UPDATE 2-Republicans press US energy department on natgas exports

Tue Mar 19, 2013 10:55pm GMT

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* DOE has not taken a position on LNG export report -official

* Republican says review process should be expeditious

* Democrats question impact of exports on prices

By Ayesha Rascoe

WASHINGTON, March 19 (Reuters) - The U.S. Energy Department said on Tuesday it is wading through nearly 200,000 comments received in response to a report on the impact of natural gas exports, as Republicans pushed for the government to move "expeditiously" to consider the many pending export applications.

Released in December, the department-sponsored report gave a resounding endorsement of the economic benefits of exporting liquefied natural gas, saying the more exports, the better.

But a vocal contingent of manufacturers and heavy industrial companies, as well as environmentalists, have blasted the report by NERA Economic Consulting. They called on the government to revisit the study using updated data and different criteria.

Acting Assistant Secretary for Fossil Energy Christopher Smith told lawmakers the department has not taken a position on the NERA study or on an earlier analysis by the Energy Information Administration.

"DOE continues to review the comments that have been received ... and will address those comments when it issues decisions on the applications," Smith said in prepared testimony to the House oversight committee.

The last comment period on the export report ended on Feb. 25. The department said it received more than 188,000 initial comments and about 2,700 additional comments.

The shale gas bonanza has led to a natural gas glut in the United States, where production has quickly begun to outpace demand. Gas drillers argue that development will be curtailed if they are not able to tap into foreign markets beyond those of countries that have free trade agreements with the United States.

While the government has long allowed exports of natural gas to Canada and Mexico via pipeline and LNG exports from Alaska, this is the first time the United States is weighing substantial gas exports more broadly

"As a nation we have already decided that exporting is consistent with the national interest," said Congressman James Lankford, the Oklahoma Republican who heads the House oversight subcommittee on energy. "The only issue is how and when the department will process the remaining LNG export applications."

It is essential the process move ahead "fairly and expeditiously," Lankford added.

Lankford is a member of a working group backing increased LNG exports that was founded last week by Ohio Congressmen Tim Ryan, a Democrat, and Bill Johnson, a Republican. The group plans to hold meetings and keep members informed of developments on the export issue.

Nearly 20 projects have sought permission from the Energy Department to export gas to new markets.

In his testimony, Smith reiterated that the department plans to make decisions on a case-by-case basis.

Energy analysts have said that even with government approval it is unlikely that most of the proposals will come to fruition, citing high upfront costs of building export terminals and a limited market for exports.

The department approved LNG exports from Cheniere Energy Inc's Sabine Pass terminal in 2011, but afterward said it would commission a study on the cumulative effects of exports before weighing in on any more proposals.

Republicans on the panel pressed Smith on whether the Energy Department had an official timeline for issuing its decisions, stressing that the United States was competing against other countries such Australia and Qatar in securing a limited number of contracts in the global LNG market.

Smith declined to estimate when the department will act on applications, noting that the comment period only wrapped up a few weeks ago.

"It's our job to get to a defendable, transparent decision as expeditiously as possible," Smith said. "We have a tremendous sense of urgency in this process."

Congressman John Fleming, a Republican from Louisiana, also questioned why the department released the NERA report to the public last December when it first received the study from the firm over the summer. Smith said the department had to ensure it had a proper understanding of the report and that its questions about the report were answered.

The Center for Liquefied Natural Gas, an industry trade group, expressed concern that the department was still unable to offer any specific timing on decisions.

"The lack of regulatory certainty as to a timeline on mere process is unfortunate and adversely impacts all applicants who are waiting on DOE to restart its considerations," said Bill Cooper, president of the trade group.

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