Two Republican senators have introduced a bill that would codify a rule proposed last month by the Department of Energy (DOE) to expedite approval of small-scale liquefied natural gas (LNG) exports, primarily to countries in the Caribbean, Central America and South America.
U.S. Sens. Bill Cassidy (R-LA) and Marco Rubio (R-FL) introduced the Small Scale LNG Access Act on Wednesday. The bill calls for DOE to expedite any application to export up to 51.1 Bcf of natural gas per year, or 140 MMcf/d.
Specifically, the bill calls for amending Section 3(c) of the Natural Gas Act by inserting language that small-scale LNG exports are “deemed to be consistent with the public interest, and granted without modification or delay.” The change would not be applicable to countries subject to U.S. sanctions.
“Expedited approval of small-scale natural gas exports would strengthen an emerging sector of Florida’s economy,” Rubio said Wednesday. “In addition to the economic advantages for Florida, this measure would bolster our existing ties with Caribbean and Latin American nations while ensuring that bad actors in the region, including Cuba and Venezuela, do not reap its benefits.”
Cassidy added that the bill “promotes the growth of American natural gas, creating well-paying jobs with good benefits for hardworking families in Louisiana. The faster approval of small-scale natural gas shipments will create American jobs, improve Caribbean energy security and lower greenhouse gas emissions.”
In early September, DOE published a proposed rule calling for revising its process for authorizing LNG exports to countries that do not have a free trade agreement (FTA) with the United States. The rule called for DOE to issue an export authorization for any complete application that proposes exports of up to 140 MMcf/d, and which do not require an environmental impact statement under the National Environmental Policy Act.
A spokesman from Cassidy’s office told NGI on Thursday that the bill introduced by Cassidy and Rubio does not discriminate between FTA and non-FTA countries. Last Monday was the deadline for public comments on DOE’s proposed rule affecting non-FTA countries.
Cassidy and two other Republican colleagues in the Senate — John Barrasso of Wyoming and Lisa Murkowski of Alaska — sent DOE Secretary Rick Perry a letter to show support for the proposed rule on Oct. 5.
“The current permitting process for LNG export facilities is expensive, and small-scale projects often are not cost effective under current conditions,” Barrasso, Cassidy and Murkowski wrote. “Reducing the time and investment required for small-scale exports will benefit U.S. production, manufacturing and construction jobs, while also reducing trade deficits with the importing country.”
The senators noted that Jamaica generated more than 90% of its electricity in 2014 from fuel oil, and that no electricity was generated by natural gas. “If this rule is implemented, cheap U.S. LNG could offer countries like Jamaica a cleaner fuel source with which to generate electricity,” they said.
Last March, the Center for Liquefied Natural Gas appealed to Perry and lawmakers in Congress to expedite the LNG approval process to both FTA and non-FTA countries. The next month, DOE approved an authorization for Golden Pass Products LLC to export up to 2.21 Bcf/d of LNG to non-FTA countries. In June, Delfin LNG LLC was given authorization to export 1.8 Bcf/d to non-FTA countries from a proposed offshore Louisiana floating LNG terminal in the Gulf of Mexico.
In August, the Federal Energy Regulatory Commission approved a Bermuda-based partnership’s plans to slightly expand an LNG import terminal in Puerto Rico.
But manufacturers worry that an increase in LNG exports will drive up domestic natural gas prices. Last April, the Industrial Energy Consumers of America (IECA) sent a letter to Perry urging him to enact a moratorium on exports. Two months later, IECA renewed its call for a moratorium on LNG exports to non-FTA countries in a series of recommendations to Perry and Commerce Secretary Wilbur Ross.
At the time of Golden Pass’s approval, DOE had authorized 19.2 Bcf/d of LNG exports to non-FTA countries. Last month, DOE reported that as of Sept. 27 it had received applications to export a combined total of 51.59 Bcf/d to non-FTA countries, plus an additional 54.98 Bcf/d to FTA countries — with exports for both originating from the Lower 48. But it is doubtful that much LNG would ever be exported, since many of the proposed export facilities won’t be built.
DOE reported that between February 2016 and August 2017, a total of 593.5 Bcf of domestically-produced LNG had been delivered to 26 countries. The figure includes 308.1 Bcf (51.9% of total) to 21 non-FTA countries, with the remaining 285.4 Bcf (48.1%) going to five FTA countries.
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