DOE approves Lake Charles LLC’s LNG exports to non-FTA countries
The US Department of Energy conditionally approved Lake Charles LLC’s application to export LNG to countries that do not have a free trade agreement with the US. The joint venture formed by Southern Union Co. and BG Group received DOE approval to export LNG from the Lake Charles, La., terminal on July 22, 2011, DOE said.
Lake Charles LLC became the third US LNG export terminal to receive approval to sell US LNG to non-FTA countries on Aug. 7. Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export as much as 2 bcfd for 20 years.
Southern Union subsidiaries Trunkline LNG Co. LLC, Trunkline LNG Export LLC, and Trunkline Gas Co. LLC have filed a request with the US Federal Energy Regulatory Commission to build and operate the Lake Charles project.
Its three LNG trains will be capable of exporting 15 million tonnes/year, or the equivalent of 2 bcfd, the companies said. They expect to begin initial exports in 2018, they added.
Before granting the conditional authorization, DOE said it considered the economic, energy security, and environmental impacts, as well as public comments for and against the application and nearly 200,000 comments related to the associated analysis of the cumulative impacts of increased LNG exports.
Federal law generally requires approval of natural gas exports to countries that have an FTA with the US, according to DOE. For countries that do not, the Natural Gas Act directs DOE to grant export authorizations unless it finds that the proposed exports will not be consistent with the public interest.
Mixed reactions
Responses ranged from approval to disapproval. US Sen. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member, welcomed the Lake Charles project’s non-FTA export approval, but noted that it was submitted in May 2011, and that DOE has more than 20 other non-FTA LNG export applications pending.
DOE approved the application a day after Murkowski warned in a white paper that US LNG exports could be limited if the country does not move faster on export applications to non-FTA countries (OGJ Online, Aug. 7, 2013).
Sen. Ronald L. Wyden (D-Ore.), the committee’s chairman, said he was pleased DOE is reviewing LNG export application case-by-case, but added: “With each new permit to send natural gas overseas, [DOE] has a higher bar to prove these exports are in the best interests of American consumers and employers.”
An official with America’s Natural Gas Alliance also applauded DOE’s action. “A range of experts have concluded that selling some of our nation's abundant supplies of natural gas overseas will improve the US trade balance and deliver jobs and economic benefits here at home,” said ANGA Chief Economist Erica Bowman. “It also will help the president achieve his goal of doubling all exports.”
Center for Liquefied Natural Gas Pres. Bill Cooper welcomed the Lake Charles project’s non-FTA export authorization, but noted there are more applications awaiting DOE action. “For 16 of the 19 pending applications, the comment periods have closed. Consequently, there should be no new information to consider,” he said.
‘Needs to be more nimble’
“At DOE’s current pace, these projects could be waiting several years before their applications are even considered,” observed Ross Eisenberg, the National Association of Manufacturers’ vice-president of energy resources policy. “DOE needs to be more nimble and work through these applications more quickly to give businesses greater certainty.”
But Paul N. Cicio, president of the Industrial Energy Consumers of America, said DOE continued to ignore many other consultants’ high domestic gas demand growth projections when it relied on a National Economic Research Associates’ forecast to justify approving the Lake Charles project’s LNG exports request to non-FTA countries.
“Literally, every major natural gas consulting company we know is projecting domestic demand that is 35-45% higher by 2020 than the NERA study,” he said. “This means that when the three approved LNG export terminals come on line, it will be at the same time as the booming domestic demand by the industrial and power sectors and pipeline exports to Mexico.”
The Sierra Club also questioned DOE’s decision. "Exporting LNG to foreign buyers will lock us into decades-long contracts, which in turn will lead to more drilling—and that means more [hydraulic fracturing], more air and water pollution, and more climate-fueled weather disasters like record fires, droughts, and superstorms like last year's Sandy,” said Deb Nardone, who directs the group’s Beyond Natural Gas Campaign.
She said the Sierra Club is closely monitoring the Lake Charles LNG export facility’s FERC proceedings and other permits and approvals it will require, “and will take action as necessary.”
Contact Nick Snow at [email protected].
Nick Snow
NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.
