The U.S. Senate is turning up the heat on Department of Energy Secretary Ernest Moniz on the subject of LNG exports. In a very unusual move, a bipartisan group of 34 senators has asked the Secretary to expedite approvals of 20 pending permit applications by companies seeking to export LNG to non-free trade agreement (FTA) countries. The senators made their request in a letter thanking Secretary Moniz for DOE's recent approval of a second export application (the subject of a prior alert) by Freeport LNG Expansion, L.P.
The 23 Republicans and 11 Democrats representing gas-producing states stressed the geopolitical implications of LNG exports, especially regarding the need to reduce the world’s reliance on Iranian energy supplies and provide secure LNG supplies to longstanding allies and strategic partners in Europe and Japan.The letter also stressed the importance of DOE approval for the financing of LNG export projects.
The senators expressed frustration with the currently expected process of considering the remaining 20 permit applications in six- to eight-week intervals. At such a rate, it would taketwo years for DOE to rule on the final application, hurting the market opportunities for these projects. The senators requested a faster process so the United States can retain a competitive position against other natural gas-exporting nations.
Finally, the senators asked the Secretary whether he would consider increasing the speed of decision making on these applications, evaluating multiple permit applications during the next rounds of consideration, and prioritizing the projects that have clearly established commercial viability.
At a Senate Committee on Energy and Natural Resources hearing earlier this year (also the subject of a prior alert), LNG exports were hotly debated. Supporters argued that exports would create jobs in the natural gas industry, allow markets to function, and advance free trade, while opponents advocated for an “America First” policy where the United States would use its gas first and address its food security, defense, and unemployment issues before considering exports.
If you have any questions, please contact any member of the Energy and Project Finance Group.
Copyright © 2013 by Ballard Spahr LLP.
(No claim to original U.S. government material.)
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.
This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.