A lot of LNG projects working through federal review process

Since 2010, of 35 applications it has received that require a public interest review, the U.S. Department of Energy (DOE) has approved three applications to export liquefied natural gas (LNG) and six applications are conditionally approved with final approval contingent on the Federal Energy Regulatory Commission’s issuance of a satisfactory environmental review of each export facility.

That is among the findings in a Government Accountability Office (GAO) report, released on Oct. 1 and asked for by Sen. Lisa Murkowski, R-Alaska, the ranking Republican on the Senate Committee on Energy and Natural Resources. The report only describes the status of the DOE reviews and makes no recommendations about the DOE review process.

DOE considers a range of factors, and consults with a number of agencies, to determine whether each application is in the public interest, the report noted. After the first application was conditionally approved in 2011, DOE commissioned a study to help it determine whether additional LNG exports were in the public interest. Since the 16-month study was published in December 2012, DOE issued seven conditional approvals (one of which became final) and one other final approval.

In August 2014, DOE suspended its practice of issuing conditional approvals. Instead, DOE now reviews applications after FERC completes its environmental review.

Since 2010, FERC has approved three LNG export facilities for construction and operation, including two facilities in 2014, and is reviewing 14 applications. FERC’s review process is, among other things, designed to fulfill its responsibilities under the National Environmental Policy Act (NEPA). Before submitting an application to FERC, applicants must enter an initial stage called pre-filing to identify and resolve potential issues during the earliest stages of a project.

Of the 14 applications, five are in the pre-filing stage at FERC. FERC conducts an environmental and safety review with input from other federal, state and local agencies.

As of mid-September 2014, DOE has granted the three final approvals for applications to export LNG, including the Sabine Pass Liquefaction LLC application in 2012 and the Cameron LNG LLC and Carib Energy (USA) LLC applications in September 2014. Sabine Pass is the only LNG export facility currently under construction in the United States and is expected to begin operations in late 2015.

FERC approved applications to construct the Cameron and Freeport facilities in June and July of 2014, respectively. According to FERC officials, the Cameron facility was given notice to proceed with site preparation activities for its facility in July 2014. LNG exports under the Carib Energy application will not pass through an LNG export facility; instead, LNG will be processed at a natural gas liquefaction and storage facility where it will be loaded into specialized containers and transported by truck to various ports for export on cargo vessels.

DOE’s export approvals, as of late August 2014, amount to 10.56 billion cubic feet of natural gas per day in the form of LNG. For comparison, Qatar, the world’s largest exporter of LNG, exported about 10 billion cubic feet per day in 2012, DOE noted.

FERC’s review of applications to construct LNG export facilities can take two to three years or more. FERC officials told the GAO that these reviews are lengthy because of the complexity of the facilities and number of permits and reviews required by federal and state law. For example, applicants must model the effects of LNG spills from pipes and storage tanks on areas around the facility under a variety of scenarios. One of the applicants GAO spoke with said that the number of variables involved in modeling a single scenario could require up to a week of computer processing.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.