LNG facility is in public interest, says DOE
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September 26, 2013
LNG facility is in public interest, says DOE

With a recent conditional approval by the Department of Energy (DOE), there are now four energy companies progressing toward global export of domestically produced liquefied natural gas (LNG). 

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In its latest action, the DOE conditionally authorized Dominion Cove Point LNG, LP (DCP) to export LNG to countries that do not have a Free Trade Agreement (FTA) with the United States from the Cove Point LNG Terminal in Calvert County, Maryland.  In October 2011, DCP received approval to export LNG from this facility to FTA countries.  Subject to environmental review and final regulatory approval by the Federal Energy Regulatory Commission (FERC), the facility is conditionally authorized to export up to 0.77 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years.

Enough gas to go around?

According to the DOE, the development of U.S. natural gas resources is having a transformative impact on the U.S. energy landscape, helping to improve our energy security while spurring economic development and job creation around the country. The increase in domestic natural gas production is expected to continue, with the Energy Information Administration (EIA)forecasting a record production rate of 69.96 Bcf/d in 2013.

But concerns have emerged that the large-scale export of LNG will result in upward pressure on energy prices in the United States.  The DOE responded in December 2012 with a report that found that unlimited export of LNG will have a net economic benefit for the U.S. 

FERC review

The DCP approval is contingent on a satisfactory finding by the FERC, which is responsible for ensuring that the siting, construction, and operation of LNG facilities are consistent with the public interest as specified in the Natural Gas Act.  The FERC is also leading the review of the project under the National Environmental Policy Act.  The review must result in a finding that the project will have no significant impact. 

Of the four LNG terminals that have received DOE consent to export LNG to non-FTA countries, only the Sabine Pass project in Cameron Parish, Louisiana, has received FERC’s approval to site, construct, and operate facilities to liquefy domestic natural gas for export to markets worldwide.

Opposition

The DCP project was opposed by several trade unions, eight Riverkeeper organizations, and the Sierra Club.  According to the Sierra Club, LNG-export projects such as DCP will lead the country into a “dirty energy future.” 

"Exporting LNG to foreign buyers will lock us into decades-long contracts, which in turn will lead to more drilling–and that means more fracking, more air and water pollution, and more climate-fueled weather disasters like record fires, droughts, and superstorms like last year's Sandy,” said Sierra Club’s Deb Nardone. 

The DOE did not agree.  “Based on a review of the complete record, DOE [and DOE’s Office of Fossil Energy] concluded that the opponents of the DCP Application have not demonstrated that the requested authorization will be inconsistent with the public interest and finds that the exports proposed in this Application are likely to yield net economic benefits to the United States,” stated the DOE.

Nardone notes that the Sierra Club continues to seek enforcement of a decades-old agreement between the Sierra Club and DCP, which “clearly prohibits” expansion of the facility to allow for exports.  Nardone says the Sierra Club intends to hold Dominion accountable for complying with commitments it made to protect the Cove Point environment.

DOE's conditional authorization of the DCP project

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