September 17, 2012 / 9:10 PM / 5 years ago

UPDATE 2-US Energy Dept delays release of LNG export report

3 Min Read

* Report to be completed by end of year

* Likely pushes decision past the U.S. election

* This is a complicated analysis - dept official

By Ayesha Rascoe

WASHINGTON, Sept 17 (Reuters) - The Obama administration on Monday once again delayed release of a report on expanding liquefied natural gas exports, likely pushing beyond the election a decision on the potentially contentious issue of sending U.S. gas abroad.

Commissioned by the Energy Department to examine the economic impact of LNG exports, the report by an unidentified third-party contractor is now expected to be completed by the end of the year.

Any decision on natural gas exports will likely be made by the victor in the Nov. 6 presidential election - either President Barack Obama or his Republican challenger, Mitt Romney.

The department, which has said it will not make any decision on allowing further LNG exports until the analysis is completed, had previously pledged to release the report by late summer.

"The Department of Energy takes its statutory responsibility to make public interest determinations on natural gas export applications very seriously and is committed to taking the time necessary to get the decisions right," the department said in a statement.

It was the second delay of the report, which was initially expected in March.

"This is a complicated economic analysis assessing a dynamic market," a department official said regarding the postponed report. "We'll release the report once it's complete."

Natural gas exports to all but a handful of countries with Free Trade Agreements with the United States require approval from the department.

After years of projections that the United States would increasingly need to rely on foreign sources for natural gas, advances in drilling techniques have led to a boom in shale gas production that has put the country in a position to export excess gas.

But manufacturers and some lawmakers have raised concerns that exports could increase energy costs at home and undercut U.S. industries.

"For members of Congress seeking reelection, LNG exports may be an issue with two wrong sides," ClearView Energy Partners said in research note on Monday.

Support for exports could leave politicians open to accusations of raising natural gas prices, while opposition could lead to charges of failing to support oil and gas jobs, the research note said.

As a compromise, the Obama administration may be considering capping exports at 6 to 7.4 billion cubic feet initially, ClearView said.

The department has approved exports from just one project so far, Cheniere Energy's Sabine Pass terminal.

After that approval, the Obama administration put LNG export applications from companies such as Dominion Resources and Sempra Energy on hold pending the outcome of the economic analysis.

"It certainly does not come as a surprise that the report has been delayed yet again," said Bill Cooper, president of the Center for Liquefied Natural Gas (CLNG), an industry trade group. "However, CLNG is disappointed in the news."

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