COLUMN-US watchdog has little power to prevent LNG exports: Kemp

Fri Dec 7, 2012 8:38am EST
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By John Kemp

LONDON Dec 7 (Reuters) - The Obama administration will find it almost impossible to refuse permission for more liquefied natural gas (LNG) exports now that a report from outside consultants has concluded unequivocally that exports would be a net benefit to the U.S. economy.

Current law requires the Department of Energy to approve export applications unless it can show they are not in the public interest, which will be hard to do given that a detailed economic study has now concluded the extra revenues from export sales will more than offset the impact of higher domestic gas prices on consumers and energy-consuming businesses.

The department has already approved one application to export up to 16 million tonnes per year (equivalent to 2.2 billion cubic feet per day) from Sabine Pass, a subsidiary of Cheniere Energy. Another 15 applications have been submitted to export an additional 21.5 billion cubic feet per day, 10 times as much as Sabine Pass.

Unless it can show a good reason why these projects are different from Cheniere's, individually or cumulatively, the department cannot block them without being accused of acting in an "arbitrary and capricious" manner and risking judicial review under the Administrative Procedure Act (5 USC 706(2)(A)).


Sabine Pass submitted detailed consultancy reports showing there was more than enough gas as a result of the shale revolution to export 2.2 billion cubic feet per day without impinging on the availability of gas for domestic consumers.   Continued...