US DOE Tears Down LNG Export Barrier

The U.S. Energy Department has issued the final authorization to Sempra Energy subsidiary Cameron LNG, LLC and Crowley Maritime Corp. subsidiary Carib Energy LLC (Carib) to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States.

The Cameron LNG Terminal in Cameron Parish, Louisiana is authorized to export LNG up to the equivalent of 1.7 billion standard cubic feet per day (Bcf/d) of natural gas for a period of 20 years.

“Today’s decision marks the last major regulatory hurdle for our Cameron LNG liquefaction-export project, clearing the way for execution of the largest capital project in Sempra Energy’s history,” said Debra L. Reed, chairman and CEO of Sempra Energy. “This landmark project will create thousands of jobs and economic benefits for Louisiana and the U.S. for decades to come, while delivering natural gas to America’s trading partners in Europe and Asia.”

Carib is authorized to export LNG up to the equivalent of 0.04 Bcf/d of natural gas for a period of 20 years from the proposed liquefaction facility in Martin County, Florida using approved ISO LNG containers.

 “The challenge for any company in the business of moving LNG in ISO tanks is the flange-to-flange logistics of inland, ocean and island movements in a timely manner to keep the flow of LNG constant to the customer,” said Crowley Vice President Greg Buffington. “Crowley not only has the expertise but also the available assets to make this a successful business, while presenting savings and a greener energy alternative for customers around the world.”

Following the recent announcement of the procedural change, the Department evaluated the Carib and Cameron applications after they completed the environmental review required by the National Environmental Policy Act (NEPA).

The development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country. This increase in domestic natural gas production is expected to continue, with the Energy Information Administration forecasting a record production rate of 74.56 Bcf/d in 2014.

Federal law generally requires approval of natural gas exports to countries that have an FTA with the United States. For countries that do not have an FTA with the United States, the Natural Gas Act directs the Department of Energy to grant export authorizations unless the Department finds that the proposed exports “will not be consistent with the public interest.”

The Energy Department conducted an extensive, careful review of the Cameron LNG and Carib Energy applications. Among other factors, the Department considered the economic, energy security, and environmental impacts and determined that exports at a rate of up to 1.7 Bcf/d and 0.04 Bcf/d for a period of 20 years was not inconsistent with the public interest.