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US LNG process slowed by government shutdown, no pause planned: DOE official


The US Department of Energy is not suspending decisions on pending applications to export liquefied natural gas, but the process has been slowed by last month's federal government shutdown, a key agency official said Thursday.

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The 16-day government shutdown "impacted our ability to move forward" on approving pending LNG export applications, Christopher Smith, DOE's acting assistant secretary for fossil energy, said during his Senate Committee on Energy and Natural Resources nomination hearing.

While Smith conceded the shutdown may have slowed the process, he dismissed criticism from Senator John Barrasso, a Wyoming Republican, that DOE was dragging its feet in approving pending applications to ship LNG.

"Global demand is limited, the time to act is now," Barrasso said.

But Smith, echoing frequent statements from Energy Secretary Ernest Moniz on LNG exports, said DOE is moving "expeditiously" on approvals and will act on the pending applications on a "case-by-case basis."

While Smith said each DOE export decision needed to be comprehensive in order to stand up to legal scrutiny, he denied the agency was taking a "pause" in approvals.

In September, DOE authorized Dominion to export LNG from its Cove Point terminal in Maryland to non-fair trade agreement countries, only DOE's fourth such approval, bringing the total volume of non-FTA permits above 6 Bcf/d, a level some see as having a negative impact on US gas prices.

Senator Ron Wyden, an Oregon Democrat and chairman of the committee, speculated DOE could take a "pause" in approvals in order to study the impacts of its earlier approvals on the market, but Smith denied this. He said DOE was not considering a new study on the impact of LNG export, but was "constantly" monitoring market signals and the latest data in order to make future decisions.

While the DOE must quickly authorize exports to FTA nations, it can limit or block exports to non-FTA countries if they are not in the public interest. The department has done a pair of studies on the impact of LNG exports on domestic gas prices and the economy to help it make the public interest determinations.

There are at least 21 applications pending before the DOE.

Barrasso and 11 other western state House and Senate members sent a letter to Moniz on Tuesday, pushing him to quickly approve the Jordan Cove Energy Project, which is currently the third in the DOE's approval queue and not expected to be approved until sometime next year.

The Oregon project has approval to ship 1.2 Bcf/d to FTA countries, but is seeking permission to ship 0.8 Bcf/d to non-FTA countries.

"West Coast LNG export facilities, such as Jordan Cove, would provide Colorado, Utah and Wyoming, and Indian tribes, such as the Ute Indian Tribe, direct access to international markets," the lawmakers wrote. "Specifically, Jordan Cove would allow gas shipped on the Ruby pipeline to be exported to Asian markets."

Wyden indicated the Jordan Cove project could also get more support than other projects because it is expected to get a lot of its supply from Canada, which would likely not impact US gas prices, a frequent criticism of LNG export opponents.

--Brian Scheid,
--Edited by Annie Siebert,