The Department of Energy (DOE) has placed requests for future exports of liquefied natural gas (LNG) on hold until it can assess their impact on the domestic price of natural gas, Energy Secretary Steven Chu told a Senate panel Thursday.

“We are not going to do anything [on LNG export applications] until we make a determination what the impacts will be [on domestic gas prices],” he said during a hearing before the Senate Energy and Natural Resources Committee on DOE’s budget request for fiscal year 2013.

“Certainly our minds are not made up,” yet about LNG export applications he assured Sen. Ron Wyden (D-OR), who asked the secretary to “disabuse me of the theory that you’ve already made up your mind” on this issue.

“Whatever we decide it has to be in the best public interest,” Chu said. “There is a flip side to this that we also have to consider: that if [it] does create American jobs and if prices are kept moderate, that it does bring money into the United States. It helps [with the] balance of trade.”

Wyden cited a recent study by the DOE’s Energy Information Administration (EIA), which concluded that LNG exports could increase domestic gas prices by more than 50%, costing American industry and gas customers as much as $43 billion (see NGI, Jan. 30). DOE is still awaiting the results of a second study.

“Certainly we don’t want to see natural gas prices rise dramatically,” Chu responded. However, if not done right, Chu conceded that LNG exports “could have that effect.”

Rep. Edward Markey (D-MA) last week introduced two bills that would block the exportation of domestic natural gas, which Markey said would lead to higher prices in the United States.

The Keep American Natural Gas Here Act would require that any natural gas extracted from federal lands be resold on the domestic market, and would require any pipeline crossing federal lands to offer its natural gas for domestic sale only. The bill does not provide any exemption for gas exports to Canada or Mexico. The North America Natural Gas Security and Consumer Protection Act would forbid FERC from approving new natural gas export terminals until 2025. The second bill is co-sponsored by Rep. Rush Holt (D-NJ).

“Whether it’s through a pipeline or a shipping tanker, we shouldn’t allow our domestic natural gas to be siphoned off to Asia, Europe or other markets when it’s needed here in the United States,” Markey said. “The plan to export natural gas only helps the oil and gas companies who are already making billions, while only serving to hurt millions of American families and businesses that benefit from lower prices.”

The bills aren’t likely to receive much support in the House, where members of the Republican majority were critical of Markey’s recent attempt to require that natural gas from Alaska’s North slope stay in the United States (see NGI, Feb. 6).

The potential negative impacts of exporting liquefied natural gas (LNG) could be significant and far-reaching, according to a letter Markey sent to Chu last month (see NGI, Jan. 9).

So far “We [have] permitted one liquefied natural gas terminal [for export of LNG to non-free trade agreement (non-FTA) countries — Cheniere Energy’s Sabine Pass terminal (see NGI, May 30, 2011)],” Chu told the Senate panel. “We determined that that would have de minimis impact on the price of natural gas in the United States.”

Sabine Pass received a favorable environmental assessment for its project from the Federal Energy Regulatory Commission (FERC) in December (see NGI, Jan. 2). Overall, DOE has received applications to export 12.33 Bcf/d to FTA countries and 12.51 Bcf/d to non-FTA countries. A number of the applications for exports to FTA countries have been approved almost automatically because those are governed by treaty. However, since there are only a small number of FTA countries most without import facilities, it is the approval for exports to non-FTA countries that can make or break a project.

In 2011 U.S. gas consumption was approximately 65 Bcf/d, while gross withdrawals from U.S. wells totaled about 71 Bcf/d, according to EIA.

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