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DOE to move forward on LNG export applications

June 14, 2013 at 2:17 PM   |   Comments

WASHINGTON, June 14 (UPI) -- U.S. Energy Secretary Ernest Moniz said he "absolutely" expects to have final decisions before the end of the year on some of the 16 pending applications to export natural gas to countries that don't have free-trade agreements with the United States.

"I am intending to move now expeditiously into evaluating license applications," Moniz said during his first appearance Thursday before the House Energy and Commerce Committee since taking office three weeks ago.

While the DOE is required to quickly approve applications to export LNG to countries that have free-trade agreements with the United States, it can deny or restrict proposed exports to non-FTA countries if they are deemed not to be in the interests of the United States.

On May 17, before Moniz took over as secretary, the DOE granted conditional approval to Freeport to export up to 1.4 billion cubic feet of LNG per day for 20 years from its facility on Quintana Island, Texas.

That was the first approval by DOE to export LNG to nations that lack a trade deal with the United States since 2011 when it approved Cheniere Energy's Sabine Pass terminal in southwest Louisiana.

Moniz stressed that the DOE will be methodical in evaluating the applications on a case-by-case basis, The Hill reported.

"The pitfalls of litigation are there, so we have to do it right," Moniz said. "I want to do it very systematic[ly and] transparent[ly]."

Christopher Smith, the acting assistant secretary for fossil energy at the DOE, during a meeting Thursday with the House Natural Gas Caucus, suggested that future export decisions will likely occur every two months, the Houston Chronicle reported.

But the issue of timing is critical for the United States to capitalize on rising overseas demand for LNG as Australia, Canada and other countries race to approve their own export facilities.

Pat Outtrim, Houston-based Cheniere's vice president of governmental and regulatory affairs told the Chronicle last month approval delays could jeopardize a "golden economic and strategic opportunity for the country" amid its natural gas boom.

The next application in line for evaluation is that of Dominion Resources Inc. of Richmond, Va., for a natural gas liquefaction plant on the Chesapeake Bay in Maryland, the Chronicle reported.

Dominion Resources already has contracts in hand with Japan's Sumitomo Corp. and India's GAIL Limited to use all of Cove Point's 4.6 million tons of planned annual output, the Richmond Times-Dispatch reported. Both Japan and India do not have free-trade agreements with the United States

"We're very optimistic about an approval," Mark McGettrick, Dominion Resources' executive vice president and chief financial officer, told the newspaper.

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