Energy Department OKs Second Natural Gas Export Project

Freeport LNG can export 1.4 million cubic feet per day of natural gas for the next 20 years.


Freeport LNG Development's liquefied natural gas receiving terminal in Freeport, Texas while under construction. The Energy Department approved a permit allowing the facility to send gas overseas.


The Department of Energy conditionally approved an application to export liquefied natural gas to countries that lack free-trade agreements with the United States Friday, opening up the U.S. to play a larger role in the global energy space.

[READ: Lawmakers Say Natural Gas Exports Could Weaken Political Adversaries]

The approval of Freeport LNG's facility in Quintana Island, Texas ends nearly two years of delays in processing export permits, which were held up as lawmakers weighed the pros and cons of exporting the nation's newfound abundance of natural gas to markets abroad.

The Freeport facility, which could send 1.4 billion cubic feet of natural gas per day overseas, is just the second export project to be approved since 2011 when DOE greenlighted Cheniere's Sabine pass terminal in Louisiana.

Sen. John Barrasso, R-Wyo. who introduced a bill to expedite the approval of export projects involving U.S. allies without free-trade agreements, hailed the DOE's approval of the Freeport facility while also scolding the agency for leaving more than a dozen other export permits in limbo.

"Liquefied natural gas exports will create jobs, reduce our trade deficit, and help grow our economy," Barrasso said in a released statement. "While today's decision is welcome, it is woefully inadequate. DOE needs to approve the other pending export applications."

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Sen. Ron Wyden, D-Ore., head of the Senate Energy and Natural Resources committee, was more restrained in his comments and supported the DOE's case-by-case approach: "The Department of Energy's announcement...provides a constructive way for this discussion to go forward that's consistent with my belief that a measured approach on exports will provide the greatest advantage for the U.S. economy."

While Wyden noted that the DOE will take potential price impacts into account when considering future permits, critics of natural gas exports still argue that large-scale overseas shipments are a recipe for steep price increases.

The discovery of massive stores of natural gas in shale formations across the country has driven prices down to record lows, shaving down consumer energy bills and giving manufacturers like Dow Chemical a price break on natural gas, an important feedstock in the production of chemicals.

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That could all change, critics argue, if large-scale exports are allowed to proceed, which would put pressure on supply, drive up prices and potentially squelch a burgeoning renaissance in American manufacturing.

"Shale gas has brought a competitive advantage to the United States," a release from Dow Chemical stated. "Every dollar of natural gas in domestic manufacturing creates upwards of $8 of added value in the overall economy - far more than exporting it as a fuel."

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