RPT-EXCLUSIVE-US LNG group to launch campaign for natgas exports

Mon Oct 22, 2012 7:00am EDT

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* Group to launch web site, outreach to policymakers, public

* Rising US shale gas output has raised prospect of exports

* Opponents say exports could hurt consumers, manufacturers

* DOE has delayed decisions on pending export applications

By Ayesha Rascoe

WASHINGTON, Oct 21 (Reuters) - Backers of liquefied natural gas will launch the first major campaign on Monday to press lawmakers to allow the sale of more U.S. gas abroad, as the industry push for exports intensifies.

The effort by the Center for Liquefied Natural Gas will include a new web site and outreach aimed at policymakers and the public, making the case that selling the nation's surplus natural gas to foreign countries will yield significant economic benefits and not drastically raise prices.

"There is a lot of stranded investment waiting to be unleashed in these projects that would pour billions of dollars into local and national economies, if the regulatory process would be freed up and allowed to move forward," Bill Cooper, the head of the LNG trade group, told Reuters.

President Barack Obama and his Republican challenger for the presidency, Mitt Romney, have both lauded the boom in U.S. shale oil and gas production as a critical component of moving the country toward "energy independence."

But, the winner of the Nov. 6 election will have to contend with concerns about how to manage this newfound energy wealth.

While federal law allows exports of natural gas, the Energy Department has to determine whether expanded exports are in the national interest. Only one export terminal has been approved but decisions on about 10 applications have been delayed till a review on the implications of exports is completed.

Critics have argued the nation's vast gas reserves offer a strategic advantage that should be used to bolster U.S. industry, and exporting gas will hurt manufacturers currently experiencing a resurgence due to cheap energy costs.

While the initiative is not directed at influencing the election campaign, the LNG group hopes it will help to combat calls to limit exports and will speed up the stalled permitting process.

"The markets will react faster and impose limitations upon exports more efficiently than a regulator ever could," Cooper said.

Gas drillers contend that the current low natural gas prices are not sustainable and U.S. gas output will curtailed without exports, as production outpaces demand.

While some lawmakers have weighed in on the debate on gas exports, the isssue has not necessarily risen to prominence on the campaign trail or in Congress yet, with only one hearing on the topic so far.

Initially, some in Congress seemed reluctant to take a strong position on a matter pitting manufacturers against the oil and gas industry.

DE FACTO MORATORIUM?

Natural gas exports to all but a handful of countries with free trade agreements with the United States require approval from the Energy Department.

After allowing gas exports from one project, Cheniere's Sabine Pass terminal, the Obama administration has put off approving any more applications pending the outcome of an economic analysis.

That study, commissioned by the administration to evaluate the potential effects of LNG exports, has been delayed repeatedly and is now expected to be released by the end of the year.

Cooper said the department's delays amount to a de facto moratorium on exports. He said he hopes the new initiative will push the department to issue the study and to move forward on export applications. (Editing by Marguerita Choy)

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