Energy Department using broad criteria to judge LNG exports

The Energy Department is sifting through some 200,000 public comments as it prepares to issue verdicts on energy companies’ applications to broadly export natural gas, a top Obama administration official said Thursday.

“We are moving through the process as expeditiously as possible,” said Christopher Smith, the acting assistant secretary for fossil energy. “We want to make sure that the decision that we make is consistent with our interest in making a good policy decision and our goal is to get to that that process as quickly as reasonable and still make sure we’re open and transparent with all the stakeholders we have to deal with.”

More than a dozen companies have asked the Energy Department for licenses to export natural gas to Japan and other countries that do not have free-trade agreements with the United States. Although Houston-based Cheniere Energy won export approval last year, the Energy Department has put other applications on hold while it considers the economic effects of the decisions.

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The crush of comments came on a study completed last year for the Energy Department that concluded even if the government doesn’t limit natural gas exports, there will be a net economic benefit for the United States. Some manufacturers, led by Dow Chemical Co., dispute that conclusion, saying unfettered exports could boost the price of natural gas and chip away at the competitive advantage for U.S. companies that rely on the fossil fuel.

Smith stressed the Energy Department’s deliberative approach to analyzing public comments and a number of factors as it weighs export license applications.

“We’re looking at balance to trade, we’re looking at job creation, we’re looking at energy security, we’re looking at environmental issues, we’re looking at prices (and) we’re looking at impact on businesses that are heavy uses of energy from natural gas,” Smith said at the Offshore Technology Conference. “So we have to consider all those things.”

Pressure is heightened because the Energy Department’s decisions face almost inevitable legal challenges — and the massive facilities for liquefying natural gas are multi-year, multi-billion dollar projects. While some applications focus on converting existing LNG import terminals into liquefaction and export facilities, other companies propose to build entirely new operations.

“These are investments that are billions of dollars of that will be placed in the United States for decades,” Smith noted, “so we want to make sure right now that we take the time to make the good, prudent decisions.”

Noting the attention on the issue, Smith stressed that the final decisions must “withstand the legal scrutiny we’re certain to see.”