The Industrial Energy Consumers of America (IECA) asked US Department of Energy Acting General Counsel John T. Lucas for a legal review of DOE approvals of LNG exports to customers in countries without a free-trade agreement with the US. Its Aug. 22 request came 5 days after it called for a moratorium on such exports in a letter to US Energy Sec. Rick Perry (OGJ Online, Aug. 17, 2017).
DOE is required under the 1938 Natural Gas Act to determine that US LNG shipments to customers in non-FTA countries are in the US national interest. It already has approved such sales equal to 20.6 bcfd, or about 27.3% of total US gas demand in 2016, in addition to 33.4 bcfd, or about 44.4% of total US gas demand in 2016, to FTA countries that the Natural Gas Act (NGA) automatically considers in the US national interest, IECA Pres. Paul N. Cicio said.
“Today, the US gas market is a ‘free market’ whereby price is determined by domestic supply and demand,” Cicio said as IECA released its letter to Lucas. “If we export too much LNG, prices will eventually rise to global levels. At that point, foreign nations demand for LNG will dictate what price Americans pay. This is certainly not in the interests of the American public,” the letter said.
Congress clearly intended to protect consumers when it passed the NGA by requiring that US gas sales to non-FTA countries satisfy the national interest test, IECA’s letter said.
“These are massive amounts of US gas resources that DOE has committed to foreign nations and their buyers, many of which are state-owned enterprises, for periods of 20-30 years,” it said. “LNG exports reduce foreign LNG buyer risks and increases risks upon US consumers—who have no alternative for natural gas.”
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