Time for DOE to follow the law and approve LNG export projects

DOE essentially imposed a moratorium on application approvals while it conducted a year-long review, which concluded in December 2012 that exports would provide widespread economic benefits. Despite the clear economic gains for the U.S. economy predicted by countless third party studies, including DOE’s own commissioned study by NERA Consulting, and growing bipartisan support of lawmakers, only two out of over 20 projects in a queue with DOE have been approved.

This is concerning for a number of reasons. For starters, the global LNG market is uniquely primed for the United States to benefit. We have a wealth of natural gas resources on hand, a robust regulatory structure already in place and a number of established energy producers vying to move forward with the process of exporting. This opportunity – with the same rewards, at the same level – will not last forever. Continued delay will mean passing up the ability to create thousands of much-needed jobs, millions of dollars of revenue for state and local governments and supply our trading partners with a clean and affordable fuel source.

Incredibly, these procedural delays, which are literally slowing the process of “bringing wealth into the country,” as former Energy Secretary Steven Chu once characterized exports, do not follow the letter of the law. Instead, the process for reviewing and approving LNG exports has been marked by shifting goal posts.

The very creation of a “queue” of applications is an amendment to public rules established by DOE (Title 10 Code of Federal Regulations Part 590). Any changes to the rules are subject to the same notice and comment requirements as the original rules. Not only was the establishment of the queue never published in the Federal Register, but it was not applied until December 2012, after 15 applications had already been filed with the Energy Department. Since an amendment cannot legally be applied retroactively, the queue is unlawful as applied to the previously filed applications.

What the law actually dictates is that after an application is filed with DOE, the department is required to publish a notice in the Federal Register, providing at least 30 days for public comments or protests. Under a Congressional mandate in the Natural Gas Act, there is a rebuttable presumption that proposed natural gas exports are in the public interest. Unless those who oppose an application can successfully show that a project is not in the public interest, the application must be approved and should be shortly after the close of the comment period.

An applicant has a reasonable expectation that after filing with DOE, paying a fee and being given a set of deadlines, the rules will not be arbitrarily changed after the fact by agency decree. More importantly, the American people deserve to know that their government agencies are following the letter of the law.

DOE is quick to say its decision on pending export projects will be driven by facts, not politics. The facts are these: Each LNG export project represents a multi-billion dollar investment in the United States. According to the U.S. International Trade Administration, each $1 billion of exports could result in 5,555 new jobs, meaning that $13 billion to $25 billion of exported LNG will provide between 70,000 and 140,000 jobs for our workforce. And, there will be little to no impact on natural gas prices to consumers.

The United States is blessed with an abundant supply of natural gas.  We are in the fortunate position of being able to both meet domestic demand and export some without undermining our consumers or industries here at home. A recent estimate from the Potential Gas Committee finds our reserves to be at 2,384 trillion cubic feet (Tcf), while ICF Resources has stated our resource base represents over 150 years of current annual consumption.

With all the mechanisms in place for the United States to harness its resources and access the economic benefits LNG exports stand to bring, it’s time to stop delaying, follow the law and process the pending export applications. The economy needs it, and the law demands it.

Cooper is president of the Center for Liquefied Natural Gas.