Mayors, API separately urge DOE to authorize LNG exports

A group of US Midcontinent mayors and the American Petroleum Institute separately urged the US Department of Energy to authorize LNG exports.

“We should be well beyond simply kicking the can down the road. It’s urgent that we accelerate this process,” Tulsa Mayor Dewey Bartlett said in a teleconference.

An hour later, API Senior Economist John C. Felmy told reporters, “The government’s own analysis shows that gas exports could benefit the entire US economy. If exports were allowed, more gas could be produced, and additional supplies would enhance our energy security, not reduce it.”

Their observations came as DOE’s deadline approaches for public comments on whether LNG exports are in the national interest. DOE has been considering the question on individual export applications already.

“DOE is asking for input and suggestions, and we’re exercising that right,” said Bartlett, who was in Washington for the US Conference of Mayors. “I believe there’s no need for further evaluation. This should be decided fairly quickly so we could take advantage of this opportunity. Many of our allies—Japan and South Korea especially—want to see us export LNG because they need it.”

He said mayors from Houston, Fort Worth, Oklahoma City, and other mayors in the conference’s LNG coalition, as well as Arkansas Gov. Mike Beebe (D) and West Virginia Gov. Earl Ray Tomblin (D), have written US Sec. of Energy Steven Chu expressing a similar view. The officials represent areas which are heavily involved in natural gas production and transportation but physically removed (except Houston) from potential export sites, Bartlett said.

A common interest

“We’re mayors from different-sized cities with a common interest,” he indicated. “In Tulsa, we recently completed a study of energy’s effect on job creation. Of the 400,000 jobs we have in the area, almost 50%—191,000—are related to energy. LNG exports would help Tulsa in several ways. We have over 20,000 people employed in oil and gas manufacturing, second only to Houston. The amount of processing plants, pipelines, pumps and compressors which would have to be built could be built here.”

API’s Felmy said the essential question is the possible impact of LNG exports on US gas prices. “Virtually all the studies say that generally prices wouldn’t change, or impacts would be low,” he said. “If you look at year-to-date well completion data, you will see more exploratory gas wells have been drilled but not as many development wells. That means that the gas has been found, and would be ready to produce.”

Responding to US Senate Energy and Natural Resources Committee Chairman Ronald A. Wyden’s (D) recent call for a second look at the study NERA Economic Analysis did for DOE on LNG export impacts, Felmy said that Wyden and others’ arguments against it were based on its using the 2011 US Energy Information Administration Annual Energy Outlook when the 2012 version shows more domestic gas demand.

“But that’s only half the equation,” he continued. Supplies also have grown, so it’s possible that a new study would reinforce the same point.”

Felmy said he hadn’t fully evaluated findings of a Dec. 10-24 survey of 1,000 voters by America’s Energy Advantage—a coalition of three chemical companies, two metals manufacturers, and the American Public Gas Association that has raised concerns over possible LNG export impacts—that 80% of the US public opposes such exports without restrictions. But the API economist suggested that responses may have been influenced by the way in which questions were asked.

“In general, we as a country strongly support exports,” Felmy said, adding, “For some reason, we wrap ourselves up in the idea that energy is a strategic commodity and shouldn’t be exported. We’re going to talk about cases where there’s a lot of gas in one part of the country which can’t be sold in another, but could be exported.”

Contact Nick Snow at nicks@pennwell.com.

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