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White House, EU Say They Support U.S. LNG Exports

The White House and the European Union (EU) issued a joint statement Wednesday saying they "welcome the prospect" of liquefied natural gas (LNG) exports from the United States and also support the reversal of natural gas flows to Ukraine.

The statement -- which outlines 33 areas for cooperation, with Ukraine listed second and energy ninth -- was issued after U.S. and EU officials met this week in Brussels for a summit.

The situation in Ukraine proves the need to reinforce energy security in Europe, and we are considering new collaborative efforts to achieve this goal," the statement said. "We welcome the prospect of U.S. LNG exports in the future since additional global supplies will benefit Europe and other strategic partners."

Only one project, Cheniere Energy Inc.'s Sabine Pass facility, has received final authorization from the U.S. Department of Energy (DOE) to export LNG to countries that do not have a trade agreement with the United States, but the agency has granted seven conditional non-FTA export approvals (see Daily GPI, Feb. 11; July 30, 2012), including the conditional authorization received by Cheniere. The latest approval was awarded to Jordan Cove Energy Project LP on Monday (see Daily GPI, March 24).

According to DOE, as of Monday there were 24 pending applications to export LNG from the United States.

The statement added that the U.S. and the EU were working to create a "competitive, transparent, secure and sustainable" international marketplace for energy.

"We agree on the importance of redoubling transatlantic efforts to support European energy security to further diversify energy sources and suppliers and to allow for reverse natural gas flows to Ukraine from its EU neighbors," the statement said.

Last week, Ukrainian and EU officials -- the latter through the European Commission -- signed a joint report to cooperate on energy issues through 2020, including plans to modernize Ukraine's gas pipeline system and to work on reverse flows (see Daily GPI, March 20). Reverse flows are proposed in Slovakia, Bulgaria and Croatia.

The U.S.-EU statement comes after lawmakers in Congress held three hearings this week to discuss energy issues, with the debate touching on Ukraine and U.S. LNG exports at several junctures. The Senate Committee on Energy and Natural Resources and the House Energy and Commerce Committee's Subcommittee on Energy and Power held separate hearings Tuesday, followed by the House Committee on Foreign Affairs on Wednesday (see Daily GPI, March 26; March 25).

Lawmakers are also considering a bill -- HR 6, also known as the Domestic Prosperity and Global Freedom Act -- which calls for granting immediate approval to all pending LNG export applications that had a notice published in the Federal Register (see Daily GPI, March 18).

Supporters and opponents of LNG exports from the United States weighed in on the new developments.

"At least on its face it sounds really good and promising," Center for Liquefied Natural Gas (CLNG) President Bill Cooper told NGI on Thursday. "It's good to see that the administration is very supportive of LNG exports out of the United States.

"What we need to see happening is for DOE to speed up the [approval] process. DOE has said, as recently as the Energy and Commerce Committee hearing on Tuesday, that's it's going to proceed on the pace that it has determined on a case-by-case basis, and the external things going on in the world are not going to cause them to look at it any differently as far as the process goes.

"But we'll see what happens. It will be interesting to see if the administration and DOE get on the same page here."

The American Petroleum Institute (API) welcomed DOE’s decision to approve the Jordan Cove application and said it hoped the Obama administration would approve more applications.

“The economic and strategic benefits of natural gas exports have sparked a bipartisan chorus for action,” API CEO Jack Gerard said last Monday. “We urge the administration to continue making U.S. exports a priority.”

But Dow Chemical Co. said it was “carefully reviewing” the DOE decision on Jordan Cove, and it said department officials were required by law “to articulate their criteria for considering the public interest” for LNG exports. Dow also said DOE is required to conduct a rulemaking study on the issue.

“Dow and other manufacturers have consistently advocated for a measured and balanced approach to permit approvals,” the company said Tuesday. “[The Jordan Cove] announcement brings the total amount of export licenses approved to non-FTA countries to more than 9.2 Bcf/d, a level which many researchers and economists conclude could drive natural gas price increases, greatly affect consumer costs, and have repercussions throughout the U.S. economy.”

Jim Fitterling, Dow executive vice president for feedstocks, performance plastics and supply chain, was more blunt in comments to an IHS petrochemical conference in Houston this week.

“Let’s not forget, Europe has the resources and the capability to provide for its own energy needs,” Fitterling said, as reported by the Houston Chronicle. “Just because they rejected nuclear energy and horizontal drilling and left themselves at the mercy of others shouldn’t create an obligation for us to bail them out.”

The American Chemistry Council (ACC) said it supported an “all of the above” national energy policy and did not have an official position on HR 6.

“Consistent with our free trade principles, we support export of American-made products, including LNG,” the ACC said. “We do not have a position on bills that would alter DOE’s permit review process for LNG exports.

“Government actions that create new or increased use of natural gas should be accompanied by a comprehensive policy that expands access to domestic resources onshore and offshore and develops infrastructure, such as pipelines, to transport supplies."

Cooper said he wasn't certain if President Obama had ever previously announced a position specifically on LNG exports from the United States.

"[Obama] has had the position that he wants to increase exports generally, and he has spoken favorably about natural gas production," Cooper said. "It seems like a logical link, though. If he supports exports generally and he supports the natural gas industry, it seems like a logical nexus to say that he would support LNG exports."

Cooper added that he thinks HR 6 stands a good chance at being passed by Congress.

"The Energy and Commerce Committee and the leadership seem generally supportive of the bill," Cooper said. "I know there's going to be an effort to gain bipartisan support, so I'm confident that that bill will move through the House. I would hope, based on the comments that we've seen [Wednesday], that [Obama] would sign the bill if it landed on his desk."

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