How quickly will the Department of Energy act on liquefied natural gas export facility approvals this year? During today's OnPoint, Bill Cooper, president of the Center for Liquefied Natural Gas, explains why he believes DOE's process for approving LNG export facilities is impeded by procedural delays and talks about how the process can be clarified. He also discusses the impact Energy Secretary Ernest Moniz will have on the timing of export facility approvals.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Bill Cooper, president of the Center for Liquefied Natural Gas. Bill, it's nice to have you back on the show.
Bill Cooper: Thanks for having me. I appreciate it.
Monica Trauzzi: Bill, lots of talk in Congress and in the agencies right now about the future of LNG exports in the United States. Why do you believe the DOE process for approving LNG export facilities is being bogged down by procedural delays?
Bill Cooper: Well, I think DOE's operating out of an abundance of caution, trying to be certain that they do the right thing, trying to decide what the cumulative impacts of all these exports are going to be. Our concern is that any agency can't replace good intentions with following their promulgated rules, and if they would follow the promulgated rules, then we think these decisions would have been made a long time ago.
Monica Trauzzi: And Senate Energy has actually taken up this issue, and in one of the hearings that they held, there was some talk about conflicting criteria. Do you believe that there's conflicting criteria in the process?
Bill Cooper: The criteria is not a concern for us, because when you look at the criteria that DOE has put forth, both in its promulgated rules and the decisions that it's made, the primary criteria is what is the domestic need for this gas that an applicant proposes to export, and all other criteria seem to flow from that basic concept. So we really don't have a problem with that. Our concern is that the pace is moving so slowly that we're going to lose billions of dollars of potential investment into the United States that may actually go elsewhere.
Monica Trauzzi: So then are there any changes or clarity that you would seek from DOE on the process? Or is the process okay as is, and they should move forward with the process as is?
Bill Cooper: I think the regulatory framework is good. I think when DOE takes action on an application, as we have seen in the Sabine Pass decision and the Freeport decision, I think is very well-reasoned, very well-analyzed and supported, and therefore, we don't have any issues with DOE when they make the decision. Our concern is the delays in making the decision.
Monica Trauzzi: We have heard some folks question the legality of the process. Is your group concerned at all on that front?
Bill Cooper: We are. Part of my testimony before the Energy and Commerce Committee's Subcommittee on Energy and Power was just that. The promulgated rules that DOE has, that appear in the Code of Federal Regulation, should be the guideposts that DOE uses in processing these applications, and to add additional criteria by agency decree would seem to violate the Administrative Procedures Act and their own rules, and therefore, never really brings a close to the administrative process, and that's a concern of ours.
Monica Trauzzi: So does that then mean that we'll see lawsuits against DOE?
Bill Cooper: I have no idea. Certainly CLNG nor any of its members would propose any type of litigation. Our concern is we just want to make the agency aware of our concern so that more procedural hurdles aren't instituted or implemented that would cause further delays.
Monica Trauzzi: So you've talked about the pace of things. Secretary Moniz recently indicated he would issue a number of decisions on LNG export facilities by the end of the year. The President has also said that the U.S. will probably be a net exporter of natural gas in the next three or four years. Don't all signs seem to be pointing to the idea that the administration and certainly under Secretary Moniz, things will move expeditiously on LNG?
Bill Cooper: We certainly hope so. Expeditiously is a term that we hear frequently. However, the time period from the Sabine Pass decision to the Freeport decision was almost two years to the date. And so we are hopeful that the next decision will roll out far more quickly than that. So we're hopeful.
Monica Trauzzi: Have you seen any indication from the administration that that wouldn't be the case? That things wouldn't move quickly?
Bill Cooper: Other than the pace that we have observed, no. I think all the language is indicating quick decisions, and we're hopeful for that. We'll soon be 60 days from the Freeport decision, so we would hope to see one come forth about that time. And if it doesn't, then we'll have some concerns about what's being said versus what's actually occurring.
Monica Trauzzi: So then going back to what Secretary Moniz said specifically, that a number of decisions would be made by the end of the year, how many facilities would you expect to see approval on by the end of the year?
Bill Cooper: Well, I can't predict what the Secretary is going to do with the pending applications, but I can look to its promulgated rules and say that at the end of the comment periods for each of these applications, the evidentiary record is supposed to close so that the case would be ripe for DOE to take action. Under those circumstances, just about every application now pending would be ready for a decision, and that's what we'd like to see happen.
Monica Trauzzi: What's your take specifically on Secretary Moniz's commitment to LNG exports?
Bill Cooper: Well, by all appearances, it seems that he is committed to move the process along. I mean, he hasn't been in office all that long, and I guess it takes a while to get your people in place and to sort out all the issues that come up with a newly minted secretary. So we're hopeful that he'll seize this issue and move it along.
Monica Trauzzi: In the context of President Obama's climate announcement last month, are there any signals that there may be some sort of action on LNG exports stemming from that specifically?
Bill Cooper: I don't see that. I think the President's announcement on climate change really addresses the need to use more natural gas versus other fossil-burning fuels that may emit more pollutants. However, I don't think that that's an implication that LNG exports would come to the forefront any more than it would otherwise.
Monica Trauzzi: All right, Bill. We'll end it right there. Thank you for coming on the show. Nice to see you.
Bill Cooper: Thank you. Appreciate it.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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