White House Supportive Of U.S. LNG exports, Aide Says

July 2012, Vol. 239 No. 7

The Obama administration supports in principle U.S. exports of liquefied natural gas, though specific new guidelines on exports await completion of a study by the Department of Energy, President Obama’s top energy aide said last month, in a story reported by Platts.

“Some amount of LNG export makes sense, from our perspective, and I think you’ll see policies to support that,” Heather Zichal, a deputy assistant to the president for energy and climate change, told the Natural Gas Roundtable in Washington.

“As a general rule of principle, the administration is not opposed to LNG exports,” she said.

DOE is required by law to quickly approve LNG export applications to countries with which the U.S. has free-trade agreements, which constitute the bulk of the requests that are currently pending before the agency.

But DOE is delaying decisions on LNG exports to non-FTA countries – including China – until it completes the second of two studies on the domestic impacts of those would-be exports.

The prospect of large-scale exports of LNG has drawn opposition from some large industrial users of gas and members of Congress, who say such flows would drive up the cost of domestic gas for U.S. residents and businesses, hurting the economy and jeopardizing America’s long-term energy security.

Earlier in June, Marvin Odum, president of Shell Oil, said the debate in Washington over LNG exports makes the U.S. a less attractive export site than Canada, which has adopted policies promoting such activities.

“There’s a lot of uncertainty there,” Odum said at a Canadian American Business Council meeting in Washington on June 7. “The U.S. hasn’t made a real strategic decision about which way it wants to go.”

Separately, Zichal said the Bureau of Land Management would soon give the public more time to comment on a controversial proposal to regulate hydraulic fracturing for oil and gas wells on federal and Indian lands.

“We focus very much on the need to get these rules right,” she said.

A recent industry-funded study said the BLM proposal would cost producers as much as $1.6 billion annually.

The Western Energy Alliance, an organization representing producers, asked BLM to reconsider the proposal and give the public 90 more days to comment on it.