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Texas officials call for easing of LNG exports rules, end to crude exports ban

Houston — Texas state and federal officials on Tuesday called for the introduction of measures that would pave the way to increased exports of liquefied natural gas and an end to the federal ban on exports of crude. They also blasted the Obama administration's energy and environmental policies.

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"Increasing LNG exports would give the US a major geopolitical advantage," David Porter, chairman of the Texas Railroad Commission, told a legislative and regulatory forum hosted by the Texas Alliance of Energy Producers in Houston.

"It would also provide tens of millions of dollars in capital investment and create hundreds of thousands of jobs in the US, all the while advancing the adoption of a clean-burning fuel," Porter said.

Increasing exports of LNG also would help domestic natural gas producers, particularly those in Texas, by creating new markets for large volumes of gas that are currently seeking a home.

"You know we've got a problem right now. We've got too much volume and too little demand for it," he said.

The federal process for approving LNG export facilities "is painfully slow," Porter added.

"We need to encourage Washington to speed up the process for permitting LNG terminals, so we can start increasing natural gas sales and exports beyond our domestic markets to our European and Pacific trading partners," he said.

Porter countered the argument frequently raised by industry critics that increased LNG exports would result in higher US gas prices by citing a study by the US Energy Information Administration that found US production is projected to rise 56% between 2012 and 2040, while consumption is projected to rise only 23% over the same time period.

"We can export this resource to our allies and still take care of our domestic needs," Porter said.

Porter -- like most of the other speakers at the conference, a Republican -- was highly critical of the Obama administration's energy policy, such as the failure to approve construction of the Keystone XL pipeline and the Environmental Protection Agency's proposed Clean Power Plan, which he said would result in the loss of thousands of jobs in energy and related industries.

"America has lacked energy leadership for many years," he said.

US Representative Joe Barton agreed with Porter on the need to speed up the permitting process for LNG terminals.

"We need to streamline the process to make it a little bit quicker. Those things are so expensive to build and they're so expensive to finance that we need to give more regulatory certainty to the permitting processing," he said on the sidelines of the conference.

Barton added that the US Department of Energy and the Federal Energy Regulatory Commission have already granted all the licenses and approvals required to build seven LNG export facilities in the US.

"We're going to have one or two terminals come online in the next year or two," he said.

He also called for a streamlining of the process for allowing oil and gas leasing and drilling on federal lands. "Luckily for us, most lands that have mineral production and reserves are private lands and you've seen the explosion in production on private lands," he said.

"The EPA and the Department of the Interior will tell you they're not against hydraulic fracturing. In fact, the EPA just came out with a report that said it's not an environmental threat," he said.

"But they really slow things down on federal lands. Instead of permits taking two to three weeks or two to three months, it takes two to three years," Barton said.

Barton also said he has introduced a bill in the House of Representatives to remove the federal ban on exports of crude oil and he expects the legislation to be passed by Congress and signed by President Obama as early as the end of 2015.

Texas Lieutenant Governor Dan Patrick joined the chorus at the conference calling for an easing of regulations on exports of LNG and an end to the ban on crude exports.

"We still want to take all restrictions off of us being able to export our products from Texas, and yes, there's a ban on crude oil; there's not the same type of restrictions on natural gas, but there's still restrictions," he said on the sidelines of the conference.

"I believe many in the natural gas industry would like to be more competitive around the world by being able to compete with Russia and others by selling their natural gas in different countries," Patrick said.

"That would be good for the world and good for Texas," he added.

--Jim Magill,
--Edited by Keiron Greenhalgh,