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Cheniere Energy Partners LP CQP +1.30% is moving ahead with the construction of facilities to liquefy and export natural gas in Louisiana, moving the U.S. one step closer to becoming a major exporter of the commodity.

The company said Thursday it had given engineering contractor Bechtel Oil, Gas and Chemicals Inc. the green light to start building two liquefaction trains at its Sabine Pass, La., import terminal. The first liquefaction train, which will turn natural gas stemming from booming U.S. shale fields into liquid that can be exported overseas, is expected to start operating as early as 2015, and the second train will start six to nine months later, the company said.

U.S. natural-gas producers became victims of their own success when they unleashed unexpectedly massive amounts of the commodity from shale formations, driving down domestic prices. A market glut for natural gas led prices for the commodity to decade-low levels earlier this year; exports could help ease that glut and give producers access to more profitable markets abroad.

The U.S. exports relatively small quantities of LNG to Japan out of Alaska, but the Sabine Pass facility would be the first terminal to do so out of the lower 48 states.

Cheniere, which originally built the Sabine Pass facility to import natural gas at a time when experts perceived there would be shortages of the commodity, began its effort to turn it into an export terminal about two years ago. The company has struck long-term agreements with four global buyers to supply over two billion cubic feet a day of natural gas for 20 years.

“It is a testament to the flexibility of the U.S. markets and institutions that a small company like ours was able to accomplish so much in a short time,” said Cheniere Chief Executive Charif Souki.

Cheniere expects the project to cost about $5.6 billion, funded by $2 billion of equity and $3.6 billion of debt. The effort is backed by private-equity firm Blackstone Group BX +1.46% .

“We are pleased to provide the growth capital to fund the construction of the first LNG export facility in the continental United States, creating thousands of jobs for American workers and providing significant benefits to the U.S. economy,” David Foley, senior managing director of Blackstone, said.

Cheniere is the only company that has received approval from the Obama administration to export LNG to countries lacking a free-trade agreement with the U.S.

Nearly 10 other proposals are pending before the Energy Department, but the agency says it won’t approve any additional projects until it finishes a comprehensive review of the exports’ impacts on the U.S. The Energy Department is expected to complete that review later this summer.

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I’ve written positively on Chimera Energy Corp (OTC:CHMR) in the past and a couple of recent announcements from the Company have pushed shares higher.

From a 1-Month perspective, CHMR was trading in the $0.51 range on July 10 and is trading today in the $1.88 range; a gain of 268% in a month.

Now this isn’t a hype- regular readers know that I don’t post super high percentage numbers to push a stock because I have no incentive and on occasion an OTC company does have enough good news in a small window to cause give it a big percentage gain. That’s the deal here… a legitimate product, improvements, and a first purchase order: I’m not making a recommendation here; just putting up some news that the stock might be worth your time to investigate: So don’t let that 268% scare you off.

CHMR has a unique, one-of-a-kind shale “Fracking” system that isn’t based on water. That’s significant difference because environment’s have long been concerned about the wastewater produced in fracking and its toxic effect and its disposal.

The good news from the company on the purchase order came on August 7 when CHMR said they had executed a purchase order with America West Drilling Supply regarding an integral component necessary for Non-Hydraulic Extraction that is known as a “casing perforator”.

In the process of extracting oil from shale, the well casing is first perforated to create new ducts for oil to flow. Chimera Energy Corp is purposely using a type of perforator that is pneumatically operated, excluding any technology for perforation that requires water, ballistics, blasting or any potentially toxic chemicals.

CHMR announced their new Non-Hydraulic Extraction process last week. The process is a revolutionary Shale Oil extraction technology designed to safely replace hydraulic fracturing without negative environmental impacts.

The new process uses no water and was originally developed for Shale Oil extraction in geographic areas that were far too cold to use water due to freezing. Non-Hydraulic Extraction has recently emerged to be asserted as a cheaper and more effective extraction method that does not affect groundwater at all.

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With nearly two dozen states looking to add natural gas-powered vehicles to their government fleets, it ultimately could push the public to follow suit in purchasing cars and trucks powered by cleaner, affordable and domestically produced fuel, Oklahoma Gov. Mary Fallin said Wednesday.

Fallin spoke to a group of automobile manufacturers and dealers, and purchasing officials from more than a dozen states, following a discussion about an effort involving 22 states to solicit bids for the purchase of natural gas-powered vehicles for state fleets.

“We’re serious. We’re ready to buy natural gas vehicles now,” Fallin said. “We all know that natural gas is a cleaner form of energy. It’s an abundant form of energy. It’s a less expensive and cheaper form of energy, one that will not only create American-made jobs, it will be good for our national security and economic security.”

Fallin and Colorado Gov. John Hickenlooper have led the effort to get auto manufacturers to produce more affordable vehicles that run on compressed natural gas. The initiative also is designed to promote the natural gas industry, and many of the states that have joined the effort — including Texas, Wyoming, West Virginia and Pennsylvania — are natural gas-producing states.

Fallin acknowledged that a vibrant natural gas industry “will help provide our states with money back into our local economies, money back into our state budgets, which will be beneficial for those governors who are participating in this.”

Twenty-two states have joined to issue a formal request for proposals, or RFP, being coordinated by Oklahoma state officials. Solicitation responses from auto manufacturers and dealers are due Sept. 7, and purchasing officials expect award a contract by Oct. 5.

The contract specifically details a potential purchase of as many as 60 compact sedans, 850 mid- to full-size sedans, 400 half-ton trucks and 480 three-quarter ton trucks, although it notes that the final number of vehicles purchased could fluctuate.

Wednesday’s meeting focused on an overview of the solicitation and details of the RFP, and state officials and vendors acknowledge there are still many details to be worked out.

“Anytime you have 22 states involved in something, you’re going to have 22 different opinions about how it needs to be done,” said Alan Rosner, fleet director for Sam Pack’s Five-Star Ford in Carrollton, Texas, who said he plans to participate in the bid process. “We’ll get it ironed out. It’s generic enough to work.

“The more product that we can put out there for choices, the better it is for everybody.”

Rosner noted only 12 of the 22 states allow out-of-state dealers to sell vehicles to the state.

Oklahoma’s Secretary of Energy Michael Ming acknowledged that a 22-state proposal is complicated and said Wednesday’s meeting was designed to help answer questions posed by manufacturers, dealers and state procurement officials.

“Now you’re going from a typical procurement of buying pencils or copiers to procuring something that doesn’t even exist in some cases or has never been procured before,” Ming said. “I think it would be unrealistic to expect a perfect RFP, so this is exactly the kind of conversation that we wanted.”

Ford Motor Co., Chrysler, and General Motors Co. all produce CNG-powered three-quarter ton pickup trucks, and Honda Motor Co. has produced a CNG-powered Civic since 1998. Now state officials are hoping their solicitation prompts manufacturers to consider producing even more CNG vehicles.

“We’ve got dealers in 37 states, over 200 dealers who can sell natural gas vehicles,” said Ryan Harty, a project manager for American Honda Motor Co., who said the sales of 2012 CNG models already have doubled last year’s sales figures.

“We see this as a great opportunity to show the capabilities of natural gas as a vehicle fuel to audiences that might not be aware of it, including the states.”

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Opening nearly all federal land to oil and gas drilling — including the Arctic National Wildlife Refuge — would bring modest revenues to the U.S. budget over the next decade, according to a new report by the nonpartisan Congressional Budget Office prepared at the behest of Republican lawmakers.

If opened to drilling, the refuge and parts of the Atlantic, Pacific and Florida coasts together would yield $7 billion over the next decade, the CBO said. That’s less than 5% of the $150 billion the federal budget already stands to get over that period from oil and gas leases on federal land already open to drilling.

The CBO report differs with long-standing assertions by the oil and gas industry and their political allies that opening land currently off-limits to development would channel considerable revenue to federal coffers and help reduce the national debt. Industry and its allies also say that removing drilling limits would free the United States from dependence on foreign oil.

House Budget Committee Chairman Paul D. Ryan (R-Wis.), who requested the report, did not immediately respond to a request for comment. Neither did Rep. Chris Van Hollen of Maryland, the panel’s ranking Democrat.

For its calculations, the CBO cited estimates of 8 billion barrels of oil within the Arctic Refuge. However, the Energy Information Administration — the research and analysis arm of the Energy Department — says the amount is more likely 1.9 billion to 4 billion barrels.

Using the higher estimate, the CBO found that opening the ecologically sensitive wildlife refuge to oil and gas production would yield $5 billion over the next 10 years — 50% to 90% of which would go to Alaska under current law.

Opening more of the American coastline to oil and gas development would yield an additional $2 billion over 10 years, to be divided between federal and state authorities, the CBO said.

“The federal government also would collect royalties if oil and natural gas eventually were produced from those lands, but most royalty payments would not be collected until much later because of the long lag between the initial leasing agreement and the time when production begins,” the CBO said. It estimated those revenues at perhaps $2 billion to $4 billion a year from 2023 to 2035, but called the numbers “quite uncertain.”

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The U.S. Energy Information Administration has updated energy statistics and an interactive map that highlights the role of the Gulf of Mexico in the U.S. energy picture.

As EIA reporetd, the Gulf of Mexico (GOM) area, both onshore and offshore, is one of the most important regions in the United States for energy resources and infrastructure.  In 2011, the Gulf of Mexico federal offshore region accounted for about 23% of total U.S. crude oil production and about 7% of total U.S. dry natural gas production.

The interactive energy infrastructure map contains information on power plants, storage terminals, pipelines, petroleum refineries, liquefied natural gas terminals, natural gas processing facilities, and electricity transmission lines in and around the Gulf of Mexico. Users may select the types of energy facilities to show or hide on the map.

EIA’s GOM Fact Sheet also includes updated statistics related to petroleum and other liquids supply, natural gas supply, refining capacity, natural gas plant capacity, and proved reserves.

Total domestic production of crude oil and natural gas increased in 2011, despite decreases in Gulf of Mexico federal offshore production of 15% for crude oil and approximately 19% for dry natural gas. Refineries along the Gulf coast comprised about 44% of total U.S. petroleum refining capacity, as of January 2012. Gulf coast natural gas processing plants accounted for 30% of total U.S. natural gas processing plant capacity, as of January 2012.

The updated GOM Fact Sheet can help analysts assess this region’s resources and infrastructure in light of potential tropical storm activity or other events. The Climate Prediction Center at the National Oceanic and Atmospheric Administration has forecasted near-normal tropical storm activity for the 2012 hurricane season, which for the Atlantic region runs from June 1 to November 30. As of August 7, 2012, NOAA has declared seven named storms or hurricanes in the Atlantic region: Alberto, Beryl, Chris, Debby, Ernesto, Florence, and Gilma.

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The Obama administration ignored the wishes of coastal leaders when assembling a plan for offshore drilling near their shores, says a group of Republican governors from Texas, Louisiana and other states.

In a letter to President Barack Obama late Wednesday and obtained exclusively by Hearst Newspapers, the pro-drilling governors say they are “concerned about the lack of communication from the federal government on critical matters that affect our coastal development.”

In particular, the group complains that the Interior Department did not consult properly with coastal states on its a plan for selling offshore oil and gas drilling leases from 2012-2017 before finalizing the plan in June.

The five-year offshore lease plan focuses on allowing oil and gas development in already-explored areas of the Gulf of Mexico and the Arctic, while ruling out lease sales in Atlantic waters, despite pressure from some Virginia officials eager for exploration off the commonwealth’s shores.

The administration’s program sets up 12 Gulf of Mexico lease sales as well as the possibility of three auctions for rights to drill in waters near Alaska.

The nine governors who wrote Obama on Wednesday under the umbrella of the year-old Outer Continental Shelf Governors Coalition described that drilling plan as anemic.

“The administration fails to expand adequate access to resource-abundant areas in the Arctic and fails to establish leasing in the Mid- and South-Atlantic,” the group said. And Arctic lease sales “may never occur,” the governors said, because the government is requiring further study of that area.

Under the administration’s targeted-leasing approach to Arctic and Alaskan waters, federal regulators will decide what acreage to put on the auction block in a bid to avoid harming wildlife and the indigenous communities that depend on whaling and fishing for food.

The governors also criticized the administration for closing the door to eventually allowing more than 12 auctions in the Gulf of Mexico, even though several sales were delayed after the 2010 oil spill. Gulf Coast states claim a share of federal royalty revenue for oil and gas produced near their shores.

Signers were Govs. Rick Perry of Texas, Sean Parnell of Alaska, Bobby Jindal of Louisiana, Phil Bryant of Mississippi, Robert Bentley of Alabama, Nikki Haley of South Carolina, and Robert McDonnell of Virginia.

Interior Department spokeswoman Kate Kelly rejected the governors’ complaint about poor consultation.

“In developing the five-year program, Interior conducted outreach and sought input from all 50 states, tribes and other stakeholders,” Kelly said. “Through multiple venues, including formal comment periods and public hearings, states provided feedback that helped inform the final plan.”

Tommy Beaudreau, the head of the Bureau of Ocean Energy Management that assembled the leasing program, told Congress in May that his agency conducted public hearings in Gulf Coast states, Washington, and across Alaska’s North Slope and considered more than 280,000 public comments in crafting the final sale schedule.

Federal officials first began seeking public input on the five-year program with a formal request for information in August 2008.

Beaudreau also has defended the administration’s targeted-leasing plan for Arctic and Alaskan waters as an approach that takes local communities’ needs — as well as other factors — into account.

The Outer Continental Shelf Lands Act, which governs oil and gas leasing in federal waters, requires the government to consult with coastal states and localities while developing leasing programs.

The coastal governors coalition said it still is waiting for a response to a letter it sent the White House in March asking for a dialogue about offshore development.

“For five months, this administration has ignored our outreach attempting to improve the state-federal dialogue,” said Perry spokeswoman Allison Castle.

Randall Luthi, the president of the National Ocean Industries Association, said the governors were “wise to point out the flaws” in the administration’s “deeply disappointing five-year plan.”

A government advisory committee comprising state and local government leaders, which for more than three decades counseled the Interior Department on offshore leasing, exploration and development, was disbanded in 2010.

The House of Representatives voted last month to reject the administration’s five-year drilling plan and replace it with a more aggressive leasing plan backed by GOP leaders, which would schedule 29 auctions over the next five years. A bipartisan coalition in the Senate also is advancing an expanded leasing plan.

But any move to toss out the Obama administration’s five-year offshore program would halt pending lease sales, including a Nov. 28 auction of drilling rights in the western Gulf of Mexico. It almost certainly would trigger a new round of environmental studies of any new sale schedule that could take more than a year to complete.

Coastal governors’ letter to Obama on 5-year OCS plan

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Quantum Fuel Systems Technologies Worldwide, Inc. (NASDAQ: QTWW), a global leader in alternative fuel systems and clean propulsion technologies for automotive applications, including natural gas, hybrid/electric and hydrogen systems, today announced that during the year-to-date period ending July 31, orders for its CNG fuel systems increased nearly four-fold compared to orders received during the same period in 2011. Quantum received orders from leading natural gas vehicle system integrators and system developers for supplying its industry-leading, ultra-lightweight carbon composite compressed natural gas (CNG) storage tanks for a variety of transportation applications ranging from Class 1 to Class 8 natural gas trucks.

“We are very pleased with the substantial growth in orders. The growing interest in Quantum’s high capacity ultra-light weight natural gas on-board fuel storage systems can be readily attributed to the leading-edge design, premium quality, and the increased range and payload capacity enabled by our storage systems,” said Quantum’s CEO Brian Olson. “We thank our customers for appreciating our products, which are backed by our team’s depth of knowledge and decades of experience in the industry.”

Natural gas vehicles equipped with Quantum’s light-weight storage systems help to lower ownership and operational costs, while truly benefiting from the historically low prices of this domestically produced, clean fuel. Natural gas-powered vehicles can be fueled for a third less cost than other vehicles, and emit less smog-forming nitrogen oxide and particulates. Quantum’s composite tanks are the lightest in the industry, requiring less structure for mounting support, thereby increasing payload and passenger capacity. In addition, Quantum’s tanks maximize on board storage capacity resulting in greater driving range. These advantages, in addition to ease of installation and service, distinguish Quantum’s carbon composite tanks from other competing metallic tanks.

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The nuclear renaissance is in danger of petering out before it has even begun, but not for the reasons most people once thought. Forget safety concerns, or the problem of where to store nuclear waste—the issue is simply cheap, abundant natural gas.

General Electric CEO Jeffrey Immelt caused a stir last month when he told the Financial Times that it’s “hard to justify nuclear” in light of low natural gas prices. Since GE sells all manner of power generation equipment, including components for nuclear plants, Immelt’s comments hold a lot of weight.

Cheap natural gas has become the fuel of choice with electric utilities, making building expensive new nuclear plants an increasingly tough sell. The United States is awash in natural gas largely thanks to horizontal drilling and hydraulic fracturing, or “fracking” technology, which allows drillers to extract gas from shale deposits once considered too difficult to reach. In 2008, gas prices were approaching $13 per million BTUs; prices have now dropped to around $3.

When gas prices were climbing, there were about 30 nuclear plant projects in various stages of planning in the United States. Now the Nuclear Energy Institute estimates that, at most, five plants will be built by 2020, and those will only be built thanks to favorable financing terms and the ability to pay for construction from consumers’ current utility bills. Two reactors now under construction in Georgia, for example, moved ahead with the aid of an $8.33 billion loan guarantee from the U.S. Department of Energy.

What happens after those planned projects is hard to predict. “The question is whether we’ll see any new nuclear,” says Revis James, the director of generation research and development at the Electric Power Research Institute. “The prospects are not good.”

Outside the United States, it’s a different story. Unconventional sources of natural gas also threaten the expansion of nuclear, although the potential impact is less clear-cut. Around the world, there are 70 plants now under construction, but shale gas also looms as a key factor in planning for the future. Prices for natural gas are already higher in Asia and Europe, and shale gas resources are not as fully developed as they are the United States.

Some countries are also blocking the development of new natural gas resources. France, for instance, which has a strong commitment to nuclear, has banned fracking in shale gas exploration because of concerns over the environmental impact.

Fast-growing China, meanwhile, needs all the energy sources available and is building nuclear power plants as fast as possible.

Even in United States, of course, super cheap natural gas will not last forever. With supply exceeding demand, some drillers are said to be losing money on natural gas, which could push prices back up. Prices will also be pushed upward by utilities, as they come to rely on more natural gas for power generation, says James.

Ali Azad, the chief business development officer at energy company Babcock & Wilcox, thinks the answer is making nuclear power smaller, cheaper, and faster. His is one of a handful of companies developing small modular reactors that can be built in three years, rather than 10 or more, for a fraction of the cost of gigawatt-size reactors. Although this technology is not yet commercially proven, the company has a customer in the Tennessee Valley Authority, which expects to have its first unit online in 2021 (see “A Preassembled Nuclear Reactor“).

“When we arrive, we will have a level cost of energy on the grid, which competes favorably with a brand-new combined-cycle natural gas plants when gas prices are between $6 to $8,” said Azad. He sees strong demand in power-hungry China and places such as Saudia Arabia, where power is needed for desalination.

Even if natural gas remains cheaper, utilities don’t want to find themselves with an overreliance on gas, which has been volatile on price in the past, so nuclear power will still contribute to the energy mix. “[Utilities] still continue [with nuclear] but with a lower level of enthusiasm—it’s a hedging strategy,” says Hans-Holger Rogner from the Planning and Economics Studies section of the International Atomic Energy Agency. “They don’t want to pull all their eggs in one basket because of the new kid on the block called shale gas.”

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