Exporting natural gas just got easier.
This afternoon, the Department of Energy approved the second application for a facility to export liquefied natural gas (LNG) worldwide. Today’s approval to export up to 1.4 billion cubic feet of natural gas per day goes to Freeport LNG Expansion, on Quintana Island in Texas, for 25 years. The approval process now moves to the Federal Energy Regulatory Commissions (FERC), so the company is not in the clear yet.
Several companies have received nearly two dozen permits from DoE to export LNG to countries with which the U.S. has a free trade agreement (FTA), but the approval process has been much slower for permits to export to non-FTA countries. 19 facilities that want to export LNG to non-FTA countries are still under review by the Energy Department — including a joint project between ExxonMobil and Qatar Petroleum.
The natural gas industry is booming in the United States, largely due to the practice of fracking, which opened up large parts of the country to extraction previously thought uneconomical to drill. Natural gas can be transported via pipeline across land, but when companies want to export the fuel overseas, they have to use ships. Since natural gas (mostly methane) in gas form would require a large ship to transport, it must be cooled and liquefied before it can be exported across an ocean.
In the last decade, companies built facilities to import natural gas because the U.S. expected lower production than what fracking actually allowed. Once the shale gas boom sharply increased domestic production, they have tried to turn those import terminals into export terminals. Cheniere Energy’s Sabine Pass terminal, the first facility to receive DoE approval to export to non-FTA countries, is one example of this.
The reason for the delay of such applications is due to opposition largely from the chemical industry, which fears that exports will lead to an increase in the price of natural gas (which it uses for industrial purposes), and those who care about carbon emissions and the environment, who point out that the U.S. still does not know the consequences that exports will have on carbon emissions.
Congressman Ed Markey, running for John Kerry’s old senate seat in Massachusetts, said today that “The Department of Energy still doesn’t even know what the impact of natural gas exports will be on domestic businesses and consumers, but they are approving more exports anyway.”
If the U.S. is increasing exports, it becomes even more critical to ensure that the natural gas obtained through hydraulic fracturing is as safe as possible, with zero fugitive emissions. Yesterday the Interior Department released draft fracking rules, and there are some easy ways (5 in fact) to make the rules adequately protect Americans and reduce greenhouse gas emissions. It is one thing to argue for weak safeguards to give Americans access to “cheap energy” — it is another to argue for weak rules that poison the air and water to export the energy to other countries.
The net climate effects of LNG exports depend largely on the energy currently used by the importing country — what the gas will replace. Coal-heavy economies that replace their coal with natural gas should see lower emissions, but this transition could threaten more valuable transitions to renewable energy.
The Energy Department said in today’s approval that “the exports proposed in this Application are likely to yield net economic benefits to the United States.” Left unsaid is the fact that the more fossil fuels left in the ground, the easier it is to reduce greenhouse gas emissions, which would benefit the economy in myriad ways.
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