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Think tank questions U.S. LNG policies

Aug. 21, 2013 at 9:06 AM

WASHINGTON, Aug. 21 (UPI) -- The public interest qualifier for liquefied natural gas exports to countries without a free trade agreement with United States is too vague, a think tank said.

U.N. Energy Secretary Ernest Moniz expressed support for LNG when he took office in May. The Energy Department has dozens of applications for LNG exports on its books. It can deny permits for non-FTA countries if they're deemed not in the public's interest.

Charles Ebinger and Govinda Avasarala, researchers with the Energy Security Initiative at the Brookings Institution, said that qualifier is too vague.

They argue the U.S. government needs to reform its rules and provide more clarity to reduce uncertainty and risks to both producers and consumers.

Supporters of LNG exports said it would increase U.S. economy leverage and provide a source of revenue. Detractors said it will lead to higher natural gas prices at home and potentially lead to more hydraulic fracturing, a drilling practice viewed in some circles as an environmental threat.

The Brookings researchers said the public interest determination needs an overhaul. Furthermore, they said there were concerned by the department's decision to assess the cumulative impact on gas prices with more LNG approvals.

"Given the dynamics of the gas market and its competitive importance with other fuels, we do not believe these assessments would be made on a timely basis," they wrote in a six-page report published Tuesday.

The Department of Energy's public interest determination applies only to non-FTA countries.

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