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US senators press DOE's Moniz for answers on LNG exports

Highlights

Key senators are pressing the US Energy Department for more "transparency and certainty" in its closely watched liquefied natural gas export approval process.

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In a letter sent Friday to DOE Secretary Ernest Moniz, Senators Ron Wyden, an Oregon Democrat, and Lisa Murkowski, an Alaska Republican, want details on how the agency would go about revoking an LNG export license.

Murkowski, who has pushed DOE to quicken the pace of its export approvals, and Wyden, who has pushed for a more cautious approach, want to know what factors the agency would weigh if it decides to revoke an application. For example, the senators ask in their letter, could a third party request a license to be suspended or revoked, would a hearing be held and which emergency authorities by DOE would be used.


"We believe greater transparency and certainty in connection with LNG decisions would be beneficial to all parties," the senators wrote.

Wyden is chairman of the Senate Energy and Natural Resources Committee. Murkowski is the committee's top Republican.

Under the Natural Gas Act, DOE has the authority to issue orders modifying previous application approvals. In addition, the senators point out, the president has authority under the Energy Policy and Conservation Act of 1975 to revoke or modify export licenses in order to meet international energy program obligations, create a Strategic Petroleum Reserve or to conserve energy supplies.

"Some believe natural gas exports could be restricted in the interest of conserving domestic supplies under this authority," Murkowski and Wyden wrote.

In a 2012 letter to then-Representative Edward Markey, a Democrat from Massachusetts, Christopher Smith, who was then deputy assistant secretary of DOE's office of oil and natural gas, said the decision to alter an LNG export approval would "only be exercised after opportunity for hearing and for good cause shown."

Markey is now a senator while Smith is now DOE's principal deputy assistant secretary and acting assistant secretary for fossil energy.

In that letter, Smith said DOE "takes very seriously the good-faith investment-backed expectations of private parties subject to its regulatory jurisdiction. Accordingly, DOE would be reluctant to withdraw or modify a previously granted authorization, except in the event of extraordinary circumstances."

DOE gave a conditional approval in May for Freeport LNG to export the LNG equivalent of as much as 1.4 Bcf/d to non-free trade agreement nations over 20 years from its facility on Quintana Island, Texas. It was DOE's first approval to export LNG to non-FTA countries since 2011, when the agency approved an application for Cheniere Energy's Sabine Pass liquefaction project in Louisiana.

As many as 20 applications to ship LNG to countries that do not have free trade agreements with the US, including Japan, are pending before the DOE.

Moniz has said that more decisions on applications are expected before the end of the year, but has declined to comment on when the next approval may come.

--Brian Scheid, brian.scheid@platts.com
--Edited by Jason Lindquist, jason.lindquist@platts.com