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The DOE Approves a Second LNG Export Project: A Sign of the Future?

by Daryl Kuo As the world’s largest producer of natural gas, the United States has the potential to also become the world’s leading exporter of liquefied natural gas (LNG).  The Department of Energy (DOE), however, continues to proceed extremely cautiously with respect to authorizing LNG exports, particularly to countries that have not signed free trade agreements (FTA) with the United States. To approve a project, the DOE must determine that it is not contrary to the public. While exports are presumed to be in the public interest, this presumption can be rebutted in comments filed by opponents to the proposed exports. The public interest test balances various factors, including (i) the impact of the liquefaction project on domestic natural gas demand, supplies, prices and resource base, (ii) the benefits of international trade, and (iii) the benefits to the domestic economy, national energy security and the global environment. The...

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New DOE Study Fuels Debate Over LNG Exports

by Bethany K. Hatef The U.S. Department of Energy (DOE) engaged the controversy over exporting liquefied natural gas (LNG) with its December 5 publication of Macroeconomic Impacts of LNG Exports from the United States. Prepared for DOE by NERA Economic Consulting, the report concludes the domestic economy will benefit from LNG exports and thereby paves the way for approval of LNG export applications pending DOE approval. But, given the lead times for building export terminals and that only four of the 15 pending applications are expected to be approved in 2013, significant exports are unlikely in the near term. To be considered, initial public comments on the report must be submitted to the Department by January 24, 2013, reply comments by February 25, 2013. The report evaluated economic impacts “under a wide range of different assumptions about levels of exports, global market conditions, and the cost of producing natural gas in the...

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LNG Exports Continue to Await DOE Approval

by Daryl Kuo The discovery and accessibility of vast domestic shale gas reserves in the United States has motivated states and industry alike to lobby heavily for the approval of liquefied natural gas (LNG) exports.  LNG exports to non-Free Trade Agreement (FTA) countries, including China and Japan, are of particular interest because estimates for exports to those countries are as high as 16 billion cubic feet per day, more than ten times greater than all U.S. LNG exports in 2011.  So far, the U.S. Department of Energy (DOE) has approved only one LNG export project to non-FTA countries, and that approval is being challenged. Meanwhile, more than a dozen applications sit in DOE’s queue pending the release of a critical study by the end of the year. The debate over exports to non-FTA countries is likely to become more intense in the coming months once that study is released and subjected to a public comment period prior to any...

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