Second La. facility gets OK to export LNG

08 08, 2013 by The Advocate

A second facility in Louisiana received approval Wednesday from the U.S. Department of Energy to export liquefied natural gas to countries not covered by free trade agreements.

Lake Charles Exports LLC is the third such company nationally to be granted approval. Cheniere Energy’s Sabine Pass LNG Terminal in Cameron Parish was the first Louisiana plant to get that approval.

The push by corporations to export more liquefied natural gas coincides with the domestic natural gas boom in Louisiana and other states, as well as the demand in Europe and Asia for more affordable energy sources.

Louisiana Oil and Gas Association President Don Briggs said the federal decision helps “keep the free market working.”

“We have an abundance and a cheap supply of natural gas in the United States, especially Louisiana,” Briggs said.

The increased exportation means more revenue, jobs and gas exploration, Briggs said, and it keeps the natural gas from being placed in storage.

The country has seen an “amazing turnaround” from importing natural gas just five years ago to becoming an exporter, he said.

The concern of others is that increased exportation of the nation’s natural gas could cause domestic energy prices to eventually spike. That is why the federal government is limiting the number of permits approved.

Sen. Ron Wyden, D-Ore., who chairs the Senate Energy and Natural Resources Committee, expressed caution.

“While I am pleased to see DOE is continuing to proceed on a case-by-case basis, with each new permit to send natural gas overseas, the Energy Department has a higher bar to prove these exports are in the best interests of American consumers and employers,” Wyden said in a statement. “I will continue to closely monitor DOE’s process going forward.”

The Energy Department has now approved export permits totaling 5.6 billion cubic feet per day, including up to 2 billion for the Lake Charles project.

That is just below the 6 billion to 8 billion cubic feet per day that analysts have projected as the likely range for U.S. LNG exports, without impacts on domestic prices, according to Wyden.

But members of the Louisiana congressional delegation praised the approval of the export application, although concerns were expressed about the slow pace of the approval process.

Several other applications remain pending in Louisiana, and Rep. Charles Boustany, R-Lafayette, noted that the latest approval took more than two years. However, he noted that southwest Louisiana “continues to grow as an international hub for global energy commerce.”

“The boom in shale gas exploration and production, along with the opportunity to export LNG to foreign trade partners, is a game-changer for our economy and energy security. Louisiana is in a prime position to continue leading the effort to develop and transport this resource,” added Sen. Mary Landrieu, D-La. “I hope that the Department of Energy will work to address the other license applications in a timely manner. It is extremely important that this process is efficient, while striking a balance that works for both the producers and consumers of natural gas.”

Sen. David Vitter, R-La., said he is pleased with the government for moving to “finally crack open the door a little wider” on exports.

“Even though this is only the third permit authorized since 2011, we are making progress toward the continued development of domestic natural gas production and the creation of much-needed jobs,” Vitter said.

Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said the situation is good for Louisiana and gas producers along the state’s Haynesville Shale and in the Gulf of Mexico. He added that it is time for more exporting beyond only the 20 or so nations that the U.S. has free trade agreements with.

“What is not realized by many Americans is that many close U.S. allies do not have free trade agreements with the United States. It includes Japan and many others,” John said in a statement. “Opening up a greater number of potential destinations ensures the viability of this multibillion-dollar investment.”