Industry urges DOE to approve LNG exports as comment period ends

US natural gas producers urged the US Department of Energy to quickly approve LNG export applications as DOE’s comment period on allowing US LNG exports closed. “We have plenty of gas to meet our domestic needs and still be able to export substantial amounts to markets overseas,” Erik Milito, upstream operations director at the American Petroleum Institute, told reporters in a teleconference.

“Our advantage isn’t going to last forever,” added Kathleen Sgamma, vice-president of government and public affairs at the Western Energy Alliance, who also participated. “US companies innovated with new technologies to produce our domestic gas surplus. The longer we wait, the likelier we are to lose that advantage as other countries adopt those technologies.”

DOE’s comment period was unique because it provided time for commenters’ to respond to other submissions, she noted. API, IPAMS, and others submitted supplemental comments on Feb. 25 to rebut points raised by LNG export opponents. “The opponents said demand in the study which DOE used has been underestimated,” said Sgamma. “We think production has likewise been underestimated.”

She and Milito disputed opponents’ statements that the industry wants unfettered exports. “Globally, about 100 bcfd of projects is proposed,” he indicated. “There’s a market for only about 25 bcfd. Just approving applications doesn’t mean all these projects will be built.”

Construction, transmission, and liquefaction costs also would limit exports, which in turn would keep domestic prices from rising significantly, Milito added. “The law states these exports are presumed to be in the national interest,” he said. “They already are deemed as such to countries which have free trade agreements with the United States. It shouldn’t be hard to demonstrate that non-FTA nations also qualify.”

Processing order

DOE said once the comment period closes, it would begin to act on 16 applications to export US LNG to non-FTA countries in the order they originally applied. Dominion Cove Point LNG LP in Maryland is third on the list. It also submitted additional comments rebutting opponents’ concerns on Feb. 25.

So did America’s Natural Gas Alliance, which represents 27 of the nation’s leading gas producers. “There is a clear case to be made for supporting a natural gas export market. It’s an economic and environmental win,” said Amy Farrell, ANGA’s vice-president of regulatory affairs.

“Realistic export scenarios that recognize our vast domestic production potential and market forces strongly suggest long-term price stability in domestic gas prices,” she maintained.

Sgamma said more LNG exports potentially could revive dry gas production in the Green River and Piceance basins which is being shut in, and provide a market for much of the gas associated with Bakken shale crude oil production that now is being flared.

“It’s pretty clear that the more LNG we export, the more benefits there are not just to the oil and gas industry, but also to the nation’s economy in general,” she observed.

Contact Nick Snow at nicks@pennwell.com.

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