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US will not revoke LNG exports to control prices-DOE
March 1, 2012 / 6:37 PM / 5 years ago

US will not revoke LNG exports to control prices-DOE

* DOE says "reluctant" to revisit gas export approvals

* Lawmakers raising concerns about impact of exports

* EPA asked to ensure enviro analysis includes fracking

By Ayesha Rascoe

WASHINGTON, March 1 (Reuters) - The U.S. Energy Department will not attempt to control natural gas prices by revoking approvals granted for gas export terminals, a department official said, as lawmakers and green groups stepped up their attacks on attempts to send U.S. gas abroad.

The department has argued that federal law gives it the authority to revisit liquefied natural gas export applications it has approved, but Deputy Assistant Secretary Christopher Smith said the department would be hesitant to use this power.

"DOE does not ... intend to use this authority as a price maintenance mechanism," Smith said in a letter to Congressman Edward Markey released Thursday.

"DOE would be reluctant to withdraw or modify a previously granted authorization, except in the event of extraordinary circumstances," Smith added.

The export of natural gas has quickly become a hot button political issue as lawmakers, environmentalists and trade groups argue over how to use the country's newfound natural gas bounty.

The Energy Department has already approved one export application from Cheniere Energy for its Sabine Pass terminal, and other companies including Southern, BG , Dominion and Sempra have also requested permission.

FUEL OF FUTURE

Approving these terminals would raise prices for domestic consumers and undermine the nation's transition away from coal and foreign oil to cleaner natural gas, according to a report released by Markey on Thursday.

Markey, the top Democrat on the House Natural Resources Committee, has led the charge against expanding the export of natural gas, including introducing legislation that would block gas exports.

"We really have a chance ... to use natural gas as our fuel of choice in the future," Markey said at a forum on fossil fuel exports.

Gas drillers have warned that constraining exports would limit production by making development unprofitable. Some companies have already begun to cut back on production because of the current gas glut.

Natural gas exports to all but the countries that have free trade agreements with the United States require the Energy Department's approval.

The department is conducting a study due out later in the spring that would analyze the economic effects of allowing more exports. The department has said it would not approve more applications until this report is completed.

CONSIDERING FRACKING

Advances in drilling techniques have allowed U.S. drillers to tap the nation's vast shale gas reserves, opening the door to gas exports when just a few years ago industry was expecting the United States would need to import natural gas to meet demand.

Environmental groups concerned about pollution from shale gas production and a drilling technique known as hydraulic fracturing have launched their own campaign to stop export projects from going forward.

The Sierra Club and other green groups on Thursday asked the White House Council on Environmental Quality and the Environmental Protection Agency to make sure the federal government analyzes the environmental impact of shale gas production before approving terminals.

Previous evaluations of gas export terminals have not assessed the consequences of natural gas development.

"With the health of our communities and our environment at stake, it's up to our leaders at EPA and other agencies to keep their commitment to protecting Americans from the toxic threats to our air and water that come with liquefied natural gas," said Michael Brune, executive director of the Sierra Club, in a statement. (Reporting by Ayesha Rascoe; editing by Jim Marshall)

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