen our Petroleum Resources Rent Tax proceeds, which in the past delivered around $2 billion a year, plummet. In fact, by the time we overtake Qatar for global gas domination, it's anticipated our resources tax will collect just $800 million. Qatar, on the other hand, is expected to receive $26.6 billion in royalties that same year for roughly the same volume of exports. (from http://www.abc.net.au/news/2017-03-20/ian-verrender-how-the-free-market-failed-australia/8368032 http://www.abc.net.au/news/2017-03-20/ian-verrender-how-the-... )
- MrTonyD 10y agoHonestly, I never know what to believe when I read these articles. A good friend of mine was on the board of a major oil company - and he told me stories about the backroom deals involving huge investments. Huge projects were really pay-offs to one country which would in-turn take actions impacting another country and resulting in furthering the oil company's goals (which weren't always just direct profit. Politicians put in power - groups hurt or supported - payback for favors from years before - actions to influence major court decisions years in the future.) Oil companies act in completely opaque ways. At this point, I'm really just convinced that we need public involvement with all decisions by all powerful organizations - whether government or business. Nobody is on our side at these places.
- brianwawok 10y agoAnd you think the government is on your side? The same government in the US stripping the EPA of power?
- ZeroGravitas 10y agoThis headline seems inaccurate, it's just not expanding further it seems? The headline sounds like they're turning out the lights and going home. First paragraph: "Chevron Corp. has signaled the end of major new LNG projects in Western Australia and is unlikely to sanction an expansion of its Gorgon and Wheatstone export developments as it focuses on boosting returns from $88 billion of investment."
- dang 10y agoGood point. We've revised the title above.
- madengr 10y agoAt least they'll have a post apocalyptic industrial set for the next Mad Max movie. Just need some pigs to make the gas.