A key US lawmaker who has expressed concerns about America exporting large amounts of liquefied natural gas asked the Obama administration Tuesday to explain exactly what criteria it will use in deciding whether to approve LNG export applications.
Senator Ron Wyden, an Oregon Democrat, asked Energy Secretary Steven Chu to explain the "decision-making criteria" that the Energy Department will use in determining whether to approve all "pending and future applications" to export LNG.
"I request an all-inclusive description of the factors that DOE will consider in determining whether to approve a supplier's authority to export LNG, and what factors DOE will consider in revoking such authority," Wyden wrote in a letter to Chu.
Wyden said DOE should consider a host of factors in deciding whether to approve would-be LNG exports, including the impact they would have on US natural gas supplies and commodity prices. DOE should also consider how LNG exports would affect US air pollution levels, electricity prices, employment, manufacturing and economic growth, Wyden said.
While Wyden did not make this point in his letter, he has expressed serious concerns that large-scale LNG exports raise domestic gas prices and hurt the US economy. This spring, for example, he said the US should impose a "timeout" on approving LNG exports until their effects can be better gauged.
And indeed, a number of entities have looked at the impact that large-scale LNG exports could have on US gas prices, including an analysis by the US Energy Information Administration that found that domestic gas prices could rise by more than 50% if companies are allowed to export large volumes of LNG.
Wyden's views on LNG exports are especially important because he is in line to chair the powerful Senate Energy and Natural Resources Committee if his Democratic Party retains control of the chamber in the November 6 election. The committee's current chairman, New Mexico Senator Jeff Bingaman, is slated to retire at the end of this year.
DOE, for its part, is in the process of studying the impact of LNG exports. Under current law, DOE is supposed to quickly approve applications to export LNG to countries with which the US has formal free trade agreements. But in cases involving non-FTA countries, DOE must determine whether those exports are in the US' "public interest."
Wyden, in his letter to Chu, asked for a full accounting of how DOE will make those decisions.
"It is important to understand the criteria that ... DOE will use to determine whether LNG exports to a non-FTA country are in the public interest," Wyden wrote.
