NGI Archives | NGI All News Access
DOE Evasive on When It Will Act on Non-FTA LNG Filings
Christopher A. Smith, the Obama administration’s point man on liquefied natural gas (LNG) exports, shed little light Monday at a national regulatory commissioners’ meeting on when the Department of Energy (DOE) will begin acting on pending applications for authorization to export natural gas to countries with which the United States does not have free trade agreements (FTA).
“I’d be able to state more definitively what [the] time line would be after the comment period is over and we know what we [have] received,” said Smith, acting assistant secretary at the DOE’s Office of Oil and Natural Natural, at the winter meeting of the National Association of Utility Regulatory Commissioners (NARUC) in Washington, DC.
Asked if the department would be acting on the applications by the end of the year, Smith said, “our job is to make sure that we make good, prudent public interest determinations based on the evidence before us.”
So far the department has received 30,000 comments with respect to the export of LNG to non-FTA nations that are pending at DOE, and the comment process is ongoing, according to Smith.
The issues raised in the public comments “are all issues that we will consider in making a public determination” on whether exports to non-FTA nations are in the interest of the U.S., Smith said.
In late January comments were due on the DOE-commissioned NERA Economic Consulting study, which found the U.S. would gain “net economic benefits” from allowing LNG exports (see Daily GPI, Dec. 6, 2012, Jan. 28). The report has created divisiveness within the gas industry and Washington. Producers have lined up on one side and large consumers on the other in the political countdown to an Obama administration decision on whether to allow unrestricted exports of LNG to the world market.
Smith noted that DOE plans to act on non-FTA LNG export applications on a “first-come-first-serve basis,” and added that “priority [will be given] to those that have already pre-filed” with the Federal Energy Regulatory Commission (FERC). There currently are 11 applications before FERC to site export facilities, most of which are in the pre-filing stage.
Only one project, Cheniere Energy Inc.’s Sabine Pass LNG export facility has received both DOE authorization to export to the world market and FERC approval of its terminal facilities (see Daily GPI, July 30, 2012).
Diane Leopold, senior vice president at Dominion Transmission, was not optimistic about the outlook for U.S. LNG export projects. “It is likely that many, if not most, of the proposed export projects will not be built. That is typical for these kinds of projects” because of financing and other issues. “U.S. projects are already at a disadvantage because costs to liquefy and transport natural gas from here will be higher than for some other countries,” she said.
“The time to move forward [on LNG exports] is now. Any additional delay…puts our nation at risk for missing out on important economic and national security [benefits],” Leopold said.
“We are not opposed to actual exports, but we are concerned about exports happening too quickly, creating a shock to the U.S. market in prices. It needs to be done in a very deliberative, very, very careful way,” cautioned Paul Cicio, president of the Industrial Energy Consumers of America. He contends that the NERA Economic report is flawed, and should give policymakers “pause” for concern.
According to Cicio, the NERA study calculated that the net benefit to the U.S. in 2015 would be $10 billion in a $14 trillion economy, followed by a net benefit of $20 billion in 2020, which is “trivial…hardly economic growth.”
Â©Copyright 2013Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2023 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |