DOE official: LNG exports could be limited by silt-clogged waterways, ports

Silt, which is increasingly filling US waterways and ports, potentially could limit US LNG exports if it is not dredged soon, a top US Department of Energy official warned.

Sedimentary deposits in Louisiana’s Calcasieu Ship Channel, “where many LNG exports would be moving,” could reach a point where tankers moving in different directions won’t be able to pass each other, said Melanie Kenderdine, who directs DOE’s Energy Policy and Systems Analysis Office.

“These, by and large, are federal responsibilities,” Kenderdine noted during a presentation on the Quadrennial Energy Review and energy security at the Center for Strategic and International Studies. “That makes funding projects difficult under sequestration and budget caps.”

The problem should be addressed because DOE has approved LNG projects totaling 9.9 bcfd of export capacity, Kenderdine said. “If all of that gets built, it would bring us close to Qatar, which is the world’s largest LNG exporter at 10-11 bcfd,” she said. “As we get into that range, much of that is going to be moving through ship channels like this.”

Kenderdine said Gulf of Mexico ports and waterways, where sediment accumulates more quickly than in other parts of the US, will have to compete with ports along the East and West Coasts, where maintenance also has been deferred, for project funding. “There’s a trust fund for maintaining ports, and Congress just passed increases in user fees,” she said. “We recommend looking at innovative funding mechanisms instead of increasing either of those. This is important not only to energy, which is my focus, but to commerce in general.”

The first QER, which DOE issued earlier this year, concentrated on energy transportation systems and challenges (OGJ Online, Apr. 22, 2015). Officials who prepared the review expected to deal with oil, gas, and electricity, along with rail, which has grown dramatically, Kenderdine said. Ports and waterways were somewhat of a surprise, she added.

New gas pipelines and rising shale gas production have helped narrow regional retail price differentials, except in New England and the US Northeast where end-users pay more, particularly during the winter heating season, Kenderdine said.

“We are attracting energy-intensive and gas-intensive industries back to this country,” she said. “There are a total of 405 new industrial gas-related chemicals, petroleum, and industrial projects being completed between 2015 and 2020. That represents an additional 4 bcfd of gas demand, and we think that’s easily achievable.”

Contact Nick Snow at [email protected].