AEA Urges DOE to Reconsider Approval of New LNG Export Applications

AEA Urges DOE to Reconsider Approval of New LNG Export Applications

America’s Energy Advantage (AEA) sent a letter to U.S. Secretary of Energy Ernest Moniz urging him to reconsider approval of new LNG export applications to non-FTA nations.

It is our understanding that the Department of Energy may be on the verge of approving another application to export American natural gas to non-FTA nations. If permitted, it would mark the sixth consecutive approval, meaning that this Administration will have agreed to export nearly 12 percent of domestic natural gas production to nations that do not have a reciprocal free trade agreement with the United States. With all due respect, we are very concerned that exporting such a large volume of this strategic commodity, which is vital to U.S. competitiveness, is contrary to the national interest. We respectfully urge you to reconsider approving any additional export applications until a comprehensive review of the current natural gas market conditions is completed,” the letter said.

America’s Energy Advantage said it continues to believe that exporting this volume of natural gas carries unnecessary risk for job creation, a durable manufacturing recovery and consumer spending in our country by significantly raising prices for consumers and manufacturers.

Natural gas prices have already increased by nearly 30 percent since approval of the first LNG export terminal. Approval of the Sempra application would raise the cumulative volume of LNG export capacity to 8.47 Bcf/day, well in excess of the “low export scenario” level identified in the NERA report, according to AEA.

As we noted in our letter of November 8, 2013, the 2011 data upon which the Department is relying to justify these export approvals is obsolete. The natural gas marketplace has changed dramatically since the NERA report was issued, and we are concerned that the Department is not considering more recent expert data and analyses that conclusively demonstrate that increased domestic demand, exacerbated by high exports, will increase natural gas prices to levels harmful to the economy. We do not understand why the Department is unwilling to consider the significant amount of new data on demand and current market conditions,” AEA said.

The Administration is pursuing a dangerous policy path that would take the nation to authorized export levels above 8 Bcf/day based on a theoretical model with no actual market validation.  Much remains that we simply do not know with respect to both supply and demand in the natural gas market.  What we do know is that it is a dynamic and volatile market that is continually changing.  With so much at stake for the economy and U.S. energy security, we should not take chances and gamble with this critical strategic resource,” AEA wrote in the letter.

A renaissance in American manufacturing is underway, powered by abundant supplies of domestic natural gas at affordable prices.  The shale gas boom is a job magnet, attracting foreign investment and domestic industries to invest in the United States.  American natural gas is directly responsible for the seven consecutive months of growth in the manufacturing sector.  To date, more than $100 billion of investment in over 120 different manufacturing projects have been announced.

“Given the uncertainty, unpredictability and historical volatility of the natural gas market, caution is warranted before irreversible harm is done to the economy.  We appreciate your service to our country and your interest in this vital issue, and we would welcome the opportunity to discuss these issues with you in the very near future,” AEA added.

LNG World News Staff, January 15, 2014

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