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Natural gas exports: Slow-walk or 'danger zone'?


MATTHEW DALY, Associated Press

WASHINGTON (AP) — The debate over exporting liquefied natural gas is intensifying as the Energy Department considers an array of applications to ship the fuel to Japan, India and other countries where prices are far higher than in the United States.

Some large manufacturers that use natural gas say the department is moving too quickly to approve gas exports, pushing the United States into a "danger zone" that could raise prices and harm the economy. Environmental groups worry that tentative approval of several large export projects may accelerate a fracking boom they say could harm public health and the environment.

Industry groups, meanwhile, say the administration is moving too slowly, with just one of nearly two dozen proposed LNG export terminals given final approval in the past two years. Four other projects have received conditional backing.

"The Department of Energy's slow-walk of LNG export licenses violates our trade obligations" and could cause the U.S. to lose billions of dollars in the global gas market, said Margo Thorning, director of the Act on LNG campaign, an advocacy group that supports gas exports.

"In a perfect world, we'd like to just see them approve all the applications that meet the requirements and let the market figure out which ones are actually going to be built," said Marty Durbin, president and CEO of America's Natural Gas Alliance, an industry group that has pushed for more exports to keep the U.S. competitive in a global market.

If built, the projects already given tentative or final approval would export about 6.7 billion cubic feet of natural gas a day, enough to meet the needs of nearly 70,000 homes for one year. And that is just the beginning. The proposals considered so far represent less than one-quarter of the total amount energy companies are seeking to export.

Energy companies say the U.S. should act now, before other countries such as Russia or Iran approve export projects that could help meet growing energy demands in Asia and other parts of the world.

The push for LNG exports comes amid a boom largely resulting from a drilling technique known as hydraulic fracturing, or fracking, which involves pumping huge volumes of water, sand and chemicals underground to split open rocks to allow oil and gas to flow. Improved technology has allowed energy companies to gain access to huge stores of natural gas underneath states from Wyoming to Pennsylvania but has raised widespread concerns that it might lead to groundwater contamination and even earthquakes.

American oil companies are pushing to export crude oil for the first time since the Arab oil embargo in the early 1970s. Energy Secretary Ernest Moniz suggested at an industry gathering last month that the drilling boom may mean it is time to revisit the ban on crude exports.

President Barack Obama has said he generally supports natural gas exports and predicts the U.S. could become a net gas exporter by 2020. Moniz, who took over as energy secretary last year, has pledged to move "expeditiously" on pending applications to export natural gas.

The Energy Department "understands the significance of this issue — as well as the importance of getting it right," said Paula Gant, deputy assistant energy secretary for oil and natural gas.

The high stakes are illustrated by the conflicting views of U.S. manufacturers.

Most business groups back LNG exports as a way to reduce the nation's trade deficit and support thousands of jobs. But some manufacturers that use natural gas as a raw material or fuel source oppose exports, saying they could drive up domestic prices and increase manufacturing costs.

On the other side, the National Association of Manufacturers said the Obama administration is in danger of violating treaty obligations under the World Trade Organization by restricting exports of coal and natural gas to energy-hungry countries in Asia and Europe.

 

 

 

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