UPDATE 1-US lawmakers press DOE to speed LNG export review

Fri Jun 29, 2012 5:40pm EDT

* DOE needs renewed sense of urgency on exports-letter

* Few lawmakers had taken up LNG export issue

* Lawmakers say U.S. risks falling behind Australia, Canada

By Ayesha Rascoe

WASHINGTON, June 29 (Reuters) - U.S. lawmakers representing states rich in shale gas called for the Obama administration to expedite approval of liquefied natural gas exports on Friday, mounting the first real push in support of gas exports on Capitol Hill.

A bipartisan coalition of 21 lawmakers in the House of Representatives said the Obama administration needs to move forward with its review of companies looking to export LNG.

"We urge you to bring a renewed sense of urgency to the approval process," the group said in a letter to Energy Secretary Steven Chu.

Until now, lawmakers have mostly stayed on the sidelines regarding the issue of selling gas abroad, a prospect that has come to the forefront due to the booming U.S. natural gas sector, but potentially pits manufacturers against the oil and gas industry.

The few lawmakers that had been vocal about exports, including Congressman Edward Markey and Senator Ron Wyden, raised concerns that the United States might be at risk of trading away its newfound energy security advantage and raising prices for consumers.

STALLED PROCESS

Drilling innovations have allowed companies to tap vast shale gas reserves in places not traditionally associated with oil and gas production, such as Pennsylvania and Ohio. The rapid expansion has also led to a gas glut that has pushed gas prices down to levels producers say are unsustainable.

"One answer to the growing supply and demand imbalance is to allow American producers to capture a share of a growing global LNG market," the lawmakers said in their letter.

The letter in support of exports was spearheaded by Ohio congressmen Bill Johnson, a Republican, and Tim Ryan, a Democrat.

"We're certainly encouraged to see Congress weighing in on the issue at the Department of Energy," said Bill Cooper, head of the Center for Liquefied Natural Gas, a trade group for the industry. "We hope it's the start of a groundswell of support."

Critics of exports argue cheap gas prices have helped spur a manufacturing resurgence that is threatened by moves to sell U.S. gas to overseas. Dow Chemical has argued that the government should not allow unlimited gas exports.

The Obama administration, which must approve exports to all but a handful of countries with free trade agreements, is weighing about eight LNG export applications from companies, including Dominion Resources and Southern Co.

The department approved exports from just one project, Cheniere Energy's Sabine Pass terminal. After that approval, the department said it would wait on the results from a study of the economic implications of exports before acting on anymore applications.

While the study was initially due out in March, the department has pushed back its release, saying the report will come out some time this summer.

In their letter to Chu, the lawmakers bemoaned the "stalled" approval process, warning that the United States could fall behind countries like Australia and Canada that are also moving ahead with plans to export gas.

Still, the lawmakers urged the department to carefully monitor market conditions to protect manufacturers' access to affordable natural gas.