Oil patch lawmakers implore DOE to fast-track LNG exports

Nearly four dozen Republican and Democratic lawmakers from oil patch states today implored the Obama administration to swiftly approve plans to export liquefied natural gas.

The bipartisan push comes as a glut of domestic natural gas keeps prices low and has sent energy companies scrambling to find new markets for the fossil fuel.

In a letter to Energy Secretary Steven Chu, the oil-patch lawmakers said exports are necessary to continue fostering development in Texas, Louisiana and other states that have long shipped gas via pipelines to other parts of the country that historically weren’t producing the fossil fuel themselves. A boom in extracting natural gas from dense shale rock formations nationwide means that those areas historically served by pipelines and far-flung resources now can get the fuel much closer to home.

“Large portions of the country which were previously served by our region via pipeline now have a closer commodity at hand,” said the 44 lawmakers, led by Rep. Gene Green, D-Houston, and Rep. James Lankford, R-Okla. “As such, without the ability to market to international customers, this could have a severe impact on production in our states.”

“Our region and our country need an outlet for natural gas production,” the lawmakers added.

Letter signers included 10 Democrats and 34 Republicans from Texas, Louisiana, Arkansas and Oklahoma. The Texans included Democrats Gene Green, Al Green and Sheila Jackson Lee, as well as Republicans Joe Barton, Kevin Brady, John Carter, John Culberson, Blake Farenthold, Bill Flores, Kay Granger, Ralph Hall, Pete Sessions and Pete Olson.

In July, a separate coalition of lawmakers from shale gas producing states in the Northeast urged Chu to speed up approvals of proposed LNG export facilities.

In today’s letter, the lawmakers suggested the Energy Department is moving too slow to vet applications from at least seven companies to begin exporting liquefied natural gas, including a proposal from Texas’ Freeport LNG Development.

Federal regulators recently approved Houston-based Cheniere Energy’s plans to begin exporting LNG from its Sabine Pass terminal in southwest Louisiana, but the Energy Department has postponed verdicts on similar proposals until it gets the results of a study evaluating how selling more American-harvested natural gas overseas would affect prices for U.S. consumers. The study is expected out this summer.

“The process does not seem to have a set timeline for decisions or a sense of urgency,” the lawmakers told Chu. “In our collective view, it is time to bring a renewed sense of urgency to the approval process.”

The issue causes heartburn for the Obama administration, which is struggling to decide whether — and how much — the U.S. should share its new natural gas bounty with foreign countries. The United States already sells a relatively small amount of natural gas to Mexico, Canada, Brazil and other countries, but pending proposals could put the U.S. on track to export about 16 billion cubic feet daily.

“As part of the department’s statutory responsibility to determine whether natural gas exports are in the public interest, the Energy Department is assessing the economic impacts of increased natural gas exports,” said spokeswoman Jen Stutsman. “This includes a two-part study analyzing the macroeconomic impacts of proposed U.S. LNG exports on the U.S. economy. When completed, the study will help inform the department in its review of the pending applications.”

White House energy and climate change adviser Heather Zichal has stressed that a major concern is ensuring that if natural gas is exported, it won’t send prices too high inside U.S. borders — hurting American consumers and manufacturers who use the fossil fuel as a building block to make other products.

In today’s letter, the oil-patch lawmakers insist that if U.S. regulators drag their feet, American producers could lose out to foreign competitors, including those in Canada and Australia where governments are “aggressively” supporting LNG export plans.

Most of the companies pursuing export licenses want to convert existing terminals for receiving natural gas imports that were built before today’s drilling boom.

The liquefaction process involves cooling natural gas to 256 degrees below zero, transforming it into a liquid that can be transported by tanker ships. The liquefied natural gas can be converted into a gas form at its destination.

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