UPDATE 2-Senator wants details on US natural gas export rules

Tue Oct 23, 2012 7:26pm EDT

* Energy Department faces decision on natural gas exports

* Wyden to Chu: Explain how rules will be established

By Roberta Rampton

WASHINGTON, Oct 23 (Reuters) - The U.S. Energy Department needs to explain how it will determine whether to allow more exports of the nation's bountiful supplies of natural gas, a top Democrat on the Senate Energy Committee said on Tuesday.

Senator Ron Wyden, who is in line to be the next chairman of the panel if Democrats hold the Senate after the Nov. 6 elections, asked Energy Secretary Steven Chu to explain "the actual decision-making criteria" that will be used to rule on applications to export liquefied natural gas, or LNG.

"I request an all-inclusive description of the factors that DOE will consider in determining whether to approve a supplier's authority to export LNG, and what factors DOE will consider in revoking such authority," Wyden wrote in a letter he sent Chu on Tuesday.

The Energy Department was reviewing Wyden's request, a spokeswoman said, noting the agency would look at a variety of issues when deciding whether export applications are in the public interest.

"Among other factors, those public interest determinations will include both economic and environmental considerations, as well as the impact on domestic natural gas prices and supplies and the impact on economic growth and U.S. industries," Jen Stutsman said in a n emailed statement.

The United States has been flooded with natural gas because of horizontal drilling and hydraulic fracturing, or "fracking," technology that has helped drillers tap supplies trapped in shale rock formations.

Some companies want to export the surplus, which they say would help stabilize prices for producers without unduly raising prices for consumers.

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

So far, the government has approved exports from one project, Cheniere's Sabine Pass terminal, a 2 billion cubic feet per day project located in western Cameron Parish, Louisiana.

The department has put off decisions on other applications pending a study it commissioned to evaluate the economic impact of LNG exports, now expected to be released by the end of the year.

Wyden said the DOE should explain how it will consider the impact of exports on domestic supplies and prices, electricity prices, jobs and manufacturing, the economy and air pollution.