WASHINGTON, Nov 15 (Reuters) - The U.S. Department of Energy said on Friday it conditionally approved more exports of liquefied natural gas from Freeport LNG in Texas, a move that could lead to increased shipments of the fuel in coming years.
The approval is the fifth by the U.S. government since 2011 to countries with which it does not have a free trade agreement.
Subject to final regulatory approval, the facility is conditionally authorized to export an additional 0.4 billion cubic feet per day (Bcf/d) for a total rate of up to 1.8 Bcf/d, for a period of 20 years, the DOE said.
The agency initially granted Freeport approval to export 1.4 Bcf/d of natural gas a day of LNG from this facility on May 17.
The oil industry’s main trade group, the American Petroleum Institute, welcomed the announcement and urged Energy Secretary Ernest Moniz to approve more projects at a faster pace.
“LNG exports will significantly reduce our trade deficit, grow the economy and support thousands of U.S. jobs,” said Erik Milito, the director of upstream and industry operations at the API.
While the U.S. natural gas boom has led to a long list of applications to export the fuel, the Obama administration is weighing how fast to roll out approvals in order to keep domestic gas prices in check. The last approval, on Sept. 11, was for Dominion Resources Inc in Cove Point Maryland.
Whitney Stanco, an energy policy analyst at Guggenheim Securities, said the announcement was in line with expectations.
She added that President Barack Obama’s nominee to be Assistant Secretary of the section of the DOE that oversees LNG, told a Senate hearing on Thursday the agency had no plans to pause its economic impact studies.
Senator Ron Wyden, the chairman of the Senate energy and natural resources committee, welcomed the news with caution, but praised the energy department for “proceeding in a deliberative manner” and considering applications on a “case-by-case basis.”
“It is imperative these potential exports not have a significant impact on domestic prices for families and manufacturers, and in turn harm America’s energy security, growth and employment,” said Wyden.
Some manufacturers are worried that excessive exports of natural gas could lead to higher fuel bills and make it harder to open new domestic businesses.
“The Department of Energy continues to rely on obsolete data and ill-defined standards to justify continued LNG exports,” said Jennifer Diggins, chairwoman of America’s Energy Advantage, a consortium of manufacturers and commodity producers.
“Unchecked LNG exports will threaten America’s manufacturing renaissance, double or even triple prices for consumers, and negatively impact investment and job creation,” she added.
The National Association of Manufacturers on the other hand praised the decision. “We believe principles of free trade and open markets should govern whether companies can move forward and construct LNG export terminals on U.S. soil,” said Ross Eisenberg, a vice president of energy and resources policy at NAM, in a release.