TPT March 2018

G LOBA L MARKE T P L AC E

This is seen as a huge boost to Asia’s emerging spot market as Chinese buyers rely much more on short-term purchases to meet their needs than their Japanese and South Korean counterparts. Import-dependent Japan and South Korea will have taken around 83.5 million tons and just over 37 million tons, respectively, by the New Year. China’s soaring LNG import demand was prompted by a huge government gasification programme that last year saw millions of households switch from using coal to natural gas for heating. Reuters noted that the world’s biggest LNG producers are Qatar, Australia and Malaysia, which together meet around 60 per cent of global demand. US exports are also surging as a result of the shale oil and gas production boom in North America. The drone ecosystem For the budding commercial drone industry in the US to reach its potential, hobbyist drones must be taken into account “Since the Federal Aviation Administration (FAA) for the first time broadly authorised commercial drone operation in the US in 2016, commercial drone use is expanding exponentially. With the right rules in place, the marketplace is positioned to blossom.” Lisa Ellman, an opinion contributor to The Hill , a Washington- based news site which covers Congress, is also co-executive director of the Commercial Drone Alliance, which advocates for the adoption of drone technology. She went on to cite a recent PricewaterhouseCoopers report that estimated the global market value of drones at over $127bn. Clearly the potential is there for creating jobs, boosting the economy, and delivering substantial benefits to the American people. But Ms Ellman warned that, to integrate the airspace for safety and security, it is critical that all vehicles navigating “highways in the sky” participate in the wider drone ecosystem. She wrote, “Policy and regulations defining the rules of the road, combined with technology able to assign drones a ‘license plate’, are a necessary step” toward expanding commercial drone operations. The FAAmet in May 2017 to establish some of these rules, but a report on its work recommended exempting model aircraft (so-called hobbyist drones) from the remote ID and tracking requirement. Ms Ellman considers this a mistake. (“For the Commercial Drone Industry to Take Off, Hobby Drones Need IDs, Too,” 19 December) By FAA’s estimate, some 1.1 million hobbyist drones were flown in the US in 2016, and the commercial drone market remains a fraction of the hobbyist drone industry. Citing the many reports of near-misses between drones and manned aircraft, or of drones flying where they should not be, Ms Ellman noted that “the worry is careless, clueless or criminal use of drones.” She argues that, since many of the careless

and gas drilling, said some provisions in these rules laid “potentially unduly burdensome requirements” on oil and gas operators “without significantly increasing safety of the workers or protection of the environment.” The administration is committed to encouraging production. As noted in the Pittsburgh Post-Gazette , fracking has been so successful in boosting production over the past decade that it has become almost synonymous with oil and gas drilling. In many areas of the US oil patch, it is rare for an oil or gas well not to be fracked. (“Administration Rescinds Rules For Oil, Gas Drilling Practices,” 29 December) Reaction to the fracking news divided along predictably anti- thetical lines. Because the process consumes several million gallons of water each time it is employed, environmentalists say the potential risks to groundwater require regulation. But the prospective changes drew praise from industry groups including the Washington DC-based Independent Petroleum Association of America and Denver-based Western Energy Alliance, which had sued successfully to block the rules generated during Mr Obama’s time in office. Western Energy Alliance president Kathleen Sgamma said in a release, “States have an exemplary safety record regulating fracking, and [that] environmental protection will continue as before.” › The Interior Department said that elimination of the fracking rules would save “up to $9,690 per well or approximately $14mn to $34mn per year” in industry compliance costs. Elsewhere in oil and gas . . . › The energy infrastructure company Kinder Morgan and a unit of Targa Resources (both Texas-based) and DCP Midstream Partners (Colorado) are moving ahead on their plan for a $1.7bn gas pipeline in the Permian Basin in the western part of Texas and the southeastern part of New Mexico. The intention is to relieve bottlenecks in the basin and reduce natural gas flaring that has increased greenhouse gas emissions. As reported by Tsvetana Paraskova on Oilprice.com (21 December), the Gulf Coast Express (GCX) project is designed to transport up to 1.92 billion cubic feet per day (Bcf/d) of natural gas. The mainline portion consists of approximately 82 miles of 36" pipeline and 365 miles of 42" pipeline. Service is projected to commence in October 2019. The partners said that some 85 per cent of GCX capacity is committed under long-term, binding agreements, and that they expect the remaining throughput to be subscribed early this year. › China overtook South Korea to become the world’s second-biggest importer of liquefied natural gas (LNG) in 2017, after Japan. Data from Thomson Reuters Eikon, reported on 30 December in Hellenic Shipping News , showed that China’s imports of LNG will have risen by more than 50 per cent last year compared with 2016, to around 38 million tons. And analysts expect China’s LNG imports to rise further.

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MARCH 2018