2012 LNG Export Study, 73627-73630 [2012-29894]
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Federal Register / Vol. 77, No. 238 / Tuesday, December 11, 2012 / Notices
Type of Review: Extension of an
existing information collection.
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institutions).
Total Estimated Number of Annual
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Total Estimated Number of Annual
Burden Hours: 3,302 .
Abstract: As provided by the Higher
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110–315), the regulations provide that a
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sources other than Title IV, Higher
Education Act (HEA) funds, sanctions
for failing to meet this requirement, and
otherwise implement the statute by (1)
Specifying a Net Present Value (NPV)
formula used to establish the revenue
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more fully the non-Title IV eligible
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Dated: December 5, 2012.
Stephanie Valentine,
Acting Director, Information Collection
Clearance Division, Privacy, Information and
Records Management Services, Office of
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[FR Doc. 2012–29817 Filed 12–10–12; 8:45 am]
BILLING CODE 4000–01–P
DEPARTMENT OF ENERGY
2012 LNG Export Study
Office of Fossil Energy,
Department of Energy.
AGENCY:
Notice of availability of 2012
LNG Export Study and request for
comments.
ACTION:
Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC ............................................................................
Lake Charles Exports, LLC ...................................................................................................................................
Dominion Cove Point LNG, LP ............................................................................................................................
Carib Energy (USA) LLC ......................................................................................................................................
Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC ............................................................................
Cameron LNG, LLC Gulf ......................................................................................................................................
Gulf Coast LNG Export, LLC ................................................................................................................................
Jordan Cove Energy Project, L.P ..........................................................................................................................
LNG Development Company, LLC (d/b/a Oregon LNG) ....................................................................................
Cheniere Marketing, LLC .....................................................................................................................................
Southern LNG Company, L.L.C ...........................................................................................................................
Gulf LNG Liquefaction Company, LLC ...............................................................................................................
CE FLNG, LLC .......................................................................................................................................................
Excelerate Liquefaction Solutions I, LLC ............................................................................................................
Golden Pass Products LLC ...................................................................................................................................
The Office of Fossil Energy
(FE) of the Department of Energy (DOE)
gives notice of the availability of a
liquefied natural gas (LNG) export
cumulative impact study (LNG Export
Study) in the above-referenced
proceedings and invites the submission
of initial and reply comments regarding
the LNG Export Study. DOE
commissioned the LNG Export Study to
inform DOE’s decisions on applications
seeking authorization to export LNG
from the lower-48 states to non-free
trade agreement (FTA) countries.1 The
LNG Export Study consisted of two
parts. The first part, performed by the
Energy Information Administration
(EIA) and originally published in
January 2012, assessed how specified
scenarios of increased natural gas
exports could affect domestic energy
markets. The second part, performed by
NERA Economic Consulting (NERA)
under contract to DOE, evaluated the
SUMMARY:
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1 The
LNG Export Study did not consider the
impact of exports of Alaska natural gas production.
Because there is no natural gas pipeline
interconnection between Alaska and the lower-48
states, the macroeconomic consequences of
exporting LNG from Alaska are likely to be discrete
and separate from those of exporting from the
lower-48 states.
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macro-economic impact of LNG exports
on the U.S. economy using a general
equilibrium macroeconomic model of
the U.S. economy with an emphasis on
the energy sector and natural gas in
particular. DOE may use the LNG Export
Study to inform its decision in the listed
proceedings and for other purposes.
Comments submitted in compliance
with the instructions in this notice will
be placed in the administrative record
for all of the above-listed proceedings
and need only be submitted once.
Initial comments are to be filed
using procedures detailed in the Public
Comment Procedures section no later
than 4:30 p.m., eastern time, January 24,
2013. Reply comments are to be filed
using the same procedures and will be
accepted for filing from January 25,
2013, until 4:30 p.m., eastern time,
February 25, 2013.
DATES:
ADDRESSES:
Electronic Filing by email:
LNGStudy@hq.doe.gov.
Regular Mail: U.S. Department of
Energy (FE–34), Office of Natural Gas
Regulatory Activities, Office of Fossil
Energy, P.O. Box 44375, Washington,
DC 20026–4375.
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10–161–LNG]
11–59–LNG]
11–128–LNG]
11–141–LNG]
11–161–LNG]
11–162–LNG]
12–05–LNG]
12–32–LNG]
12–77–LNG]
12–97–LNG]
12–100–LNG]
12–101–LNG]
12–123–LNG]
12–146–LNG]
12–156–LNG]
Hand Delivery or Private Delivery
Services (e.g., FedEx, UPS, etc.): U.S.
Department of Energy (FE–34), Office of
Natural Gas Regulatory Activities, Office
of Fossil Energy, Forrestal Building,
Room 3E–042, 1000 Independence
Avenue SW., Washington, DC 20585.
FOR FURTHER INFORMATION CONTACT:
John Anderson, U.S. Department of
Energy (FE–34), Office of Natural Gas
Regulatory Activities, Office of Fossil
Energy, Forrestal Building, Room 3E–
042, 1000 Independence Avenue SW.,
Washington, DC 20585, (202) 586–
0521.
Edward Myers, U.S. Department of
Energy, Office of the Assistant
General Counsel for Electricity and
Fossil Energy, Forrestal Building,
Room 6B–256, 1000 Independence
Ave. SW., Washington, DC 20585,
(202) 586–3397.
SUPPLEMENTARY INFORMATION:
Background
Pursuant to section 3 of the Natural
Gas Act, 15 U.S.C. 717b, exports of
natural gas, including LNG, must be
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Federal Register / Vol. 77, No. 238 / Tuesday, December 11, 2012 / Notices
authorized by DOE/FE.2 Applications
that seek authority to export natural gas
to countries with which the United
States has not entered into a free trade
agreement providing for national
treatment for trade in natural gas (nonFTA nations) are presumed to be in the
public interest unless, after opportunity
for a hearing, DOE finds that the
authorizations would not be consistent
with the public interest.
On May 20, 2011, in Sabine Pass
Liquefaction, LLC, Opinion and Order
No. 2961 (Sabine Pass), DOE issued a
conditional authorization to Sabine Pass
Liquefaction, LLC for exports to nonFTA nations.3 Due to its receipt of other
applications to export LNG to non-FTA
nations, and in anticipation of
additional applications, DOE cautioned
in Order No. 2961 that it has a
continuing duty to monitor supply and
demand conditions in the United States
in order to ensure that authorizations to
export LNG do not subsequently lead to
a reduction in the supply of natural gas
needed to meet essential domestic
needs. Order No. 2961 at 32. DOE
further stated that it would evaluate the
cumulative impact of the Sabine Pass
authorization and any future export
authorizations when considering
subsequent applications for such
authority. Id.
Like Sabine Pass, the 15 proceedings
identified above involve applications
submitted by the named parties seeking
authorization to export LNG from the
lower-48 states to non-FTA nations. In
response, DOE commissioned a study,
consisting of two separate parts, of the
economic impacts of granting these
types of applications. The purpose of
this Notice is to post the LNG Export
Study in the 15 proceedings, and to
invite initial and reply comments on the
LNG Export Study, as applied to the
pending matters. The LNG Export Study
and the comments that DOE/FE receives
in response to this Notice will help to
inform our determination of the public
interest in each case.
tkelley on DSK3SPTVN1PROD with
The LNG Export Study
In summary, the LNG Export Study
includes:
• An analysis performed by the
Energy Information Administration
(EIA) and originally published in
2 The authority to regulate the imports and
exports of natural gas, including liquefied natural
gas, under section 3 of the NGA (15 U.S.C. § 717b)
has been delegated to the Assistant Secretary for FE
in Redelegation Order No. 00–002.04E (issued April
29, 2011).
3 On August 7, 2012, DOE/FE issued Order No.
2961–A, A Final Opinion and Order Granting LongTerm Authority To Export LNG From Sabine Pass
LNG Terminal to Non-Free Trade Agreement
Nations.
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January 2012, entitled Effect of
Increased Natural Gas Exports on
Domestic Energy Markets (EIA Study),
examining how specified scenarios of
increased natural gas exports could
affect domestic energy markets.
• An evaluation performed by NERA
Economic Consulting (NERA), a private
contractor retained by DOE, entitled
Macroeconomic Impacts of Increased
LNG Exports From the United States
(NERA Study). The NERA analysis
assessed the macroeconomic impact of
LNG exports on the U.S. economy using
a general equilibrium macroeconomic
model of the U.S. economy with an
emphasis on the energy sector and
natural gas in particular.
The purpose of the LNG Export Study
was to evaluate the cumulative
economic impact of the Sabine Pass
authorization and any future requests
for authority to export LNG. At the time
DOE commissioned the EIA analysis, it
had issued the Sabine Pass conditional
authorization and had received
applications for authority to export LNG
by vessel from two additional proposed
liquefaction facilities. The combined
granted and requested authority to
export LNG to non-FTA nations at that
time was the equivalent of 5.6 billion
cubic feet per day (Bcf/day) of natural
gas. Additionally, DOE had been
contacted by other companies that were
considering filing additional
applications to export LNG to non-FTA
nations in the Fall of 2011. The
approximate volume under
consideration for export from these
companies was equivalent to
approximately another 6 Bcf/day of
natural gas.
Given the growing interest in
exporting LNG from the lower-48 states,
DOE designed the scope of the first part
of the LNG Export Study, performed by
EIA, to understand the implications of
additional natural gas demand (as
exports) on domestic energy markets
under various scenarios. The scenarios
established were not forecasts of either
the ultimate level, or rates of increase,
of exports; instead, these scenarios were
established to set a wide range of
potential LNG export scenarios, as
assessed by DOE at that time.
However, the EIA analysis did not
address the macroeconomic impacts of
natural gas exports on the U.S.
economy. In particular, given its
domestic focus, EIA’s National Energy
Modeling System does not account for
the impact of energy price changes on
the global utilization pattern for existing
capacity or the siting of new capacity
inside or outside of the United States in
energy-intensive industries.
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Therefore, DOE commissioned NERA
to conduct such an analysis. The NERA
macroeconomic analysis includes a
feasibility analysis of exporting the
specified quantities of natural gas used
in the EIA analysis, as well as a range
of additional global scenarios for natural
gas supply and demand, including cases
with no export constraints.
The NERA study is available on the
DOE/FE Web site (https://
www.fossil.energy.gov/programs/
gasregulation/LNGStudy.html). The EIA
study remains available on the EIA Web
site (www.eia.gov/analysis/requests/fe).
Electronic links to both parts have been
posted to the 15 listed dockets.
Key Findings of the NERA Study
The Executive Summary of the NERA
Study sets forth several key findings
regarding the macroeconomic impacts of
permitting exports of LNG from the
lower-48 states. DOE does not take a
position regarding these findings at this
time. However, given the complexity of
the NERA Study, and in order to help
focus the comments being solicited by
this Request, it is worthwhile to set out
NERA’s key findings verbatim. In
considering NERA’s findings,
commenters are urged to keep in mind
that the NERA Study was performed by
an independent non-governmental
organization under contract to DOE and
that its findings are NERA’s own
findings, not those of DOE. The NERA
Study’s key findings, as presented in the
NERA Study’s Executive Summary are
as follows:
This report contains an analysis of the
impact of exports of LNG on the U.S.
economy under a wide range of different
assumptions about levels of exports, global
market conditions, and the cost of producing
natural gas in the U.S. These assumptions
were combined first into a set of scenarios
that explored the range of fundamental
factors driving natural gas supply and
demand. These market scenarios ranged from
relatively normal conditions to stress cases
with high costs of producing natural gas in
the U.S. and exceptionally large demand for
U.S. LNG exports in world markets. The
economic impacts of different limits on LNG
exports were examined under each of the
market scenarios. Export limits were set at
levels that ranged from zero to unlimited in
each of the scenarios.
Across all these scenarios, the U.S. was
projected to gain net economic benefits from
allowing LNG exports. Moreover, for every
one of the market scenarios examined, net
economic benefits increased as the level of
LNG exports increased. In particular,
scenarios with unlimited exports always had
higher net economic benefits than
corresponding cases with limited exports.
In all of these cases, benefits that come
from export expansion more than outweigh
the losses from reduced capital and wage
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Federal Register / Vol. 77, No. 238 / Tuesday, December 11, 2012 / Notices
income to U.S. consumers, and hence LNG
exports have net economic benefits in spite
of higher domestic natural gas prices. This is
exactly the outcome that economic theory
describes when barriers to trade are removed.
Net benefits to the U.S. would be highest
if the U.S. becomes able to produce large
quantities of gas from shale at low cost, if
world demand for natural gas increases
rapidly, and if LNG supplies from other
regions are limited. If the promise of shale
gas is not fulfilled and costs of producing gas
in the U.S. rise substantially, or if there are
ample supplies of LNG from other regions to
satisfy world demand, the U.S. would not
export LNG. Under these conditions,
allowing exports of LNG would cause no
change in natural gas prices and do no harm
to the overall economy.
U.S. natural gas prices increase when the
U.S. exports LNG. But the global market
limits how high U.S. natural gas prices can
rise under pressure of LNG exports because
importers will not purchase U.S. exports if
U.S. wellhead price rises above the cost of
competing supplies. In particular, the U.S.
natural gas price does not become linked to
oil prices in any of the cases examined.
Natural gas price changes attributable to
LNG exports remain in a relatively narrow
range across the entire range of scenarios.
Natural gas price increases at the time LNG
exports could begin range from zero to $0.33
(2010 $/Mcf). The largest price increases that
would be observed after 5 more years of
potentially growing exports could range from
$0.22 to $1.11 (2010 $/Mcf). The higher end
of the range is reached only under conditions
of ample U.S. supplies and low domestic
natural gas prices, with smaller price
increases when U.S. supplies are more costly
and domestic prices higher.
How increased LNG exports will affect
different socio-economic groups will depend
on their income sources. Like other trade
measures, LNG exports will cause shifts in
industrial output and employment and in
sources of income. Overall, both total labor
compensation and income from investment
are projected to decline, and income to
owners of natural gas resources will increase.
Different socio-economic groups depend on
different sources of income, though through
retirement savings an increasingly large
number of workers share in the benefits of
higher income to natural resource companies
whose shares they own. Nevertheless,
impacts will not be positive for all groups in
the economy. Households with income solely
from wages or government transfers, in
particular, might not participate in these
benefits.
Serious competitive impacts are likely to
be confined to narrow segments of industry.
About 10% of U.S. manufacturing, measured
by value of shipments, has both energy
expenditures greater than 5% of the value of
its output and serious exposure to foreign
competition. Employment in industries with
these characteristics is about one-half of one
percent of total U.S. employment.
LNG exports are not likely to affect the
overall level of employment in the U.S. There
will be some shifts in the number of workers
across industries, with those industries
associated with natural gas production and
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exports attracting workers away from other
industries. In no scenario is the shift in
employment out of any industry projected to
be larger than normal rates of turnover of
employees in those industries.
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Public Comment Procedures
DOE is not establishing a new
proceeding or docket by today’s
issuance and the submission of
comments in response to this Notice
will not make commenters parties to
any of the pending 15 cases. Persons
with an interest in the outcome of one
or more of the 15 pending matters have
been given an opportunity to intervene
in or protest those pending matters by
complying with the procedures
established in the respective notices of
application issued in the pending 15
matters and published in the Federal
Register.4
The record in the 15 pending
proceedings will include all comments
received in response to this Notice.
Initial and reply comments will be
reviewed on a consolidated basis for
purposes of hearing, and decisions will
be issued on a case-by-case basis. In
addition to the procedures established
by this Notice, all comments must meet
the applicable requirements of DOE’s
regulations at 10 CFR part 590. The
more specific your comments, the more
useful they will be.
Reply comments should be directed
toward matters specifically addressed in
initial comments and should not
introduce new issues not previously
raised by other commenters. Reply
comments will not be accepted until the
opportunity for filing initial comments
has run.
Comments may be submitted using
one of the following methods: (1)
Emailing the filing to
LNGStudy@hq.doe.gov; (2) mailing an
original and three paper copies of the
filing to the Office of Natural Gas
Regulatory Activities at the address
listed in ADDRESSES; or (3) hand
delivering an original and three paper
copies of the filing to the Office of
Natural Gas Regulatory Activities at the
address listed in ADDRESSES.
All comments and reply comments
submitted in response to this Notice
should reference the ‘‘2012 LNG Export
Study’’ in the title line. Any comments
greater than 5 pages, double-spaced, in
length must be submitted in electronic
format.
The 2012 LNG Export Study is
available for inspection and copying in
the Office of Natural Gas Regulatory
Activities docket room, Room 3E–042,
1000 Independence Avenue, SW.,
Washington, DC 20585. The docket
room is open between the hours of 8:00
a.m. and 4:30 p.m., Monday through
Friday, except Federal holidays. All
initial and reply comments filed in
response to this Notice will be available
electronically by going to the following
DOE/FE Web address: https://
4 Notices of application in 12 of the pending cases
were published in the Federal Register as follows:
Freeport LNG Expansion, L.P. and FLNG
Liquefaction, LLC, FE Docket No. 10–161–LNG, 76
FR4885 (January 27, 2011); Lake Charles Exports,
LLC, FE Docket No. 11–59–LNG, 76 FR 34212 (June
13, 2011); Dominion Cove Point LNG, LP, FE Docket
No. 11–128–LNG, 76 FR 76698 (December 8, 2011);
Carib Energy (USA) LLC, FE Docket No. 11–141–
LNG, 76 FR 80913 (December 12, 2011); Freeport
LNG Expansion, L.P. and FLNG Liquefaction, LLC,
FE Docket No. 11–161–LNG, 77 FR 7568 (February
13, 2012); Cameron LNG, LLC, FE Docket No. 11–
162–LNG, 77 FR 10732 (February 23, 2012); Gulf
Coast LNG Export, LLC, FE Docket No. 12–05–LNG,
77 FR 32962 (June 4, 2012); Jordan Cove Energy
Project, L.P.,FE Docket No. 12–32–LNG, 77 FR
33446 (June 6, 2012); LNG Development Company,
LLC (d/b/a Oregon LNG), FE Docket No. 12–77–
LNG, 77 FR 55197 (September 7, 2012); Southern
LNG Company, L.L.C., FE Docket No. 12–100–LNG,
77 FR 63806 (October 17, 2012); Cheniere
Marketing, LLC, FE Docket No. 12–097–LNG, 77 FR
64964 (October 24, 2012); and Gulf LNG
Liquefaction Company, LLC FE Docket No. 12–101–
LNG, 77 FR 66454, (November 5, 2012). Comments
will be received in three other proceedings in
which the notices of application were issued by
DOE/FE on November 30, 2012, but have not yet
posted to the Federal Register, including CE FLNG,
LLC, FE Docket No. 12–123–LNG; Excelerate
Liquefaction Solutions I, LLC, FE Docket No. 12–
146–LNG; and Golden Pass Products LLC, FE
Docket No. 12–156–LNG..
NERA Study at 1–2.
Invitation to Comment
DOE invites comments regarding the
LNG Export Study that will help to
inform DOE in its public interest
determinations of the authorizations
sought in the 15 pending applications.
Comments must be limited to the results
and conclusions of these independent
analyses on the factors evaluated. These
factors include the impact of LNG
exports on: domestic energy
consumption, production, and prices,
and particularly the macroeconomic
factors identified in the NERA analysis,
including Gross Domestic Product
(GDP), welfare analysis, consumption,
U.S. economic sector analysis, and U.S.
LNG export feasibility analysis, and any
other factors included in the analyses.
In addition, comments can be directed
toward the feasibility of various
scenarios used in both analyses. While
this invitation to comment covers a
broad range of issues, the Department
may disregard comments that are not
germane to the present inquiry.
Moreover, no final decisions will be
issued in the 15 pending proceedings
until DOE has received and evaluated
the comments requested herein.
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www.fossil.energy.gov/programs/
gasregulation/LNGStudy.html.
Issued in Washington, DC, on December 5,
2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities,
Office of Oil and Gas Global Security and
Supply, Office of Fossil Energy.
[FR Doc. 2012–29894 Filed 12–10–12; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Federal Energy Regulatory
Commission
[Docket No. IC12–19–000]
Commission Information Collection
Activities (FERC–732); Comment
Request
Federal Energy Regulatory
Commission.
ACTION: Comment request.
AGENCY:
In compliance with the
requirements of the Paperwork
Reduction Act of 1995, 44 U.S.C.
3507(a)(1)(D), the Federal Energy
Regulatory Commission (Commission or
FERC) is submitting the information
collection FERC–732 (Electric Rate
Schedules and Tariffs: Long-Term Firm
Transmission Rights in Organized
Electricity Markets) to the Office of
Management and Budget (OMB) for
review of the information collection
requirements. Any interested person
may file comments directly with OMB
and should address a copy of those
comments to the Commission as
explained below. The Commission
issued a Notice in the Federal Register
(77 FR 58116, 9/19/2012) requesting
public comments. FERC received no
comments on the FERC–732 and is
making this notation in its submittal to
OMB.
DATES: Comments on the collection of
information are due by January 10,
2013.
ADDRESSES: Comments filed with OMB,
identified by the OMB Control No.
1902–0245, should be sent via email to
the Office of Information and Regulatory
Affairs: oira_submission@omb.gov.
Attention: Federal Energy Regulatory
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SUMMARY:
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Commission Desk Officer. The Desk
Officer may also be reached via
telephone at 202–395–4718.
A copy of the comments should also
be sent to the Federal Energy Regulatory
Commission, identified by the Docket
No. IC12–19–000, by either of the
following methods:
• eFiling at Commission’s Web Site:
https://www.ferc.gov/docs-filing/
efiling.asp.
• Mail/Hand Delivery/Courier:
Federal Energy Regulatory Commission,
Secretary of the Commission, 888 First
Street NE., Washington, DC 20426.
Instructions: All submissions must be
formatted and filed in accordance with
submission guidelines at: https://
www.ferc.gov/help/submissionguide.asp. For user assistance contact
FERC Online Support by email at
ferconlinesupport@ferc.gov, or by phone
at: (866) 208–3676 (toll-free), or (202)
502–8659 for TTY.
Docket: Users interested in receiving
automatic notification of activity in this
docket or in viewing/downloading
comments and issuances in this docket
may do so at https://www.ferc.gov/docsfiling/docs-filing.asp.
FOR FURTHER INFORMATION CONTACT:
Ellen Brown may be reached by email
at DataClearance@FERC.gov, by
telephone at (202) 502–8663, and by fax
at (202) 273–0873.
SUPPLEMENTARY INFORMATION:
Title: FERC–732, Electric Rate
Schedules and Tariffs: Long-Term Firm
Transmission Rights in Organized
Electricity Markets.
OMB Control No.: 1902–0245.
Type of Request: Three-year extension
of the FERC–732 information collection
requirements with no changes to the
reporting requirements.
Abstract: 18 CFR Part 42 provides the
reporting requirements of FERC–732 as
they pertain to long-term transmission
rights. To implement section 1233 of the
Energy Policy Act of 2005 (EPAct
2005),1 the Commission requires each
transmission organization that is a
public utility with one or more
organized electricity markets to make
available long-term firm transmission
1 Public
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rights that satisfy each of the
Commission’s guidelines.
The FERC–732 regulations require
that transmission organizations (that are
public utilities with one or more
organized electricity markets) choose
one of two ways to file:
• File tariff sheets making long-term
firm transmission rights available that
are consistent with each of the
guidelines established by FERC.
• File an explanation describing how
their existing tariffs already provide
long-term firm transmission rights that
are consistent with the guidelines.
Additionally, the Commission requires
each transmission organization to make
its transmission planning and expansion
procedures and plans available to the
public.
FERC–732 enables the Commission to
exercise its wholesale electric rate and
electric power transmission oversight
and enforcement responsibilities in
accordance with the FPA, the
Department of Energy Organization Act
(DOE Act), and EPAct 2005.
The Commission intends to include
the FERC–732 and all of its applicable
requirements within FERC–516 (OMB
Control No. 1902–0096). The
Commission will ensure complete
renewal (to include publishing all
public notifications and receiving Office
of Management and Budget approval) of
FERC–732 information collection. After
the collection is renewed, the
Commission will seek to incorporate
administratively FERC–732 information
collection requirements into FERC–516.
Finally, the Commission will
discontinue the vacant FERC–732
information collection.
Type of Respondents: Public utility
with one or more organized electricity
markets.
Estimate of Annual Burden: 2 The
Commission estimates the total Public
Reporting Burden for this information
collection as:
2 Burden is defined as the total time, effort, or
financial resources expended by persons to
generate, maintain, retain, or disclose or provide
information to or for a Federal agency. For further
explanation of what is included in the information
collection burden, reference 5 Code of Federal
Regulations 1320.3.
E:\FR\FM\11DEN1.SGM
11DEN1
]]>Agencies
[Federal Register Volume 77, Number 238 (Tuesday, December 11, 2012)]
[Notices]
[Pages 73627-73630]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-29894]
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DEPARTMENT OF ENERGY
2012 LNG Export Study
AGENCY: Office of Fossil Energy, Department of Energy.
ACTION: Notice of availability of 2012 LNG Export Study and request for
comments.
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Freeport LNG Expansion, L.P. [FE Docket No. 10-161-LNG]
and FLNG Liquefaction, LLC.
Lake Charles Exports, LLC.... [FE Docket No. 11-59-LNG]
Dominion Cove Point LNG, LP.. [FE Docket No. 11-128-LNG]
Carib Energy (USA) LLC....... [FE Docket No. 11-141-LNG]
Freeport LNG Expansion, L.P. [FE Docket No. 11-161-LNG]
and FLNG Liquefaction, LLC.
Cameron LNG, LLC Gulf........ [FE Docket No. 11-162-LNG]
Gulf Coast LNG Export, LLC... [FE Docket No. 12-05-LNG]
Jordan Cove Energy Project, [FE Docket No. 12-32-LNG]
L.P.
LNG Development Company, LLC [FE Docket No. 12-77-LNG]
(d/b/a Oregon LNG).
Cheniere Marketing, LLC...... [FE Docket No. 12-97-LNG]
Southern LNG Company, L.L.C.. [FE Docket No. 12-100-LNG]
Gulf LNG Liquefaction [FE Docket No. 12-101-LNG]
Company, LLC.
CE FLNG, LLC................. [FE Docket No. 12-123-LNG]
Excelerate Liquefaction [FE Docket No. 12-146-LNG]
Solutions I, LLC.
Golden Pass Products LLC..... [FE Docket No. 12-156-LNG]
SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy
(DOE) gives notice of the availability of a liquefied natural gas (LNG)
export cumulative impact study (LNG Export Study) in the above-
referenced proceedings and invites the submission of initial and reply
comments regarding the LNG Export Study. DOE commissioned the LNG
Export Study to inform DOE's decisions on applications seeking
authorization to export LNG from the lower-48 states to non-free trade
agreement (FTA) countries.\1\ The LNG Export Study consisted of two
parts. The first part, performed by the Energy Information
Administration (EIA) and originally published in January 2012, assessed
how specified scenarios of increased natural gas exports could affect
domestic energy markets. The second part, performed by NERA Economic
Consulting (NERA) under contract to DOE, evaluated the macro-economic
impact of LNG exports on the U.S. economy using a general equilibrium
macroeconomic model of the U.S. economy with an emphasis on the energy
sector and natural gas in particular. DOE may use the LNG Export Study
to inform its decision in the listed proceedings and for other
purposes. Comments submitted in compliance with the instructions in
this notice will be placed in the administrative record for all of the
above-listed proceedings and need only be submitted once.
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\1\ The LNG Export Study did not consider the impact of exports
of Alaska natural gas production. Because there is no natural gas
pipeline interconnection between Alaska and the lower-48 states, the
macroeconomic consequences of exporting LNG from Alaska are likely
to be discrete and separate from those of exporting from the lower-
48 states.
DATES: Initial comments are to be filed using procedures detailed in
the Public Comment Procedures section no later than 4:30 p.m., eastern
time, January 24, 2013. Reply comments are to be filed using the same
procedures and will be accepted for filing from January 25, 2013, until
---------------------------------------------------------------------------
4:30 p.m., eastern time, February 25, 2013.
ADDRESSES:
Electronic Filing by email: LNGStudy@hq.doe.gov.
Regular Mail: U.S. Department of Energy (FE-34), Office of Natural
Gas Regulatory Activities, Office of Fossil Energy, P.O. Box 44375,
Washington, DC 20026-4375.
Hand Delivery or Private Delivery Services (e.g., FedEx, UPS,
etc.): U.S. Department of Energy (FE-34), Office of Natural Gas
Regulatory Activities, Office of Fossil Energy, Forrestal Building,
Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585.
FOR FURTHER INFORMATION CONTACT:
John Anderson, U.S. Department of Energy (FE-34), Office of Natural Gas
Regulatory Activities, Office of Fossil Energy, Forrestal Building,
Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585, (202)
586-0521.
Edward Myers, U.S. Department of Energy, Office of the Assistant
General Counsel for Electricity and Fossil Energy, Forrestal Building,
Room 6B-256, 1000 Independence Ave. SW., Washington, DC 20585, (202)
586-3397.
SUPPLEMENTARY INFORMATION:
Background
Pursuant to section 3 of the Natural Gas Act, 15 U.S.C. 717b,
exports of natural gas, including LNG, must be
[[Page 73628]]
authorized by DOE/FE.\2\ Applications that seek authority to export
natural gas to countries with which the United States has not entered
into a free trade agreement providing for national treatment for trade
in natural gas (non-FTA nations) are presumed to be in the public
interest unless, after opportunity for a hearing, DOE finds that the
authorizations would not be consistent with the public interest.
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\2\ The authority to regulate the imports and exports of natural
gas, including liquefied natural gas, under section 3 of the NGA (15
U.S.C. Sec. 717b) has been delegated to the Assistant Secretary for
FE in Redelegation Order No. 00-002.04E (issued April 29, 2011).
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On May 20, 2011, in Sabine Pass Liquefaction, LLC, Opinion and
Order No. 2961 (Sabine Pass), DOE issued a conditional authorization to
Sabine Pass Liquefaction, LLC for exports to non-FTA nations.\3\ Due to
its receipt of other applications to export LNG to non-FTA nations, and
in anticipation of additional applications, DOE cautioned in Order No.
2961 that it has a continuing duty to monitor supply and demand
conditions in the United States in order to ensure that authorizations
to export LNG do not subsequently lead to a reduction in the supply of
natural gas needed to meet essential domestic needs. Order No. 2961 at
32. DOE further stated that it would evaluate the cumulative impact of
the Sabine Pass authorization and any future export authorizations when
considering subsequent applications for such authority. Id.
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\3\ On August 7, 2012, DOE/FE issued Order No. 2961-A, A Final
Opinion and Order Granting Long-Term Authority To Export LNG From
Sabine Pass LNG Terminal to Non-Free Trade Agreement Nations.
---------------------------------------------------------------------------
Like Sabine Pass, the 15 proceedings identified above involve
applications submitted by the named parties seeking authorization to
export LNG from the lower-48 states to non-FTA nations. In response,
DOE commissioned a study, consisting of two separate parts, of the
economic impacts of granting these types of applications. The purpose
of this Notice is to post the LNG Export Study in the 15 proceedings,
and to invite initial and reply comments on the LNG Export Study, as
applied to the pending matters. The LNG Export Study and the comments
that DOE/FE receives in response to this Notice will help to inform our
determination of the public interest in each case.
The LNG Export Study
In summary, the LNG Export Study includes:
An analysis performed by the Energy Information
Administration (EIA) and originally published in January 2012, entitled
Effect of Increased Natural Gas Exports on Domestic Energy Markets (EIA
Study), examining how specified scenarios of increased natural gas
exports could affect domestic energy markets.
An evaluation performed by NERA Economic Consulting
(NERA), a private contractor retained by DOE, entitled Macroeconomic
Impacts of Increased LNG Exports From the United States (NERA Study).
The NERA analysis assessed the macroeconomic impact of LNG exports on
the U.S. economy using a general equilibrium macroeconomic model of the
U.S. economy with an emphasis on the energy sector and natural gas in
particular.
The purpose of the LNG Export Study was to evaluate the cumulative
economic impact of the Sabine Pass authorization and any future
requests for authority to export LNG. At the time DOE commissioned the
EIA analysis, it had issued the Sabine Pass conditional authorization
and had received applications for authority to export LNG by vessel
from two additional proposed liquefaction facilities. The combined
granted and requested authority to export LNG to non-FTA nations at
that time was the equivalent of 5.6 billion cubic feet per day (Bcf/
day) of natural gas. Additionally, DOE had been contacted by other
companies that were considering filing additional applications to
export LNG to non-FTA nations in the Fall of 2011. The approximate
volume under consideration for export from these companies was
equivalent to approximately another 6 Bcf/day of natural gas.
Given the growing interest in exporting LNG from the lower-48
states, DOE designed the scope of the first part of the LNG Export
Study, performed by EIA, to understand the implications of additional
natural gas demand (as exports) on domestic energy markets under
various scenarios. The scenarios established were not forecasts of
either the ultimate level, or rates of increase, of exports; instead,
these scenarios were established to set a wide range of potential LNG
export scenarios, as assessed by DOE at that time.
However, the EIA analysis did not address the macroeconomic impacts
of natural gas exports on the U.S. economy. In particular, given its
domestic focus, EIA's National Energy Modeling System does not account
for the impact of energy price changes on the global utilization
pattern for existing capacity or the siting of new capacity inside or
outside of the United States in energy-intensive industries.
Therefore, DOE commissioned NERA to conduct such an analysis. The
NERA macroeconomic analysis includes a feasibility analysis of
exporting the specified quantities of natural gas used in the EIA
analysis, as well as a range of additional global scenarios for natural
gas supply and demand, including cases with no export constraints.
The NERA study is available on the DOE/FE Web site (https://www.fossil.energy.gov/programs/gasregulation/LNGStudy.html). The EIA
study remains available on the EIA Web site (www.eia.gov/analysis/requests/fe). Electronic links to both parts have been posted to the 15
listed dockets.
Key Findings of the NERA Study
The Executive Summary of the NERA Study sets forth several key
findings regarding the macroeconomic impacts of permitting exports of
LNG from the lower-48 states. DOE does not take a position regarding
these findings at this time. However, given the complexity of the NERA
Study, and in order to help focus the comments being solicited by this
Request, it is worthwhile to set out NERA's key findings verbatim. In
considering NERA's findings, commenters are urged to keep in mind that
the NERA Study was performed by an independent non-governmental
organization under contract to DOE and that its findings are NERA's own
findings, not those of DOE. The NERA Study's key findings, as presented
in the NERA Study's Executive Summary are as follows:
This report contains an analysis of the impact of exports of LNG
on the U.S. economy under a wide range of different assumptions
about levels of exports, global market conditions, and the cost of
producing natural gas in the U.S. These assumptions were combined
first into a set of scenarios that explored the range of fundamental
factors driving natural gas supply and demand. These market
scenarios ranged from relatively normal conditions to stress cases
with high costs of producing natural gas in the U.S. and
exceptionally large demand for U.S. LNG exports in world markets.
The economic impacts of different limits on LNG exports were
examined under each of the market scenarios. Export limits were set
at levels that ranged from zero to unlimited in each of the
scenarios.
Across all these scenarios, the U.S. was projected to gain net
economic benefits from allowing LNG exports. Moreover, for every one
of the market scenarios examined, net economic benefits increased as
the level of LNG exports increased. In particular, scenarios with
unlimited exports always had higher net economic benefits than
corresponding cases with limited exports.
In all of these cases, benefits that come from export expansion
more than outweigh the losses from reduced capital and wage
[[Page 73629]]
income to U.S. consumers, and hence LNG exports have net economic
benefits in spite of higher domestic natural gas prices. This is
exactly the outcome that economic theory describes when barriers to
trade are removed.
Net benefits to the U.S. would be highest if the U.S. becomes
able to produce large quantities of gas from shale at low cost, if
world demand for natural gas increases rapidly, and if LNG supplies
from other regions are limited. If the promise of shale gas is not
fulfilled and costs of producing gas in the U.S. rise substantially,
or if there are ample supplies of LNG from other regions to satisfy
world demand, the U.S. would not export LNG. Under these conditions,
allowing exports of LNG would cause no change in natural gas prices
and do no harm to the overall economy.
U.S. natural gas prices increase when the U.S. exports LNG. But
the global market limits how high U.S. natural gas prices can rise
under pressure of LNG exports because importers will not purchase
U.S. exports if U.S. wellhead price rises above the cost of
competing supplies. In particular, the U.S. natural gas price does
not become linked to oil prices in any of the cases examined.
Natural gas price changes attributable to LNG exports remain in
a relatively narrow range across the entire range of scenarios.
Natural gas price increases at the time LNG exports could begin
range from zero to $0.33 (2010 $/Mcf). The largest price increases
that would be observed after 5 more years of potentially growing
exports could range from $0.22 to $1.11 (2010 $/Mcf). The higher end
of the range is reached only under conditions of ample U.S. supplies
and low domestic natural gas prices, with smaller price increases
when U.S. supplies are more costly and domestic prices higher.
How increased LNG exports will affect different socio-economic
groups will depend on their income sources. Like other trade
measures, LNG exports will cause shifts in industrial output and
employment and in sources of income. Overall, both total labor
compensation and income from investment are projected to decline,
and income to owners of natural gas resources will increase.
Different socio-economic groups depend on different sources of
income, though through retirement savings an increasingly large
number of workers share in the benefits of higher income to natural
resource companies whose shares they own. Nevertheless, impacts will
not be positive for all groups in the economy. Households with
income solely from wages or government transfers, in particular,
might not participate in these benefits.
Serious competitive impacts are likely to be confined to narrow
segments of industry. About 10% of U.S. manufacturing, measured by
value of shipments, has both energy expenditures greater than 5% of
the value of its output and serious exposure to foreign competition.
Employment in industries with these characteristics is about one-
half of one percent of total U.S. employment.
LNG exports are not likely to affect the overall level of
employment in the U.S. There will be some shifts in the number of
workers across industries, with those industries associated with
natural gas production and exports attracting workers away from
other industries. In no scenario is the shift in employment out of
any industry projected to be larger than normal rates of turnover of
employees in those industries.
NERA Study at 1-2.
Invitation to Comment
DOE invites comments regarding the LNG Export Study that will help
to inform DOE in its public interest determinations of the
authorizations sought in the 15 pending applications. Comments must be
limited to the results and conclusions of these independent analyses on
the factors evaluated. These factors include the impact of LNG exports
on: domestic energy consumption, production, and prices, and
particularly the macroeconomic factors identified in the NERA analysis,
including Gross Domestic Product (GDP), welfare analysis, consumption,
U.S. economic sector analysis, and U.S. LNG export feasibility
analysis, and any other factors included in the analyses. In addition,
comments can be directed toward the feasibility of various scenarios
used in both analyses. While this invitation to comment covers a broad
range of issues, the Department may disregard comments that are not
germane to the present inquiry. Moreover, no final decisions will be
issued in the 15 pending proceedings until DOE has received and
evaluated the comments requested herein.
Public Comment Procedures
DOE is not establishing a new proceeding or docket by today's
issuance and the submission of comments in response to this Notice will
not make commenters parties to any of the pending 15 cases. Persons
with an interest in the outcome of one or more of the 15 pending
matters have been given an opportunity to intervene in or protest those
pending matters by complying with the procedures established in the
respective notices of application issued in the pending 15 matters and
published in the Federal Register.\4\
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\4\ Notices of application in 12 of the pending cases were
published in the Federal Register as follows: Freeport LNG
Expansion, L.P. and FLNG Liquefaction, LLC, FE Docket No. 10-161-
LNG, 76 FR4885 (January 27, 2011); Lake Charles Exports, LLC, FE
Docket No. 11-59-LNG, 76 FR 34212 (June 13, 2011); Dominion Cove
Point LNG, LP, FE Docket No. 11-128-LNG, 76 FR 76698 (December 8,
2011); Carib Energy (USA) LLC, FE Docket No. 11-141-LNG, 76 FR 80913
(December 12, 2011); Freeport LNG Expansion, L.P. and FLNG
Liquefaction, LLC, FE Docket No. 11-161-LNG, 77 FR 7568 (February
13, 2012); Cameron LNG, LLC, FE Docket No. 11-162-LNG, 77 FR 10732
(February 23, 2012); Gulf Coast LNG Export, LLC, FE Docket No. 12-
05-LNG, 77 FR 32962 (June 4, 2012); Jordan Cove Energy Project,
L.P.,FE Docket No. 12-32-LNG, 77 FR 33446 (June 6, 2012); LNG
Development Company, LLC (d/b/a Oregon LNG), FE Docket No. 12-77-
LNG, 77 FR 55197 (September 7, 2012); Southern LNG Company, L.L.C.,
FE Docket No. 12-100-LNG, 77 FR 63806 (October 17, 2012); Cheniere
Marketing, LLC, FE Docket No. 12-097-LNG, 77 FR 64964 (October 24,
2012); and Gulf LNG Liquefaction Company, LLC FE Docket No. 12-101-
LNG, 77 FR 66454, (November 5, 2012). Comments will be received in
three other proceedings in which the notices of application were
issued by DOE/FE on November 30, 2012, but have not yet posted to
the Federal Register, including CE FLNG, LLC, FE Docket No. 12-123-
LNG; Excelerate Liquefaction Solutions I, LLC, FE Docket No. 12-146-
LNG; and Golden Pass Products LLC, FE Docket No. 12-156-LNG..
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The record in the 15 pending proceedings will include all comments
received in response to this Notice. Initial and reply comments will be
reviewed on a consolidated basis for purposes of hearing, and decisions
will be issued on a case-by-case basis. In addition to the procedures
established by this Notice, all comments must meet the applicable
requirements of DOE's regulations at 10 CFR part 590. The more specific
your comments, the more useful they will be.
Reply comments should be directed toward matters specifically
addressed in initial comments and should not introduce new issues not
previously raised by other commenters. Reply comments will not be
accepted until the opportunity for filing initial comments has run.
Comments may be submitted using one of the following methods: (1)
Emailing the filing to LNGStudy@hq.doe.gov; (2) mailing an original and
three paper copies of the filing to the Office of Natural Gas
Regulatory Activities at the address listed in ADDRESSES; or (3) hand
delivering an original and three paper copies of the filing to the
Office of Natural Gas Regulatory Activities at the address listed in
ADDRESSES.
All comments and reply comments submitted in response to this
Notice should reference the ``2012 LNG Export Study'' in the title
line. Any comments greater than 5 pages, double-spaced, in length must
be submitted in electronic format.
The 2012 LNG Export Study is available for inspection and copying
in the Office of Natural Gas Regulatory Activities docket room, Room
3E-042, 1000 Independence Avenue, SW., Washington, DC 20585. The docket
room is open between the hours of 8:00 a.m. and 4:30 p.m., Monday
through Friday, except Federal holidays. All initial and reply comments
filed in response to this Notice will be available electronically by
going to the following DOE/FE Web address: https://
[[Page 73630]]
www.fossil.energy.gov/programs/gasregulation/LNGStudy.html.
Issued in Washington, DC, on December 5, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-29894 Filed 12-10-12; 8:45 am]
BILLING CODE 6450-01-P
