Senators tell feds: Hurry up on LNG exports

Nearly three dozen senators on Wednesday urged the Obama administration to move quickly and make simultaneous decisions on a host of proposals to broadly export liquefied natural gas harvested in the United States.

The push unites 23 Republicans — including Texans John Cornyn and Ted Cruz — as well as 11 Democrats who represent gas-producing states eager to find a new market for the bounty.

“The world is hungry for U.S. natural gas,” the group said in a letter Wednesday to Energy Secretary Ernest Moniz. But, the senators warned, “the timeline for considering these applications may jeopardize our ability to retain a competitive position against other natural gas exporting nations who are also working diligently to export LNG.”

So far, the Energy Department has reached a decision on just two applications to export natural gas to countries that do not have free-trade agreements with the United States: Cheniere Energy and Freeport LNG. But 15 other applications are waiting in line, with proposals to export as much as 29 billion cubic feet of natural gas to non-free-trade partners.

The Energy Department took a nearly two-year timeout to study the economics of the issue after giving conditional export approval to Houston-based Cheniere in May 2011. After approving Freeport’s export license in May, Energy Department officials have signaled that it could take about two months to review each of the remaining applications, with decisions trickling out roughly every six to 10 weeks.

But for gas producers, companies proposing liquefaction facilities and their congressional allies, that is too long to wait.

“There is a global race for market share underway,” the senators told Moniz in their letter. “American competitors have been at a disadvantage for the past year and a half because the Department of Energy has delayed action on pending applications.”

The senators suggested that the Energy Department abandon its case-by-case review of each application and instead make decisions on a bulk of applications at once.

“Will you consider increasing the speed at which you make decisions on these applications?” the group asked. “Will you also consider evaluating multiple permit applications during the next rounds of consideration?”

An Energy Department spokesman could not immediately be reached for reaction.

Obama administration officials have already rejected another proposal advanced by the senators: that the Energy Department do a better job of prioritizing the projects “that have clearly established they are commercially viable.”

LNG debate: Critics challenge Obama administration’s plan for natural gas exports

The Energy Department already took a stab at that. In December, it set an order for reviewing the applications that had already been filed, by giving preference to companies that also had launched an expensive and separate process with the Federal Energy and Regulatory Commission.

While the Energy Department vets the export applications individually; FERC’s role is evaluating the physical facilities. Both approvals are required.

The goal in prioritizing applications already in process at FERC, said Christopher Smith, the acting assistant secretary for fossil energy, was to give earlier consideration to projects that have started spending “serious sums of money.” That, in essence, was the Energy Department’s test of viability. Smith said it was designed to allow some “fairness” and give transparency to the review process.

But some groups — including the Center for Liquefied Natural Gas — say the December ranking plan is flawed. CLNG president Bill Cooper said the order of precedence already violates federal administrative law.

Reshuffling the order again — especially for already filed applications — could open up the review process to more regulatory challenges. And Energy Department lawyers already are bracing for litigation surrounding their decisionmaking.

Existing federal law creates a rebuttable presumption that natural gas exports to nations that aren’t U.S. free-trade partners are in the public interest.

But critics of expanded natural gas exports — including some large industrial users of the fossil fuel — say more foreign sales could cause the domestic price to climb, hiking energy bills for manufacturing plants as well as households. Manufacturers who use the fossil fuel as a building block for plastics and chemicals also say higher prices could blunt a competitive advantage that has spurred them to move facilities to the United States.

July 9, 2013 letter from senators urging Moniz to swiftly decide on LNG export applications.

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