DOE Approves Plan to Export LNG from a Third Terminal
The announcement on Aug. 7 that the federal Energy Dept. would grant conditional approval to export domestically produced liquefied natural gas from a third U.S. terminal was met by cheers from several industry groups, including the American Petroleum Institute and the Center for Liquefied Gas. But some of those same groups complain that the approval process for new LNG export facilities is taking too long.
Industry sources say the approval of additional export facilities could lead to billions of dollars in engineering and construction contracts.
The decision to permit LNG exports from the Lake Charles, La., terminal to countries that do not have a Free Trade Agreement with the U.S. is conditioned on a favorable environmental impact study and approval by the Federal Energy Regulatory Commission. It would allow Lake Charles Export LLC to export up to 2 billion cu ft of natural gas a day for 20 years. It is the third LNG export approval that has been granted in the U.S. The first was approved in May 2011 to Cheniere's Sabine Pass terminal on the Texas-Louisiana border. The second was approved in July 2013 to Freeport LNG's Quintana Island, Texas, terminal.
Bill Cooper, president of the Center for Liquefied Gas, says that while he is pleased the DOE has acted on the Lake Charles application, he would like to see DOE act on the 19 awaiting approval. He says that under existing DOE regulations, the time period for evidence-gathering has closed. "Delaying the decision will bring no new [evidence] to help them in making a determination. Therefore, they need to decide these cases," he says.
On July 9, a bipartisan group of 34 senators urged DOE Secretary Ernest Moniz to expedite the approval of the backlog of applications and prioritize projects based on their merits and commercial viability. But the DOE says it will continue to review each application on a case-by-case basis according to the order of submission.
Deepa Poduval, a principal consultant with Black & Veatch, headquartered in Overland Park, Kan., says it is unlikely that all 19 LNG export facilities will be built. "It could be in the single digits" because of market realities, she says. Nevertheless, there appears to be great interest in new LNG work, notes Gary Hart, vice president of Black & Veatch's energy business. "We are still continuing to get requests to do site studies and feasibility studies for additional export facilities," he says.
Not all senators support expedited approval of applications. Sen. Ron Wyden (D-Ore.) says he is pleased the DOE is continuing to proceed on a case-by-case basis. "With each new permit to send natural gas overseas, the Energy Dept. has a higher bar to prove these exports are in the best interests of American consumers and employers," he says.
