U.S. proposes major change to LNG export decision-making process


The Obama administration announces a major overhaul of its review process for approving U.S. liquefied natural gas exports

Under the proposal, the Department of Energy would no longer issue conditional approvals of projects; instead, the DoE would decide whether an LNG export project is in the national interest only after the FERC had issued a final environmental review.

The change to the export process aims to help expedite reviews by focusing only on most commercially viable projects that have finished the FERC process.

Related stocks: LNG, CQH, GLNG, SRE, GTLS, TGP, D, GMLP, GLOG, CQP, GLOP, DLNG.

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Comments (21)
  • smurf
    , contributor
    Comments (6272) | Send Message
     
    Is this good or bad? Don't want to have my usual knee-jerk negative reaction to just about anything this admn. does.
    29 May 2014, 03:47 PM Reply Like
  • tommm
    , contributor
    Comments (24) | Send Message
     
    Better delete both depts. of energy and epa, among others, and let 'em get out
    of the way of doing business for business' sake....
    29 May 2014, 03:49 PM Reply Like
  • rickman393@att.net
    , contributor
    Comment (1) | Send Message
     
    Apparently this is to slow down the overheated economy by extending the approval process.
    29 May 2014, 04:06 PM Reply Like
  • bleeding me
    , contributor
    Comments (68) | Send Message
     
    LOL
    29 May 2014, 05:55 PM Reply Like
  • Mike Maher
    , contributor
    Comments (2863) | Send Message
     
    "Applying for a FERC license, required before construction can start on a project, can cost as much as $100 million. Filing an application for a DOE permit costs about $20,000."

     

    A FERC license to build an export terminal costs $100 million?!?! And people wonder why the country is having so much trouble creating jobs. That's criminal.
    29 May 2014, 04:18 PM Reply Like
  • bleeding me
    , contributor
    Comments (68) | Send Message
     
    That's liberalism, and the f-ing tree huggers.
    29 May 2014, 05:54 PM Reply Like
  • jolacious
    , contributor
    Comments (105) | Send Message
     
    As a non-US Citizen, I selfishly think this is a win win for LNG. Reflecting in the substantial rise today. Could you please elucidate MM? As always many thanks.
    29 May 2014, 04:48 PM Reply Like
  • ThaiGhai
    , contributor
    Comments (10) | Send Message
     
    Any time the Obama Administration utters the words "help expedite reviews" you can bet that exactly the opposite of "expedite" will be the result.

     

    FERC is a fiscal and process nightmare for the energy industry; keep their fingers out of the pie!

     

    Bottom line...this is another knee-jerk reaction and a publicity stunt in response to the embarrassing situation in which this current administration finds itself because of the now infamous "re-set" with the Russians (think Putin out-maneuvers Obama/Clinton).

     

    This is not meant to be a political statement; simply a pragmatic assessment of the philosophy and current leadership (or lack thereof) in the Executive Branch of the U.S. Federal Government.

     

    I do not believe this proposed shift in the approval process will have any material affect on the LNG sector (emphasis on "proposed").
    29 May 2014, 05:57 PM Reply Like
  • ephud
    , contributor
    Comments (4387) | Send Message
     
    I found it hard to understand why an expedited approval process would cause LNG's share price to leap like it did today. After all, why would enabling the competition be a good thing? Then I realized the announcement was in Liberal Speak where expedite means cripple.
    29 May 2014, 07:43 PM Reply Like
  • njsteve59
    , contributor
    Comments (16) | Send Message
     
    Folks...
    Don't invest on your ideology. Expedite means expedite, or at the very least it doesn't mean slow down. The economy is improving (though slower than we would like) and the market overall reflects that.

     

    Full disclosure...I am long LNG, CQP, TGP based on this thesis that has been staring us all in the face since THIS administration expedited the approval process on the Sabine Pass liquefaction terminal.
    29 May 2014, 08:43 PM Reply Like
  • ephud
    , contributor
    Comments (4387) | Send Message
     
    njsteve

     

    If expedite means expedite, then why would LNG's share price leap when their competition is enabled?
    29 May 2014, 08:46 PM Reply Like
  • njsteve59
    , contributor
    Comments (16) | Send Message
     
    I actually agree with that,Ephud. Expedite means more competition for Cheniere sooner. I don't think the market is digging as deep as you are, though LNG still has a three year head start.

     

    Consider Energy Transfer's Lake Charles facility, almost completely through the approval process, with production targeted to commence in 2018.
    30 May 2014, 07:54 AM Reply Like
  • mapodga
    , contributor
    Comments (7581) | Send Message
     
    This US internal competition for export is not especially important.

     

    There are other competitors that should be beaten . From Quatar, Australia, Papua, Angola, ... Market of LNG is strong on supply side and prices on producer side would go down and there will be serious fight for markets.
    31 May 2014, 04:02 AM Reply Like
  • ThaiGhai
    , contributor
    Comments (10) | Send Message
     
    The "expediting" of Sabine Pass was political theater to assist a beleaguered U.S. Senate colleague of the Administration.

     

    The approval of Sabine Pass was a done deal before it was "expedited." It would have been absurd to jettison the project, in that location, based on any rational analysis, including environmental impact(s).

     

    This Administration is not a friend of the energy sector, including LNG, by any sense of imagination.

     

    My sense is that pragmatics associated with supply/demand will prevail despite partisan political maneuvers, therefore:(Disclosure) I am long the LNG Sector.
    29 May 2014, 09:26 PM Reply Like
  • mapodga
    , contributor
    Comments (7581) | Send Message
     
    :) for sure demand/supply is prevailing, this is why the export from US is practically blocked and you should NOT BE LONG with US LNG industry and LNG shipping companies.

     

    To preserve own cheap supply and help other US industry, US is blocking export. It is kind of US state Aid for other US industries, that nobody can prove them, because the thing is run in this cunning way.

     

    Otherwise can you imagine - nation that went to moon in few years, need decade just to put papers in orders for few facilities.
    31 May 2014, 03:57 AM Reply Like
  • Alex Belkin
    , contributor
    Comments (3) | Send Message
     
    For someone sitting in Moscow it seems that this Administration will have to befriend the energy sector, especially LNG, if it is serious about keeping pressure on Russia by providing Europe with an alternative to Russian gas. So at least the intention must be to expedite. On the other hand, "conditional approvals" ahead of FERC review may be misinterpreted as pushing them into an approval.
    30 May 2014, 04:42 AM Reply Like
  • ThaiGhai
    , contributor
    Comments (10) | Send Message
     
    I'm not sure that this Administration knows how to be serious about anything.

     

    First you have to have an understanding of the geopolitical landscape, then an agenda...an economic and foreign policy that is lucid...before you can get serious.

     

    Market forces will prevail despite their current ineptitude.
    30 May 2014, 08:13 AM Reply Like
  • jaxhawk
    , contributor
    Comments (9) | Send Message
     
    I'm paying almost $4 a gallon of gas. That is why I own pipelines. Has anyone ever hugged a barrel of oil. ;-)
    30 May 2014, 08:40 AM Reply Like
  • mapodga
    , contributor
    Comments (7581) | Send Message
     
    This expedite US export of LNG or not?!?

     

    This news as I understand in practice won't mean anything and is only hot air. It is probably just for PR usage, so all this jumps in LNG sector are without any bases.
    As far the export from US could be concerned as we outsiders can understand there are at least 2 other prevailing goals that stop/block US export.
    1. If US would allow export the price of gas in US would go up and have substantial influence on competitiveness of wide array of industries in US that is using NG. Not to mention that ordinary citizen would pay more and this is not good for elections.
    2. It is old US policy that preserve US reserve for own strategic usage. It is bipartisan decision.
    So in the end of the day US actually newer meant seriously with its LNG export project. It is probably aimed to drop the world prices of oil because US is big importer.
    In anyway I think that from the cost perspective this LNG transport can't beat pipeline prices in Europe on the extent that pipelines are built. It can compete with Quatar in countries like Spain, GB that primarily depend on LNG but for the rest Russsians can provide substantial cheaper alternatives.
    Furthermore as it is seen lately also in Asia won't be easy to work with profit since part of them goes back to nuclear, part goes to Russian pipeline (with dumping prices) and for the rest there will be strong competition from wide array of supplier.
    i'm very bearish on US exporter of LNG and especially to this with big investment of cargo ships for LNG that work with big leverages and don't have market (especially GLNG and GMLP, drop of prices will also influence TGP and GLOG).
    31 May 2014, 03:49 AM Reply Like
  • jaweid
    , contributor
    Comments (166) | Send Message
     
    Ephud et al,

     

    What part of the administration announcement ("expedite") do you NOT understand?? Your comments speak volumes about your lack of comprehension of the LNG business model viz a viz US energy resources realignment. Let me attempt to demystify in simplest words.

     

    Fact 1 -- US NG price HH today is around US$ 4.70 / MmBtu -- in Europe & Japan the biggest import markets for NG / LNG it ranges US$ 13.50 to 17. There is a huge price differential begging to be commercialized for benefit of US economy.

     

    Fact 2 -- US pipeline networks were completely not aligned for export business -- these were all coast-to-inland pipelines. The lack of such pipelines is what was bottling up gas in the production pockets and vicinity. Last 4 years there has been tremendous investment to realign pipelines going inland-to-coast. The efforts by the likes of EPD, KMI, EEP etc etc are still ongoing -- US$ Bns of investment which has spurred growth, jobs and some very high paying ones, secondary consumption etc.

     

    Fact 3 -- US was also lacking liquefaction facilities to handle the potential export bonanza. Even Cheniere (LNG / CQP) was finally permitted about 3 years back and their first train is expected to be commercialized by early 2016 -- that is how long it takes to build new LNG facilities. Then Freeport got permission in 2013. At least a dozen more applications are doing the rounds of approvals -- which is frustrating to the industry -- which in turn is keeping the price of NG <$5. Now this shortening of process may help some of these projects to also get approved.

     

    Fact 4 -- Yes when these facilities happen to get commercialized, the domestic price of NG will start to move up and realign globally (which is now out of whack). YES that will mean higher NG prices to domestic consumers. BUT that is true of every other commodity being traded globally. That is liberal economics a'la Adam Smith to Ricardo to Marshall to Milton Friedman, Rand Paul and every other blue-eyed conservative economist in between and current. So why blame Obama & current administration for doing what is good for American economy in the longer run. His administration will not live to see the fruition of these policies in
    any case (except Cheniere, should that be on time and schedule in early 2016)!!

     

    Fact 4 -- The FERC process will have to get completed in any case for any new energy project -- with or without prior DOE nod to the project. So by putting FERC approval at front end will obviously shorten / expedite the process -- irrespective of the cost of approvals process!(which this announcement will not affect an iota).

     

    Fact 5 -- Given knowledge of all these ground reality factotums, is it still surprising to see LNG scrips jump forward??? This means 'great' for the liquefaction plants, the equipment manufacturers, the NG pipeline cos, the LNG carriers, the LNG terminal cos, the LNG storage cos -- the whole hydrocarbon supply chain.

     

    Now where is liberalism or conservatism to be blamed? I wonder why very sane people allow ideologies & psuedo-philosophy to cloud their simple investment logic and rationality. These facts should drive your ideological frontiers NOT the other way around. Just my humble thoughts!! Cheers.
    26 Jun 2014, 03:26 PM Reply Like
  • ephud
    , contributor
    Comments (4387) | Send Message
     
    jaweid

     

    "What part of the administration announcement ("expedite") do you NOT understand?? Your comments speak volumes about your lack of comprehension of the LNG business model viz a viz US energy resources realignment. Let me attempt to demystify in simplest words.... Given knowledge of all these ground reality factotums, is it still surprising to see LNG scrips jump forward???"

     

    Get a clue. LNG is the symbol for Cheniere Energy Inc. LNG was already permitted. If LNG's competitors permitting process has now been expedited, why would that make LNG's share price jump, and please no condescending putdowns.
    26 Jun 2014, 06:29 PM Reply Like
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