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Obama Official Hints More LNG Exports Will Be Permitted

An Obama administration official said the export of liquefied natural gas (LNG) to other nations "makes sense" and strongly hinted that additional export permits would eventually be issued by the Department of Energy (DOE).

Heather Zichal, deputy assistant to the president for energy and climate change, told attendees at the American Gas Association's Natural Gas Roundtable on Thursday that the administration was also keen on seeing hydraulic fracturing (fracking) embraced by the public as a safe technology.

Last April DOE approved the first application for LNG exports to countries that are not parties to a free trade agreement (FTA) with the United States (see Daily GPI, April 18). DOE has since put the non-FTA permitting process on hold while it assesses the impact of LNG exports on domestic gas markets.

Zichal said the impact study would be completed this summer "and will pave the way for future decisions [on LNG exports] from the administration. I think some amount of LNG exports certainly makes sense from our perspective, and I think you will see policies to follow that."

Zichal later clarified that she didn't know which of the six to eight LNG export applications pending before DOE would be approved, but believes some of them will be granted.

"I can't prejudge what the [DOE] is going to find that they can say 'yes' and 'no' to," Zichal said. "I can only suspect that some of them would be approved. As a general rule of principle, the administration is not opposed to LNG exports. We believe that there is an important role that LNG exports can play in terms of domestic job creation and what we can achieve globally for energy security and environmental benefits."

DOE and the Federal Energy Regulatory Commission have given the nod to Cheniere Energy Inc. units Sabine Pass LNG and Sabine Pass Liquefaction to export LNG produced in the Lower 48 to non-FTA countries from Sabine Pass' existing LNG import terminal in Cameron Parish, LA.

Zichal said that when she meets with environmental and public health groups, they raise concerns about fracking.

"They raise very legitimate concerns about protecting underground water resources, reducing air pollution and minimizing surface impacts like truck traffic and road damage," Zichal said. "Those are all important and necessary issues to consider. We all realize that hydraulic fracturing is not a zero-risk proposition if it's not done right. At the same time, we know that it can be done safely and responsibly.

"There are many companies that are leading into this challenge in promoting best practices for safer and more efficient production. That's not always widely noticed or appreciated, but it's a fact. With the new technology and know-how that we have, the only thing that could undermine our ability to take advantage of our natural gas resources would be a failure to demonstrate to the public that we can do it safely. We need to work harder to make that case. And as we go about doing that we should be able to set aside the battles of the past and work together in a concerted way."

Zichal -- who served as energy policy director for President Obama during his first presidential campaign and previously advised John Kerry on energy issues during his 2004 campaign -- said she is also routinely asked about the Obama administration's focus during the re-election bid.

"There is some speculation about whether the administration is truly committed to an 'all of the above' energy approach and whether we are going to continue focusing on oil and gas development and working with the industry in a collaborative way in the future," Zichal said. "To all of those questions, the resounding answer is 'yes.' Whether it's for the next four months or the next four years, the president truly understands the opportunity we have with natural gas to create new jobs for Americans, reduce pollution and power our economy for years to come."

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