A recent study highlighting the net economic benefits of US liquefied natural gas exports is not the final word on whether to approve pending export applications, according to a top official at the US Department of Energy.
“One thing to emphasize is that the department has not outsourced this decision making process,” Christopher Smith, deputy assistant secretary at DOE’s Office of Oil and Gas, told state regulators Monday.
“That is a process that is still managed by the DOE, and the secretary of energy has the ultimate responsibility for making that decision,” Smith said at a meeting of the National Association of Regulatory Utility Commissioners in Washington.
DOE recently collected the first round of comments on a study conducted by NERA Economic Consulting that found the broad economic benefits of LNG exports would outweigh domestic price hikes and other negative consumer impacts.
The study was the second of two LNG reports commissioned by DOE. The first, conducted by DOE’s Energy Information Administration, found that US LNG exports could increase domestic wellhead gas prices by up to 54% by 2018, depending on factors such as the volume exported and the rate of domestic gas production.
“We will be considering the study that was done by NERA … we will be considering the results of the EIA study that was done last year and we will be considering all of the comments as part of a package to help us understand what is the totality of issues,” Smith said.
But DOE will have the final word on whether to approve more LNG exports to countries that do not have free trade agreements with the US, he said.
The law requires DOE to quickly approve applications to ship gas to countries that have FTAs with the US. However, the department can limit or block exports to non-FTA nations if it finds exports are not in the public interest. So far, only Cheniere Energy’s Sabine Pass terminal in Louisiana has won approval to export to both FTA and non-FTA countries.
Whatever DOE decides to do about exports, it will be significant, Smith said.
“It is hard to overestimate the importance of this as a public policy decision. It is a tremendously important moment for the United States,” he said. “The overall philosophy here is measure twice, cut once; make sure we are doing the right thing up front and that the public policy decisions that come out of this process are ones that will withstand scrutiny.”