Freeport LNG Terminal Gets DOE Approval to Export

May 21, 2013 08:19 AM

Liquefied natural gas exports got a boost from the Obama Administration on Friday when it was reported that the Freeport LNG terminal -- operated by ConocoPhillips -- was the first terminal in two years approved to export LNG to non-Free Trade Agreement nations. Prior to that, only Cheniere Energy's Sabine Pass Terminal was approved for such exports, obtaining approval in early 2011.

The list of applicants for non-FTA LNG exports is long, but regulators are moving forward cautiously as committing too much natural gas to export threatens to diminish the national supply and raise natural gas pricing in the United States. Countries who participate in Free Trade Agreements are all approved for export of LNG, but in this case, the application required approval directly from the U.S. Department of Energy.

The move is expected to encourage production, or at least slow the high rate of in-field burn-off at fracking sites. Either way, the fresh demand will be regulated by the DOE to ensure production keeps pace with America's domestic natural gas needs.

Fracking has been under criticism since its advent and opponents of the practice worry over the potential environmental impact. But advances in fueling fracking rigs and an industry that wants to stay in business combine to produce low-cost natural gas with minimal environmental disturbance. EPA recently released study results that show methane and CO2 emissions from fracking are dramatically less than was once thought.

New markets overseas will encourage production of natural gas, stabilize pricing and offer an outlet for U.S. shale gas.


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