Moniz: LNG applications on hold

05 22, 2013 by The Advocate

Energy Secretary Ernest Moniz said Tuesday he will delay final decisions on about 20 applications, including ones in Louisiana, to export liquefied natural gas until he reviews studies by the Energy Department and others on what impact the exports would have on domestic natural gas supplies and prices.

Chris John, president of Louisiana Mid-Continent Oil and Gas Association, said Moniz’s decision was disappointing.

“Even the Energy Department said there would be minimal impacts on the economy,” John said.

The energy industry was moving along a positive path to create more jobs and economic growth with the LNG facilities, and further delays are unnecessary, John said.

Only two LNG export facilities — one in Cameron Parish and the other in Texas — have DOE approval to export the fuel to countries without free-trade agreements. At least eight other export facilities are proposed in Louisiana, according to DOE’s website.

With 20 applications pending nationally, Mid-Continent would urge Moniz to approve them, John said.

Moniz, who was sworn in Tuesday as the nation’s new energy chief, said he promised during his confirmation hearing that he would “review what’s out there” before acting on proposals to export natural gas. Among the things Moniz said he wants to review is whether the data in the studies are outdated.

“I’m somewhat surprised, but I guess I shouldn’t be,” Don Briggs, president of the Louisiana Oil and Gas Association, said of Moniz’s decision.

Some people felt that the president was leaning toward exporting natural gas because of its economic benefits, Briggs said. But Moniz’s decision to study the studies sounds a lot like the Obama administration is stalling.

Briggs said the free market needs to be allowed to work.

The energy industry can’t drill and develop natural gas shale formations if producers can’t export LNG, Briggs said.

The turnabout in the country’s natural gas supply is amazing, Briggs added. In 2006, there were 48 LNG import facilities proposed because natural gas was in such short supply in the U.S.

Now, the U.S. has an abundance of natural gas, but the prices have fallen so much that drilling wells isn’t profitable.

A study commissioned by the Energy Department concluded last year that exporting natural gas would benefit the U.S. economy even if it led to higher domestic prices for the fuel.

Consumer advocates and some manufacturers that use natural gas as a raw material or fuel source oppose exports, saying they could drive up domestic prices and increase manufacturing costs.

Senate Energy Committee Chairman Ron Wyden, D-Ore., and other critics have said the DOE study was flawed and relied on old data and unrealistic market assumptions.

Advocate business writer Ted Griggs and Associated Press writer Matthew Daly
contributed to this report.