Obama administration not opposed to LNG exports

05 15, 2012 by Reuters

The Obama administration is not opposed to exporting liquefied natural gas but will depend on an official analysis to guide its decision on whether to allow more gas export projects to proceed, a White House official said on Monday.

The Energy Department, which must approve gas exports to all but about a dozen countries, has said it will hold off on allowing any more exports until a study it commissioned on the economic impact of sending gas abroad is completed later this summer.

"We want analysis to drive the decisions," Heather Zichal, deputy assistant to the president for energy and climate change, said at an event on shale gas energy sponsored by the American Petroleum Institute.

"As a general rule of thumb we are certainly not opposed to LNG exports," she added.

Bolstered by massive expansion in U.S. natural gas reserves, companies such as Dominion Resources, Sempra Energy and Southern Co are now lining up to get permission to send natural gas to foreign countries.

The department had approved exports from just one project, Cheniere Energy's Sabine Pass terminal. After that approval, the department said it would wait on the results from a study of the economic implications of exports before acting on any more applications.

Some lawmakers and manufacturers have raised concerns that allowing gas exports could raise gas prices for consumers and industry, however.

"Our goal here is to make sure we're producing this, but also protecting American consumers and making sure we're sending right signal to industry and manufacturing sector," Zichal said.


Zichal's comments come as the Obama administration defends its energy record ahead of the November elections.

Facing accusations that it has focused on renewable forms of energy such as solar and wind to the detriment of traditional fossil fuels, the White House has stressed its support for domestic oil and gas production.

Recently, the administration has made some concessions to oil and gas industry concerns, giving drillers more time to comply with recently finalized air rules from the Environmental Protection Agency and proposing to allow drillers on federal lands to disclose chemicals used in hydraulic fracturing after they complete the controversial drilling process.

Zichal disputed criticism that the White House was reaching out to the oil and gas industry as part of an election year strategy. Instead, she said the administration is working with industry to ensure that regulations are sensible and achievable.

"It's probably safe to say that this notion that we've rolled out the welcome mat ... where we're all holding hands and singing Kumbaya is not exactly where we're at today," Zichal said in a speech at the API event.

Still Zichal conceded that the administration has worked in the last few months to create a better working relationship with oil and gas companies, saying that the administration "probably could have done more outreach in the beginning."

The American Petroleum Institute, the major trade group for oil and gas companies, has been one of most vocal opponents of the administration's energy policy.

API president Jack Gerard acknowledged there has been a shift in the administration's approach, but he said more must be done to protect and promote domestic fossil fuel production.

"Today they're at least listening. Does that mean they're moving entirely in the direction we believe they should? No, of course not," Gerard told reporters after the shale energy event.

"But there has been a recognition that some of the proposals they have made need to be pushed back."