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Senators Mary Landrieu (D-LA) and Lisa Murkowski (R-AK) are pushing for an overhaul of how LNG export applications are reviewed in order to prioritize projects that are commercially viable. The top Democrat and Republican on the Senate Energy Committee argue that the Department of Energy’s approach to evaluating export permits doesn’t make sense. Since 2012, DOE has reviewed LNG export applications in the order that they are received. Sens. Landrieu and Murkowski are arguing for a different approach. “Should you go by the way the order is presented or who is most likely not only to get financing but also siting?” Chairman Mary Landrieu spoke to reporters after a Tuesday hearing on the issue. “There are several steps to this process of siting and financing and actually building these terminals.”
Export terminals must also receive permit approvals from the Federal Energy Regulatory Commission, but the FERC process is much more involved than DOE’s. It requires millions of dollars and environmental assessments. Therefore, DOE should reform its process to expedite the applications of projects that have lined up financing and are actually commercially viable, according to a new Brookings proposal authored by David Goldwyn, a former special envoy for international energy affairs at the State Department. Under Goldwyn’s plan, projects that have received FERC approval would jump to the top of the pile for DOE’s consideration. “If you just let projects which have cleared FERC and have a formal FERC application go to the head of the line, you’d be accelerating projects which are not just licenses to market but which are projects which are already commercially mature,” Goldwyn said.
Related Article: US Green Lights 7th LNG Export Project
Meanwhile, President Obama spoke on March 26 in response to EU pressure to accelerate U.S. LNG exports. He said that if the U.S. and the EU can finalize a free-trade deal, LNG exports to Europe would be included in such a deal. “Once we have a trade agreement in place, export licenses for projects — for liquefied natural gas destined to Europe — would be much easier, something that's obviously relevant in today's geopolitical climate,” he said.
By Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com