The Sierra Club filed a formal protest to the U.S. Department of Energy (DOE) on Tuesday, challenging a proposal to export billions of cubic feet of domestic natural gas from a facility on Lake Charles in Cameron Parish, LA.
The Sierra Club’s protest challenges natural gas companies’ efforts to secure liquefied natural gas (LNG) export licenses without acknowledging its damaging effects. DOE is currently studying the effects of exporting as much as a fifth of the domestic gas supply, and the Sierra Club calls for similar studies of the public health and environmental damage caused by increased fracking.
The Sierra Club’s challenge contends that the Cameron export proposal would lead to increased air and water pollution in Louisiana and Texas and raise domestic natural gas prices. The filing calls for a full Environmental Impact Statement to study the extent of this proposed facility’s environmental damages before DOE makes any final decisions. Weighing these threats is particularly important because the oil and gas industry currently exploits numerous loopholes and exceptions in federal safeguards, putting the health and safety of Americans at risk.
This filing is the fifth protest the Sierra Club has brought before DOE and other regulatory bodies, opposing LNG export facilities. The other challenges were filed against Cove Point, MD, Sabine Pass, LA, Coos Bay, OR, and Freeport, TX.
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The U.S. Department of Energy granted Sempra a long‐term authorization to export up to the equivalent of 1.7 Bcf/d of natural gas as LNG to FTA countries for 20 years from the proposed Cameron, Louisiana, LNG liquefaction plant.
The ruling paves the way for a second approval allowing Sempra to export LNG to all LNG import nations, with or without U.S. free trade agreements.
Cameron LNG is situated on a 260-acre industrial-zoned site along the Calcasieu Channel in Hackberry, Louisiana. It is located 18 miles from the Gulf of Mexico and within 35 miles of five major interstate pipelines that serve nearly two-thirds of all U.S. natural gas markets.
The $900 million LNG terminal is currently capable of processing up to 1.5 billion cubic feet of natural gas per day.
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Sempra LNG will underpin its 12 million tonnes per annum (mtpa) liquefaction plans for its US Cameron LNG plant with a tolling fee rather than taking title of the natural gas and then offering it to sellers at the facility on a free on board (FOB) basis, a company executive said on Thursday.
“We are settled on the tolling structure and do not envisage changing it down the line,” Octavio Simoes, Sempra’s vice president of commercial development, said.
“It’s more attractive as it doesn’t give us volume or price risk exposure to the US market,” he told ICIS Heren on the sidelines of the World LNG Summit in Rome.
Sempra Energy became the sixth US company, and the fourth in the US Gulf region, to declare its formal intentions to export US natural gas as LNG, having filed a request with US regulators on 10 November.
In the request, the California-based company asked the US Department of Energy (DOE) for consent to send up to 1.7 billion cubic feet (bcf)/day to free-trade-friendly countries for 20 years from the Hackberry, Louisiana, plant.
Sempra said the document was the first in a two-part process, with a request to export to non-free-trade nations to follow.
“The subsequent application to export domestic LNG to non-FTA countries will require an analysis of the public interest, and Cameron LNG will provide additional evidence regarding the public interest as part of that application,” Sempra said in the filing.
Sempra’s export intentions bring the total amount of conceived large-scale natural-gas liquefaction in the lower 48 US states to more than 67mtpa.
The DOE said during a recent US Senate hearing that it would be conducting a pair of studies to deepen its understanding of the market impacts that could come with a large-scale push towards exporting US natural gas as LNG.
The government agency will not approve a non-free-trade agreement request until the studies are concluded, possibly in the first quarter of next year.
Exports not only option
But the Sempra executive said the company could feasibly sell some LNG from Cameron to the developing LNG transport market in the US rather than committing all of the volumes for export.
“Building a liquefaction facility in the US does not necessarily mean that you are committed to exports,” Simoes said. “There is a great arbitrage opportunity offered by the difference in LNG prices and diesel prices in the US.”
Sempra CEO Debra Reed said during a quarterly earnings call on 4 November that the company had received strong interest from “large, credit-worthy counterparties” seeking liquefaction services from Cameron LNG on a long-term contract basis.
Sempra said long-term export authorisation is needed before it can finalise commercial agreements, which will be 20-year deals run in conjunction with the export license.
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