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Charif Souki, the president and CEO of Cheniere Energy, took a jab at himself Monday at the annual meeting of the Louisiana Oil and Gas Association in Lake Charles.

“There is nobody who’s been as wrong about a trend as I’ve been,” he told about 350 people attending the noon luncheon.

In the early to mid-2000s, he developed a plan to import liquefied natural gas at a terminal in Southwest Louisiana. Then the industry successfully accessed natural gas in shale plays across the nation, resulting in a natural gas boom.

Suddenly, the nation found itself with more natural gas than it needs and prices tumbled, making his import idea not such a good investment.

“You guys are too good” at finding and retrieving natural gas in places once inaccessible, he told industry representatives.

“The critical thing will be to find a place to put all this gas,” Souki said.

Instead of importing natural gas, Cheniere Energy now plans to export it through its Sabine Pass liquefaction facility. Souki hopes that in the next few weeks, the Federal Energy Regulatory Commission approves the last permit needed and construction can begin in April. The plant would employ 100 to 200 people, he said.

Cheniere Energy already has customers in the United Kingdom, Spain, India and Korea lined up to buy its liquefied natural gas.

Souki said he expects other companies to join Cheniere Energy in exporting natural gas, with another two or three LNG facilities likely in Louisiana alone.

“We are helping our allies and friends” around the globe and who will no longer have to rely on energy from Russia and other unfriendly nations, Souki said.

The natural gas glut also can boost recovery of the U.S. economy and reduce the nation’s energy dependence on Middle Eastern nations, he said.

“We have discovered fracking. Please don’t blow it now,” Souki said.

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Southwestern said in its fourth-quarter earnings report that it had completed its first well, the Roberson 18-19-1-15H, this month to a total depth of about 9369 feet with a 3600-foot horizontal in Columbia County, Arkansas.

“The lateral was landed in the lower third of this zone and subsequent core analysis indicated this section had some of the lowest permeability in the entire interval,” the company said.

The well, which has been producing from eight of 11 fracture stages, flowed 103 barrels of oil per day at its peak, as well as 200,000 cubic feet of gas per day and 1009 barrels of water per day.

The results did not elicit much excitement; analyst Mike Kelly of Global Hunter Securities called them “unimpressive”.

Investors were similarly unimpressed. Southwestern’s shares closed at $33.31, down 5.72%, in heavy trade on the NYSE on Tuesday after touching a low of $32.69 earlier in the day.

The underperformance did not come as a surprise to Marshall Carver, an analyst with CapitalOne Southcoast, in light of the well results. But he thinks “significant underperformance” could make for a “buying opportunity”, according to a research note.

Southwestern said it had indeed learned from the first well. The company sunk its second probe – the Garrett 7-23-5H-1 in Claiborne Parish, Louisiana – into the top of the interval and was drilled faster and “had better oil shows than the first well”. That well, drilled to a depth of about 10,863 feet with a 6536-foot lateral, was also spudded this month.

Southwestern also spudded a third well in the play this month, the BML-31-22-1-1H located in Union Parish, Louisiana. Analysts expect results from these wells in April.

Carver urged patience with the Brown Dense play, which has attracted intense interest from companies looking to increase their liquids production.

“Peak rate so far of 103 bpd will be viewed as disappointing,” Carver said of Southwestern’s results in a research note.

“Investors will need to be patient with this potential play; it will likely take several more wells before we have a good idea of what Brown Dense wells are capable of producing.”

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The Wall Street Journal and the Club for Growth have both come out today against a legislative proposal to subsidize the adoption of natural-gas-based transportation vehicles.

The legislation has been pushed by T. Boone Pickens who sings the gospel of energy independence by insisting that government should give natural gas a helping hand. Mr. Pickens argues that natural gas is cheap, abundant and local and that while the government has been giving out handouts and subsidies to oil and ethanol as well as to “clean” energy options like solar and wind, natural gas as a transportation fuel hasn’t gotten its due.

Largely because of Pickens’ campaign (he even has John Stewart convinced ) there is now a bill in Congress called the NAT GAS Act with some 180 cosponsors as well as a bipartisan Senate version.

The problem for critics isn’t natural gas vehicles per se, it is the fact that Republicans are supporting the notion that government should be picking winners and losers for the sake of “helping” a particular industry.

As the Journal argues: “The big transportation debate of the moment is whether the future belongs to natural gas vehicles, battery-operated cars or hybrids, or whether new sources of oil will keep gasoline, diesel and the internal-combustion engine paramount. Who knows?

“But we do know who doesn’t know: Congress. Best to let millions of investors and consumers—otherwise known as a market—decide these fates rather than blowing $5 billion, or $100 billion, and creating another industry that depends on political intervention for its survival. One reason the U.S. has trillion-dollar deficits is because too many Republicans too often forget that they were elected to end subsidies and earmarks, not to create new ones.”

The Journal editors are right but let’s be honest about the power of consumers to change the transportation market. We humbly submit that since other types of vehicles — hybrids, EVs — are getting subsidies and handouts from the government, the market is being distorted to a degree that pushes off the time when natural gas cars will come to market for consumers.

There is exactly one car company manufacturing exactly one compressed natural gas model vehicle in the United States. And though Honda announced early last year that it would be selling its Civic GX vehicle in all 50 states , we put in a call to our local Honda dealer near our residence in Western Pa. and were told that the car would not be available for purchase in the foreseeable future.

We also inquired recently if an Ohio firm that specializes in adapting cars and trucks from petroleum to compressed natural gas could work their magic on our family’s Volvo or Subaru and were told that the technology for such a transition was yet to be approved for most models. So thus far we have been thwarted in our efforts at becoming an early adopter of a CNG vehicle. And we reside in a heavy natural gas boom state so there actually is one compressed natural gas pump in our area where we could purchase fuel were we able to acquire a vehicle.

This is not to dispute the validity of the Journal’s or the Club for Growth’s opposition to the NAT GAS Act. But it worth recognizing that in the current system an unsubsidized, unfederally funded transportation technology is at a severe disadvantage, as are the consumers who see the same promise from a new technology as T. Boone Pickens.

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New government data show that in the year since deepwater drilling officially resumed in the Gulf of Mexico following the BP oil spill, there were slightly fewer new deep well permits issued than in the same yearlong period before the spill. The Obama administration angered Gulf Coast leaders and the oil industry by imposing a moratorium on deepwater drilling after the Deepwater Horizon rig exploded April 20, 2010, killing 11 men and soiling the Gulf of Mexico and its shores for months. Opponents said it was an overreaction to shut down the industry and then “slow-walk” permitting.

Feb. 28, 2011, was the date that the Interior Department approved the first permit for an oil company to drill a new well in more than 500 feet of water after it had implemented new safety rules.

In the year since then, there have been 61 permits to drill new wells in more than 500 feet of water issued by the Bureau of Ocean Energy Management, Regulation and Enforcement and its successor agency, the Bureau of Safety and Environmental Enforcement.

In the same one-year period from Feb. 28, 2009, to Feb. 27, 2010, the government issued 67 such permits.

New wells – as opposed to any number of drilling activities involving existing wells that also require permits - are a critical measure of drilling activity because they represent the largest investment by oil exploration companies and offer the greatest potential for finding new domestic sources of crude.

As recently as last week, Jack Gerard of the American Petroleum Institute complained that the Obama administration was still artificially slowing the permitting process. The president, meanwhile, has been responding to attacks on his energy policy amid skyrocketing gas prices and firing back at the slogan “Drill, baby, drill.”

Obama derided the Republicans plan for developing domestic energy sources during a speech last week in Florida: “Step one is drill, step two is drill and step three is keep drilling. You know that’s not a plan — especially since we’re already drilling. That’s a bumper sticker.”

While the numbers indicate the pace of permitting in deepwater is nearly back to what it was in the same period before the spill, industry experts have argued that permitting should have expanded by now, not remained flat, given the continued investment from oil companies. On the other hand, the government has stated that it was forced to hold up many permits because those applicants had not fully complied with new safety rules that were imposed as lessons were learned from the BP disaster.

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Environmental Protection Agency Administrator Lisa Jackson asked the House subcommittees on energy and power on Tuesday for $14 million in order to fund collaborative studies on hydraulic fracturing with other federal agencies.

She was outlining the EPA’s projected $8.344 billion budget for fiscal 2013, and made a point to emphasize the EPA’s ongoing efforts to study the effects of hydraulic fracturing.

“As I’ve mentioned before, natural gas is an important resource which is abundant in the United States, but we must make sure that the ways we extract it do not risk the safety of public water supplies. This budget continues EPA’s ongoing congressionally directed hydraulic fracturing study, which we have taken great steps to ensure is independent, peer reviewed and based on strong and scientifically defensible data,” Jackson told the Republican-led committee.

As part of EPA’s 2010 House Appropriation Conference Committee directive, Jackson said $14 million of the agency’s budget would go toward studies with the U.S. Geological Survey and the Department of Energy to “assess questions regarding hydraulic fracturing.”

The EPA is still conducting its study and hopes to have parts of the impact study published by 2012. Data gathered from other longer-lasting test cases won’t be added to the final report until 2014, the EPA said.

“Building on these ongoing efforts, this budget requests $14 million in total to work collaboratively with the United States Geological Survey, the Department of Energy and other partners to assess questions regarding hydraulic fracturing. Strong science means finding the answers to tough questions, and EPA’s request does that,” Jackson testified.

Her comments come as the EPA is increasingly scrutinized over its stance on the controversial drilling technique. In December the agency released a draft study that suggested hydraulic fracturing caused groundwater contamination in Pavillion, Wyo. Jackson, for her part, has been careful in how she has characterized the industry practice of extracting natural by blasting underground rock formations with water, sand and chemicals.

Speaking to an energy forum at Richard Stockton College in Galloway, N.J, last week, Jackson said she believed hydraulic fracturing could be done in a clean and safe way, a more favorable outlook from her previous statements in which she admitted there was no definitive link to hydraulic fracturing and groundwater contamination.

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U.S. drivers paid 13 cents more at the pump in the past week, the government said on Monday, reporting the biggest weekly spike in nearly a year at a time of raging debate about energy policy in a presidential election year.

U.S. gasoline prices have climbed nearly 20 cents in the past two weeks, up 33.8 cents from a year ago, the U.S. Energy Information Administration said in its weekly survey of service stations.

Republicans have blamed rising fuel prices on the Obama administration’s decisions to limit offshore oil drilling and delay approval of a big pipeline project from Canada. Democrats cited speculation and have urged the administration to tap strategic reserves, pressure producing nations to boost output, and hasten development of energy alternatives.

The last time gasoline prices rose more than 13 cents a gallon in one week was a 13.7 cent jump in early March 2011.

In California, gasoline prices jumped more than a quarter in the past week, pushing the average to $4.29 a gallon — up more than 45 cents in the state in the past two weeks. The region has dealt with the effects of the idling of the third-largest refinery on the West Coast.

The spike in gasoline prices comes as oil prices hit their highest level nearly 10 months last week on tensions with Iran. Oil prices, which account for as much as 80 percent of the cost of gasoline, settled at $108.56 a barrel on Monday.

Facing heat over rising fuel prices, President Barack Obama on Monday welcomed a move by TransCanada to begin building the southern portion of its Keystone XL pipeline, which would move a glut of oil in Cushing, Oklahoma to Gulf coast refineries.

Analysts say this latest turn in the Keystone saga won’t do much to rein in fuel prices which have been rising on tensions in the Mideast and not on a shortage in the United States. Analysts also say Obama’s announcement on Monday will not quiet critics angry at the White House for rejecting the northern portion of the Keystone pipeline that would transport Canadian oil sands crude to the United States.

TransCanada said Monday that it was also re-applying for a federal permit for the project’s northern leg.

Republicans have said the administration’s rejection of TransCanada’s Keystone XL pipeline shows that the administration is not fully committed to energy security.

Obama defended his administration’s energy policies last week, arguing that the United States cannot drill its way to low energy prices.

Saying there is no “silver bullet” for energy prices, Obama touted government efforts to support development of alternative fuels for transportation and the increase in U.S. oil production since he took office.

In 2011, U.S. oil production reached its highest level in eight years. Still, critics complain that Obama’s policies have led to declines in oil development on federal land, while most growth in oil output has come from private and state lands. (Reporting by Ayesha Rascoe; Editing by Bob Burgdorfer and David Gregorio)

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A Canadian company’s decision on Monday to proceed with part of a U.S. pipeline might end up muffling one of the Republicans’ loudest arguments in this election year: that President Barack Obama has pursued failed energy policies.

TransCanada Corp announced it intended to begin work on the southern leg of the $7 billion Keystone XL project, from Oklahoma to Texas, leaving for later another run at the more controversial, and complicated, northern segment.

For months, Republicans have hammered Obama for blocking the pipeline project out of concern for the environmentally sensitive areas south of the U.S.-Canada border. Republicans seeking re-election to Congress uniformly branded his decision as a job-killer that undermines energy independence.

While Obama must still face Republican wrath over rising gasoline prices, his opponents will now find it harder to press their attacks over Keystone, a project that garners wide support among American voters.

According to an early February poll by the Pew Research Center, 66 percent of those who had heard about the Keystone XL project thought it should be approved.

With gasoline prices rising significantly even before the heavy summer driving season has begun – average retail prices are now nearly $3.70 a gallon, up from $3.35 a year ago – Republicans tried to connect Keystone with pain at the pump.

For Republicans, Keystone was more than a pipeline project. It was their poster child for what was wrong with White House energy policy.

So the White House was swift to welcome TransCanada’s latest announcement. “We’ll make sure that any federal permitting that is involved … will be acted on very quickly” for the southern leg, Obama spokesman Jay Carney told reporters.

A senior Senate Democratic aide said that with a large portion of the pipeline moving toward federal approval, “Republicans have less and less ground” on which to attack Obama.

But Republicans continued on Monday to press for U.S. approval of the entire Canada-to-Texas oil pipeline.

“It is time for President Obama to stop putting politics ahead of struggling families and small businesses and approve the Keystone XL pipeline,” House of Representatives Speaker John Boehner, the top congressional Republican, said in a statement.

The White House said it had been advised by TransCanada in advance of Monday’s announcement, but gave no details of any discussions between the company and the administration.

BREAKING THE BOTTLENECK

TransCanada’s move also gave the White House a backdrop for talking about the growing “glut” of U.S.-produced oil that is getting backed up in Oklahoma, where the southern leg of Keystone XL will start. That highlights administration assertions that Obama has presided over a sharp uptick in domestic production, contrary to Republican attack ads.

The southern leg of the pipeline, which could be operational by late next year – if environmentalists fail to persuade federal, state and local governments to block it – could ease a bottleneck at Cushing, Oklahoma, and help speed it to Texas refineries on the shores of the Gulf of Mexico.

For Democratic Senator Claire McCaskill, who faces a tough re-election campaign in Missouri, which borders Oklahoma, TransCanada’s decision was “good news for American jobs, and a good step toward increasing energy production right here at home.”

A senior Republican aide on the Senate Energy Committee acknowledged that building the southern leg would “hopefully resolve the bottleneck at Cushing.”

With retail gasoline prices on a path to top $4 a gallon soon and possibly touch $5 if political tensions with oil-producing Iran get worse by midyear, voter frustration with Obama likely will rise – with or without Keystone being built.

“Delaying the Keystone XL pipeline is not the reason gasoline prices have been going up, and moving forward on a variant of Keystone will not bring them down,” said Michael Levi, an energy analyst with the Council on Foreign Relations. “When it comes to today’s gas prices, the Keystone fight is a sideshow,” he said.

As Democrats in Congress perked up over the TransCanada announcement, Republican Senator Lisa Murkowski went to the floor of the Senate to squash any celebration. She complained that in her home state, the Trans Alaska Pipeline was only “half full” with oil because Democrats had blocked new drilling in the environmentally sensitive Arctic National Wildlife Refuge as well as some offshore drilling projects.

Obama is countering that there are no easy answers to rising energy prices and that “drill baby drill,” a policy of expanded domestic oil exploration advocated by Republicans, will not end U.S. dependence on foreign oil.

But that “is a big communications challenge for him” at a time when the cost of filling the gas tank is rapidly escalating, said the senior Senate Democratic aide.

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Environmental Protection Agency Administrator Lisa Jackson sees “only an upside to hydraulic fracturing,” according to the New York Post. Jackson spoke at an energy conference in New Jersey last week to discuss fracking and to address environmental concerns over the controversial process of unearthing natural gas deposits from shale. The Post reports President Barack Obama also believes fracking will lead to job creation and does not mean America will have to choose between protecting our environment and bolstering the economy.

Here are some facts about the New Jersey energy conference and statements from federal EPA officials.

* Jackson said fracking is “perfectly capable of being clean” but requires technology innovators to make sure it’s done right, according to the Asbury Park Press. Jackson added “smart regulation” is needed.

* During a U.S. House Oversight Committee hearing last year, Jackson testified she was not aware of any water contamination case proved to have been caused by fracking. The Asbury Park Press reports EPA groundwater impact investigations are ongoing and a final report is expected by the end of the year.

* Business Week reports the EPA released 622 documents from the agency’s water contamination report in Pavillion, Wyo., during a Capitol Hill meeting in February. The findings included elevated benzene levels near fracking well sites. EPA officials cautioned against making a generalization about fracking and water contamination, stating the results were specific to the region in Wyoming studied.

* Multiple states are grappling with fracking and natural gas exploration legislation. The Huffington Post reports Pennsylvania Gov. Tom Corbett will likely sign a bill this week to strengthen safety standards, limit local governmental interference with drilling and for the gas industry to pay for new local and state programs. Pennsylvania is one of the largest shale producing states and one of the few that does not require a levy on natural gas activity.

* Environmental activists continue to work to enact fracking bans and feel empowered by the recent New York Supreme Court ruling upholding home rule statutes to prevent local drilling, according to the New York Post. New York is the only state with a “blanket” ban on fracking. Department of Environmental Conservation Commissioner Joe Martens is still reviewing the state’s review of statewide and municipal powers to prevent natural gas exploration.

* New fracking legislation was introduced in New Jersey last week that pits senate Democrats against the Republican governor. The Senate Environment and Energy Committee approved a fracking ban bill in early February, according to the Statehouse Bureau. Bill passage came months after Gov. Chris Christie vetoed a similar piece of legislation altering the existing ban in favor of a one-year drilling moratorium. Democratic bill sponsors Linda Greenstein and Robert Gordon believe large deposits of Utica shale might exist under Warren and Sussex counties.

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