GOP urges swift action from Energy Department on natural gas exports

“This announcement is welcome news but we need faster approvals to support domestic job creation and economic growth and to ensure we don’t miss our window of opportunity. The rest of the world won’t stand idly by as we continue to debate what DOE’s own study already confirmed would be a net positive for the U.S.,” a Republican House Energy and Commerce Committee spokeswoman told The Hill in an email.

Republicans have been pushing the DOE to rule on a slew of outstanding applications for sending natural gas to nations that lack a free-trade agreement with the United States. Under federal law, those deals must be in the public interest and therefore invite more scrutiny.

The U.S. is one of just several countries to tap large natural gas deposits in recent years, and many lawmakers see a ticking clock when it comes to entering the market.

“We must remember that the window for building out our LNG [liquefied natural gas] capacity is not open-ended. It could close if we don’t seize this opportunity to have America’s natural gas play a major role in the growing global gas market,” Sen. Lisa Murkowski (R-Alaska), the top Republican on the Energy and Natural Resources Committee, said in a statement.

The DOE on Wednesday approved a 2 billion cubic feet of natural gas per day (Bcf/d) license for Lake Charles Exports, which hopes to build the proposed terminal in Lake Charles, La.

Many experts have predicted the global market can handle between 6 to 8 Bcf/d of U.S. natural gas exports. And the three DOE-approved projects, which still must secure the go-ahead from the Federal Energy Regulatory Commission, are getting close to that figure.

The Lake Charles Exports facility would bring approved export capacity to non-free trade nations to 5.6 billion cubic feet of natural gas per day (Bcf/d).

That’s drawing attention from Sen. Ron Wyden (D-Ore.), the chairman of the Energy and Natural Resources Committee.

Wyden has often raised concerns that expanding exports to non-free trade agreement nations too rapidly could hike domestic energy prices and sharpened his tone Wednesday in light of the Lake Charles Exports decision.

“With each new permit to send natural gas overseas, the Energy Department has a higher bar to prove these exports are in the best interests of American consumers and employers,” he said in a statement.

Wyden and other Democrats worry unrestrained exports would forfeit a newfound competitive advantage for U.S. manufacturers.

America’s Energy Advantage, a group of manufacturers that has promoted restraint on increasing natural gas exports, also emphasized the threat of higher energy prices.

“Each permit approval brings us closer to the point that would begin to harm the manufacturing renaissance. We thank the DOE for its continued commitment to a sequential process that takes cumulative impacts into account,” the group said in a statement.

Export proponents, however, have argued that the market will prevent unfettered exports as other nations compete with U.S. shipments. That means it’s unlikely that every approved license will translate into construction, they contend.

Bill Cooper, president of the Center for Liquefied Natural Gas, which supports more exports, said he expects the calls of export skeptics, such as Wyden to grow louder as DOE-approved applications near the 6 to 8 Bcf/d mark.

“I think he has been fairly consistent in those statements. As more applications get approved, I think if we look at his past statements, there’s going to be a more cautious tone expressed as we move along,” Cooper said of Wyden and others in an interview.

Cooper also stressed that the DOE shouldn’t stop approvals at 8 Bcf/d, as the facilities won’t run at full capacity all the time. That means the DOE has to allow an “overbuild” of export terminals, he said.

A Senate Democratic Energy and Natural Resources aide challenged the assumption that market forces would arrive at an export equilibrium.

The aide remarked that developers overbuilt natural gas import terminals by misinterpreting market signals toward the end of last decade and cautioned that something similar could happen with exports.

Regardless, there might be plenty more time to hash that out, as the approvals from the DOE appear headed for a halt.

ClearView Energy Partners, a consulting group, said in an analysis that language in the order the DOE issued Wednesday points to a “pause” in the review process at the end of the year.

The department said in a release that announced the Lake Charles Exports ruling that it would “assess the impact of any market developments” on outstanding applications when “further information becomes available at the end of 2013.” And Christopher Smith, the Department of Energy’s acting assistant secretary for fossil energy, said the same in a June House Energy and Commerce Committee hearing.

To ClearView, that suggested that “future projects may begin to receive incrementally greater scrutiny.”

Cooper agreed, saying that the department would likely aim to incorporate new Energy Information Administration data.

“They want to see what the market conditions are to see if they’re starting to see any sort of adverse impacts on the domestic need or anything that would adversely impact the public interest standard,” he said.

Cooper said doesn’t anticipate a negative outlook on that front, noting that forecasts look strong for domestic natural gas production.

“I really don’t see anything that would be disruptive to this process,” Cooper said.