DOE approves natural gas export terminal

Getty Images

The Energy Department on Monday gave its conditional approval for a new facility in Oregon to liquefy and export natural gas, as Democrats and Republicans clamor to break Russia President Vladimir Putin’s energy stranglehold on Europe.

The Jordan Cove terminal is the sixth plant to receive the green light from the administration in the last year and the seventh overall, but neither supporters nor opponents of expanded natural-gas exports believe this means the Obama administration is committed to faster approvals.

ADVERTISEMENT
The facility still must pass regulatory and environmental reviews before it can be built.

“It’s not really a shift in policy, if for no other reason than we don’t really think there’s been a coherent policy to begin with,” said Chester Carson, a spokesman for Sen. Lisa Murkowski (R-Alaska), the ranking member of the Senate Energy and Natural Resources Committee.

“I think the DOE is still applying the same level of rigor to these,” said Nathan Matthews, a staff attorney at the Sierra Club.

Supporters of exporting U.S. natural gas argue it would both help the U.S. economy and counter Russia’s use of its energy resources as an economic weapon against Europe.

But environmental groups have warned it could lead to an increase in hydraulic fracturing, or “fracking,” a controversial mining methodology they say increases global warming and pollution.

Matthews’s group wants the DOE to be more rigorous with reviews, and to complete environmental assessments before issuing conditional approvals, instead of waiting until a later stage in the process.

There’s no doubt the push to increase exports of U.S. natural gas has gained steam from the crisis in Ukraine.

Republicans and some Democrats have urged President Obama to expedite approvals in recent weeks to support U.S. allies in Eastern Europe, which must largely rely on Russia for energy.

Speaker John Boehner (R-Ohio) on Monday said the administration’s decision was a good step, but was not enough.

“This is welcome news for those opposed to Russia’s aggression, but the approval of one application — which has been waiting two years — does not suggest that the president has adopted a new approach,” Boehner said in a statement. “Many more long-delayed proposals to export U.S. natural gas remain in limbo, and they must be approved if we’re going to weaken Russia’s dominance in many foreign energy markets.”

Another argument against increasing exports has been the idea that it would increase low U.S. prices for natural gas.

Sen. Ed Markey (D-Mass.) on Monday pointed to a report commissioned by the Energy Department in 2012 that warned exporting more than 4.4 trillion cubic feet of natural gas a year could increase domestic prices by more than 50 percent. With the Jordan Point project, exports would reach 4.7 trillion cubic feet per year.

“There can be no doubt that we have crossed a line into an era when we could be massively exporting America’s natural gas, sending the jobs and consumer benefits abroad along with the fuel,” Markey said in a statement. “The level of exports approved is now more than every single American home consumes, and it could impose up to a $62 billion de facto tax on American households and businesses.”

Users of natural gas voiced similar concerns.

“This marks the seventh consecutive approval that will allow the export of more than 13 percent of domestically produced natural gas,” America’s Energy Advantage, which represents manufacturers and commodity producers including Dow Chemical, said in a statement.

The group also said the latest approval shows the administration is committed to pushing more exports of natural gas.

“America’s Energy Advantage strongly disagrees with this policy, but it is unarguable that the U.S. is now fully committed to exporting large volumes of this strategic commodity to our overseas competitors,” it said.

Leslie Palti-Guzman, an analyst at the Eurasia Group, said the recent pattern of export approvals every two or three months do not necessarily mean the Obama administration is listening to those who want approvals to be expedited.

Assuming Veresen Inc., the owner of the Jordan Point project, gets the remaining federal, state and local approvals, it will break ground on the project in about a year, and will be able to export gas by 2019 at the earliest, said Michael Hinrichs, a spokesman for the project.

But even when it starts exporting, the Jordan Point terminal won’t have much of an impact on Eastern Europe.

“We’re looking primarily at Asia-Pacific,” Hinrichs said. “Now, from a global standpoint, does Jordan Cove play a role in them being able to open up other projects in the Gulf coast to them being about to ship to Eastern Europe? Yeah, that’s how I look at it.”