Tuesday, October 2, 2012

Natural Gas Exports and Energy Independence? Why are we sending out energy future overseas!?

Yesterday, Cambridge Energy’s Request for Withdrawal of its application to export LNG was finalized by the DOE. 

This LNG Export authorization application withdrawal is notable for two reasons:
  1. This is the first LNG export withdrawal in this new era of LNG market shifts, and
  2. Cambridge Energy claims they are withdrawing because the Deepwater Port Act doesn’t allow exports from offshore LNG ports….yet.

On the question of LNG exports from offshore ports, the Department of Transportation recently requested that Congress make such exports legal. (See April 16 letter to Congress re: MARAD Enhancement).  According to the letter, the US Coast Guard and the DOE agree that deepwater ports should be allowed to be built for exports from the OCS.  In the rationale section of the letter, signed by Sec. LaHood, the DOT specifically points out that:

“Expanding MARAD’s authority to licenses for LNG terminals used for export would 
provide a safe and secure method for the export of emerging natural gas 
markets and would benefit U.S. energy companies.” (see page 5).

It is discouraging that the DOT, DOE, and Coast Guard would be so enthusiastic about finding new ways to create “benefit” for energy companies that they would propose legislation that would have long-term impacts on the OCS, coastal ecosystems, and, according to the EIA report on LNG exports, likely lead to more fracking, more coal use at US power plants, and increased energy costs for US consumers and industries.

Oh, and then there’s energy independence…

Finally, one thing incredibly vital to note is that, contrary to some claims in the media and on the Hill (that the DOE hasn’t allowed exports yet), there are already over 15 Billion cubic feet per day (Bcf/d, or about 5.7 Trillion cubic feet per year (Tcf/year)) approved exports (click link for specifics from DOE as of Sept 21, 2012).  There are another 12 Bcf/d pending approval – for a total of 27.42 Bcf/d (or 10 Tcf/year).  The export authorizations that the DOE hasn’t yet made are for exports to non-FTA nations. 

The approved and pending-approved authorizations (which under the law must be granted without modification or delay), if exported at capacity every day, means the DOE has authorized up to 43% of our annual domestic natural gas Dry Production to be sent overseas (based on 2011 annual US dry production of 23 Tcf) each year. 

So much for energy independence... 

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