USA: Markey Calls on DOE to Tighten LNG Export Approvals

The Department of Energy approved the second natural gas export permit for a Freeport, Texas terminal. Rep. Ed Markey (D-Mass.) expressed concerns about America’s natural gas export policy, especially the scale that should be allowed and how impacts on American consumers and businesses are assessed.

Rep. Markey has called on the Energy Department to bring more rigor to their public interest determination process and has introduced legislation that would correct this rigged process.

Rep. Markey also noted that BP would be the major contractor for the export of this gas, raising additional questions about who would really benefit from this export permit approval, and larger scale exports in general.

“The Department of Energy still doesn’t even know what the impact of natural gas exports will be on domestic businesses and consumers, but they are approving more exports anyways. We need a robust debate about whether it is in the public interest to reduce one of our biggest competitive advantages in the global economy by exporting American natural gas before we move forward with approving exports,” said Rep. Markey, the top Democrat on the Natural Resources Committee. “Right now, we’re driving blind with regard to natural gas exports. The analysis that was done for the Energy Department has been roundly panned as flawed and inadequate. We need to fully understand the costs to consumers and to our economy before rushing ahead with exporting our natural gas resources. We know who the winners are in this deal – big oil and gas companies, especially BP, which has already contracted to purchase half the gas from this new export facility. We know who will ultimately lose if we keep barreling ahead with more exports – American consumers and manufacturers who depend on low-cost, domestic natural gas.”

24 applications have already been submitted to the Department of Energy requesting permission to export 30 billion cubic feet of natural gas per day, or more than 40 percent of total current U.S. consumption. Last year, an Energy Department study found that exporting less than half that amount could lead to a 54 percent spike in domestic prices.

In addition to direct impacts on energy costs for American consumers, studies have found higher domestic natural gas prices resulting from exporting could have significant negative impacts on U.S. manufacturers in industries like chemicals, fertilizers, and steel, which consume large amounts of natural gas and often site their facilities based on access to and the price of natural gas. Since the recent boom in natural gas production and moderation of domestic prices, nearly 100 new natural gas-intensive manufacturing projects have been announced in the United States. Those projects represent over $90 billion in investment and billions of cubic feet of additional future daily natural gas use and could be jeopardized by exporting large amounts of domestic natural gas.

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LNG World News Staff, May 20, 2013; Image: democrats.naturalresources.house.gov