Recently appointed U.S. Energy Secretary Ernest Moniz has seemed to keep his word on "moving expeditiously" to evaluate applications for more liquefied natural gas (LNG) export facilities. Shortly after Moniz’s confirmation in May, the Obama administration announced its second approved LNG export terminal. Moniz has said additional research is needed before he can approve any more of the nearly 20 pending applications.
The Obama Administration recently approved a third LNG export facility for the U.S. Lake Charles Exports, LLC. The first LNG facility to receive export approval was the Cheniere Sabine Pass Terminal, which got its ticket punched in May 2011. The approvals are conditional licenses from the Department of Energy (DOE) to ship to nations with non-Free Trade Agreements, which essentially means all countries.
The Energy Department has now announced that it has conditionally authorized Dominion Cove Point LNG, LP to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States from the Cove Point LNG Terminal in Calvert County, Maryland. Dominion Cove Point previously received approval to export LNG from this facility to FTA countries on October 7, 2011. Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export at a rate of up to 0.77 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years.
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 69.96 Bcf/d in 2013.
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 application to export LNG from the Dominion Cove Point LNG Terminal. Among other factors, the Department considered the economic, energy security, and environmental impacts - as well as public comments for and against the application and nearly 200,000 public comments related to the associated analysis of the cumulative impacts of increased LNG exports – and determined that exports from the terminal at a rate of up to 0.77 Bcf/d for a period of 20 years was not inconsistent with the public interest.
The full conditional authorization can be found HERE.
The Path Forward on LNG Export Applications
The Energy Department will continue to process the applications currently pending on a case-by-case basis, in the order of precedence previously detailed. During this time, the Department will continue to monitor any market developments and assess their impact in subsequent public interest determinations as further information becomes available, including the EIA’s Annual Energy Outlook Report at the end of 2013.