By Ayesha Rascoe and Timothy Gardner
WASHINGTON Feb 11 The U.S. Energy Department on
Tuesday approved exports from Sempra Energy's Cameron
liquefied natural gas (LNG) project in Louisiana as the Obama
administration moves forward with its goal of expanding the
global market for the fuel.
The conditional approval of exports from the terminal to
countries with which the United States does not have free trade
agreements, such as India and Japan, was the sixth approval by
the department since 2011, and the first since mid-November.
Cameron's application to export up to 1.7 billion cubic feet
per day brings total U.S. authorized LNG exports to almost 8.5
bcf feet per day, once the terminals are constructed and working
at full capacity.
Sempra shares jumped on news the approval was expected, and
in early afternoon trading were up 1.2 percent at $93.74.
The latest export approval confirms that the review process
is becoming "largely depoliticized," said Leslie Palti-Guzman, a
gas analyst for the Eurasia Group. The consulting firm predicted
that permitting would "continue unabated through 2014."
But some analysts cautioned that a pause in approvals could
still be near as licensed export volumes near the threshold of
12 bcf a day considered in DOE-commissioned studies by the
Energy Information Administration and NERA Economic Consulting.
"We think a cautious agency may be unlikely to exceed the
upper-bound of the range of studied outcomes," ClearView Energy
Partners said in a research note.
TOO FAST OR TOO SLOW?
U.S. natural gas production has soared to record levels in
recent years because of advanced drilling techniques, including
hydraulic fracturing, or fracking. The surge in output unleashed
a flood of applications to ship excess U.S. gas overseas, where
it can fetch higher prices.
After a nearly two-year pause in its review while studying
the potential impact of exports on the domestic market, the
administration resumed the permitting process in 2013.
Since then the gap between decisions on applications has
been as much as three months or as little as five weeks. That
uneven pace of approvals has frustrated both supporters and
opponents of the LNG export push.
Republican lawmakers, along with Democrats representing oil
and gas producing states, have pressed for much quicker
processing of the more than 20 applications that remain in the
Republicans in the House of Representatives said last week
that if significant progress is not made this year, they would
look at crafting legislation to speed up review.
An Energy Department official on Tuesday defended the
agency's approach to LNG exports.
"We are doing the best we can to address these in a timely
fashion," Paula Gant, deputy assistant secretary of energy for
oil and natural gas, said at a conference for utility officials
in Washington D.C.
Calling the Cameron approval "long overdue," incoming Senate
Energy Committee chairwoman Mary Landrieu said the terminal
would allow her state of Louisiana to "compete with foreign
companies in the battle for the huge international LNG market."
Landrieu's support for LNG exports differs from her
predecessor at the helm of the energy committee, Ron Wyden of
Oregon, who has been much more cautious on the export issue.
Wyden, who this week will become chairman of the Senate
Finance Committee, has been concerned that unfettered gas
exports could increase fuel prices for Americans.
A group of industrial companies, led by Dow Chemical, has
also called for the administration to slow down on export
approvals to ensure that manufacturers who have benefited from
cheap gas are not hurt by possible price spikes.
America's Energy Advantage, the industry coalition formed by
Dow and its allies, has pointed to propane shortages this winter
as an example of what could happen with natural gas supplies if
unlimited exports are allowed.
U.S. law allows mostly unrestricted international trade
propane and refined oil products, such as gasoline.