Progress! Feds Approve Natural Gas Export License

May 17, 2013

A liquefied natural gas (LNG) tanker moored in Sodegaura City, Japan. Photographer: Tomohiro Ohsumi/Bloomberg.

The Department of Energy (DOE) approved a license for a Texas facility to export liquefied natural gas (LNG). FuelFix reports:

The Obama administration on Friday gave Freeport LNG approval to broadly export domestically harvested natural gas, marking only the second time a U.S. company has won such a license.

The export license ensures that the Texas-based project will be able to liquefy natural gas to Japan, Taiwan and other countries that do not have free-trade agreements with the United States.

The company still must win approval from the Federal Energy Regulatory Commission to convert its existing Quintana Island, Texas terminal for importing LNG into a facility capable of liquefying natural gas and shipping it overseas.

If additional environmental reviews are completed and the Federal Energy Regulatory Commission (FERC) approves, the facility will be able to export 1.4 billion cubic feet of natural gas daily for the next 20 years.

This is only the second LNG export license to non-free trade agreement counties approved by DOE in the last two years.

Karen Harbert, president and CEO of the U.S. Chamber’s Institute for 21st Century Energy said the decision “represents an important next step in the recognition that America is well positioned to be a global energy leader.“ The United States is “now in a position to become more self-reliant and still be able to export energy resources as market conditions warrant,” she added.

LNG exports will create jobs and improve economic growth in two ways. First, there are the jobs involved in the export of LNG. Second, there are the jobs that will result from more markets for American natural gas. Knowing that customers in Europe and Asia can buy LNG will encourage more investment in energy development in places like Texas and Arkansas. This will mean more jobs on drilling sites and for businesses providing the ancillary goods and services that support them.

DOE released a report last year concluding that LNG exports would be an economic positive. DOE reaffirmed this view in today’s approval saying, “[W]e find that the exports proposed in this Application are likely to yield net economic benefits to the United States.”

DOE’s decision is good news for American energy and exports, but there are other applications awaiting approval. There’s more work to be done.

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