US Energy Dept's gas export review process faces scrutiny

Tue May 21, 2013 4:18pm EDT

* Senator Wyden says export process needs closer look

* New Energy Secretary Moniz says committed review of exports

* "All options on table" for export review, Moniz says

By Ayesha Rascoe and Valerie Volcovici

WASHINGTON, May 20 (Reuters) - The U.S. government's review process for liquefied natural gas export proposals needs to be re-evaluated, the head of the Senate Energy and Natural Resources committee said on Tuesday.

U.S. Senator Ron Wyden, a Democrat from Oregon, a skeptic of unlimited gas exports and chairman of the committee, noted the landscape for energy had changed in the United States and the country was now positioned to be a major player in the international gas market.

"I'm not convinced the application process is right for the times," he said at a committee hearing on the potential consequences of LNG exports.

While Wyden called for a fresh look at gas export policy, newly sworn-in Energy Secretary Ernest Moniz signaled he would undertake an in-depth review of the government's export analysis.

Companies have sought permission to send excess U.S. gas abroad from nearly two dozen projects. These exports need Energy Department authorization to be shipped to all but the handful of countries that have free-trade agreements with the United States.

The department approved gas exports on Friday to all countries from the Freeport LNG terminal in Texas, ending a two-year pause in permitting.

A group of heavy industrial companies, though, led by Dow Chemical, have pressed the government to ensure that the amount of exports allowed will not harm manufacturers, who have benefited from the cheap natural gas prices.

Wyden reiterated his support for the decision to greenlight the Freeport project, but said Moniz had promised to review the export process.

Moniz told reporters at an energy efficiency event that he was committed to completing the review, ensuring that current data is being used to make these decisions.

"Right now we have no plans of commissioning new studies but everything is on the table until I have done my analysis," Moniz said, adding that the agency hopes to move quickly.

Moniz, replacing Steven Chu, was sworn in as head of the department on Tuesday. He said that he had played no part in the decision to approve Freeport's export terminal.

60 DAYS FOR APPROVAL

At the Senate forum, the Energy Department's point man on the issue, Christopher Smith, said the Freeport decision was one of the more significant orders the department had produced.

The department held off agreeing to any export applications after it approved those for Cheniere Energy's Sabine Pass terminal in 2011.

Pressed on when the department would act again, Smith repeated that it took 60 days after the end of the comment period on the government-commissioned economic report on exports for the department to issue the order on Freeport.

"Our job is to make sure we are moving as expeditiously as possible," Smith told lawmakers, noting that Moniz would be responsible for future decisions.

Across town, Moniz there were no plans to commission new studies on the impact of LNG exports, "everything is on the table." Moniz said he will have his first briefing as energy secretary on Wednesday.

Tuesday's forum was the second of three that Wyden has scheduled to examine policy issues raised by the U.S. shale gas boom. The final forum is slated for Thursday and will focus on hydraulic fracturing and shale gas production.