Freeport-McMoRan Energy LLC; Application for Long-Term Authorization To Export Liquefied Natural Gas Produced From Domestic Natural Gas Resources to Non-Free Trade Agreement Countries for a 30-Year Period, 34084-34088 [2013-13418]
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Federal Register / Vol. 78, No. 109 / Thursday, June 6, 2013 / Notices
Notice.
276.0 (Shreveport, La.); use,
administration, and navigation.
It is proposed that the hours
of availability at Lindy C. Boggs and
John H. Overton Locks on the J Bennett
Johnston Waterway (Red River) will
remain at the current schedule of 24
hours per day, 7 days per week, 365
days per year. It is also proposed that
the hours of availability at Lock 3,
Russell B. Long, and Joe D. Waggonner
locks will be reduced from the current
schedule of 24 hours per day, 7 days per
week, 365 days per year, to 20 hours per
day, as operated by the contractor, 7
days per week, 365 days per year. The
Inland Marine Transportation System
Level of Service Guidelines led to the
reduced hours of operation for Lock 3,
Russell B. Long, and Joe D. Waggonner
locks. The intended effect is to provide
lock availability that matches existing
lock usage. Pool levels will not be
affected by change of operating hours.
SUMMARY:
Proposed implementation date is
February 1, 2014.
DATES:
Submit written comments
to Mr. James V. Ross, Chief, Operations
Division, Vicksburg District, U.S. Army
Corps of Engineers, 4155 Clay Street,
Vicksburg, MS 39183, or deliver them to
Mr. Ross between the hours of 8:00 a.m.
and 4:00 p.m., Monday through Friday
at the address above. Comments
received and other materials relevant to
the proposed reduction in hours of lock
availability will be posted on the
Vicksburg District Web site, https://
www.mvk.usace.army.mil/.
ADDRESSES:
Mr.
Michael Kidby at the Corps of Engineers
Headquarters in Washington, DC, by
phone at 202–761–0250.
FOR FURTHER INFORMATION CONTACT:
The legal
authority for the regulation governing
the use, administration, and navigation
of the Red River and Locks is Section 4
of the River and Harbor Act of August
18, 1894 (28 Stat. 362), as amended,
which is codified at 33 U.S.C. 1. This
statute requires the Secretary of the
Army to ‘‘prescribe such regulations for
the use, administration, and navigation
of the navigable waters of the United
States’’ as the Secretary determines may
be required by public necessity.
Reference 33 CFR 207.249, Ouachita
and Black Rivers, Ark. and La., Mile 0.0
to Mile 338.0 (Camden, Ark.) above the
mouth of the Black River; the Red River,
La., Mile 6.7 (Junction of Red,
Atchafalaya and Old Rivers) to Mile
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SUPPLEMENTARY INFORMATION:
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Brenda S. Bowen,
Army Federal Register Liaison Officer.
[FR Doc. 2013–13379 Filed 6–5–13; 8:45 a.m.]
BILLING CODE 3720–58–P
written comments are to be filed using
procedures detailed in the Public
Comment Procedures section no later
than 4:30 p.m., eastern time, August 5,
2013.
ADDRESSES: Electronic Filing by email:
fergas@hq.doe.gov.
Regular Mail
DEPARTMENT OF ENERGY
[FE Docket No. 13–26–LNG]
Freeport-McMoRan Energy LLC;
Application for Long-Term
Authorization To Export Liquefied
Natural Gas Produced From Domestic
Natural Gas Resources to Non-Free
Trade Agreement Countries for a 30Year Period
Office of Fossil Energy, DOE.
Notice of application.
AGENCY:
ACTION:
The Office of Fossil Energy
(FE) of the Department of Energy (DOE)
gives notice of receipt of an application
(Application) filed on February 22,
2013, by Freeport-McMoRan Energy
LLC (FME), requesting long-term, multicontract authorization to export
liquefied natural gas (LNG) produced
from domestic sources in an amount up
to 24 million metric tons per year
(mtpa), which FME states is equivalent
to approximately 1,176 billion cubic feet
per year (Bcf/y) of natural gas, or 3.2 Bcf
per day (Bcf/d).1 FME seeks
authorization to export the LNG for a
30-year term from the proposed Main
Pass Energy HubTM Deepwater Port
(MPEHTM Port), to be located in federal
waters in Main Pass Block 299, 16 miles
offshore of Louisiana. In the portion of
FME’s Application subject to this
Notice, FME requests authorization to
export LNG to any country with which
the United States does not have a free
trade agreement (FTA) requiring
national treatment for trade in natural
gas (non-FTA countries) with which
trade is not prohibited by U.S. law or
policy. FME requests that this
authorization commence on the earlier
of the date of first export or 10 years
from the date the authorization is
granted. FME requests this authorization
both on its behalf and as agent for other
parties who hold title to the LNG at the
time of export. The Application was
filed under section 3 of the Natural Gas
Act (NGA), 15 U.S.C. 717b.
DATES: Protests, motions to intervene or
notices of intervention, as applicable,
requests for additional procedures, and
SUMMARY:
1 Applicants are required to provide volumes of
natural gas in Bcf, 10 CFR 590.202(b)(1), and
therefore DOE/FE will address FME’s requested
authorization in Bcf/y below.
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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:
Larine Moore or Marc Talbert, 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) 586–9478; (202) 586–7991.
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 Avenue SW.,
Washington, DC 20585, (202) 586–3397.
SUPPLEMENTARY INFORMATION:
Background
FME, a subsidiary of McMoRan
Exploration Co., is a Delaware limited
liability company with its principal
place of business in New Orleans,
Louisiana. FME is also an initial
member of Main Pass Energy Hub LLC
(MPEH LLC), which is a Delaware
limited liability company with its
principal place of business in New
Orleans, Louisiana. The other initial
member of MPEH LLC is United LNG,
LLC, a Delaware limited liability
company.
FME is requesting this authorization
to export LNG from the MPEHTM Port,
currently owned by FME. FME and
United LNG, LP are parties to a
Memorandum of Understanding (MOU)
concerning the commercial
development of the MPEHTM Port.
United LNG, LP is a Texas limited
partnership with its principal place of
business in Houston, Texas. After
execution of the MOU, MPEH LLC was
formed.
FME states that the MPEHTM Port is
proposed to be located in approximately
210 feet of water at a deepwater site in
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the Gulf of Mexico on the Outer
Continental Shelf (OCS) of the United
States, approximately 16 miles offshore
from southeast Louisiana at Main Pass
Block 299 (Block 299).2 FME states that
the MPEHTM Port will be configured to
receive, store, condition, and liquefy
domestic natural gas for export as LNG.
Construction of the MPEHTM Port will
include modification of existing
offshore structures currently owned by
FME; construction of new facilities and
salt dome storage caverns; and
construction, installation, and operation
of floating liquefaction storage and
offloading vessels (FLVs) to be used for
the on-site liquefaction and exportation
of LNG from the MPEHTM Port.
According to FME, the MPEHTM Port
will utilize five large existing
interconnected platforms and three
smaller satellite platforms. FME states
that these platforms will house the gas
conditioning facilities, gas metering
facilities, quarters for on-site employees,
and gas storage and compression
equipment. FME further states that, in
addition to the platform-based facilities,
the MPEHTM Port will consist of six
FLVs, each capable of producing up to
4 mtpa of LNG, for a total production
capacity at the MPEHTM Port of 24 mtpa
of LNG. FME states that each FLV will
be moored using a buoy system and will
be capable of liquefying 537 million
cubic feet per day of natural gas, storing
200,000 cubic meters of LNG, and
delivering LNG to off-taking LNG
carriers utilizing a ship-to-ship process.
According to FME, the amount of
LNG sought to be exported from the
MPEHTM Port in the current Application
is the same amount for which FME’s
affiliate MPEH LLC obtained an export
authorization in January 2013, in DOE/
FE Docket No. 12–114–LNG.
Specifically, in DOE/FE Order No. 3220,
DOE/FE authorized MPEH LLC to
export from the MPEHTM Port up to
1,175 Bcf/y of natural gas (which MPEH
LLC stated was the equivalent of the
requested 24 mtpa of LNG) to any
country with which the United States
currently has, or in the future will have,
a FTA requiring the national treatment
for trade in natural gas, pursuant to
section 3(c) of the Natural Gas Act
(NGA), 15 U.S.C. 717b(c).3 In the
2 According to FME, this site is located at latitude
29°15′56″ and longitude 88°45′34″.
3 Main Pass Energy Hub, LLC, DOE/FE Order No.
3220, Order Granting Long-Term Multi-Contract
Authorization to Export Liquefied Natural Gas by
Vessel from the MPEH Deepwater Port Located 16
miles Offshore the Louisiana Coast in Federal
Waters to Free Trade Agreement Nations (Jan. 4,
2013). In the Main Pass application, MPEH LLC
stated that 24 mtpa was equal to 1,175 Bcf/y of
natural gas and, on that basis, DOE/FE granted
export authorization to MPEH LLC in that amount.
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current Application, FME requests both
FTA and non-FTA authorizations for the
same quantity of LNG, stating that only
24 mtpa of LNG will be exported in any
year from the proposed MPEHTM Port
(which DOE/FE notes is equivalent to
1,175 Bcf/y of natural gas).
Subsequently, in DOE/FE Order No.
3290, DOE granted the portion of FME’s
Application seeking FTA export
authorization.4 In that order issued on
May 24, 2013, DOE/FE authorized FME
to export domestically produced LNG
by vessel to FTA nations from the
proposed MPEHTM Port up to the
equivalent of 1,175 Bcf/y of natural gas
for a 30-year term.5 DOE/FE explained
that, although FME’s Application states
that 24 mtpa is ‘‘approximately
equivalent to 1,176 Bcf . . . per year,’’ 6
DOE/FE granted FME’s FTA
authorization in an amount equivalent
to 1,175 Bcf/y of natural gas to retain
consistency with the FTA authorization
granted to MPEH LLC in DOE/FE Order
No. 3220.
FME asserts that any export
authorizations issued to MPEH LLC and
FME are meant to be coincidental rather
than cumulative, and that, before any
exports occur, it will inform DOE/FE as
to how the 24 mtpa of LNG exports will
be allocated between all export
authorizations applicable to the
MPEHTM Port.
Current Application
FME requests authorization to export
domestically produced LNG in an
amount up to of 24 mtpa, which it states
is the equivalent of 1,176 Bcf/y of
natural gas (equal to 3.22 Bcf/day of
natural gas), from the proposed
MPEHTM Port to be located 16 miles
offshore of Louisiana to: (1) Any country
with which the United States currently
has, or in the future will have, a Free
Trade Agreement (FTA) requiring the
national treatment for trade in natural
gas, and (2) as relevant here, any
country with which the United States
does not have an FTA requiring national
See Main Pass Energy Hub, LLC, DOE/FE Order No.
3220, at 9 (‘‘Main Pass is authorized to export
domestically produced LNG by vessel from the
proposed MPEH Deepwater Port . . . up to the
equivalent of 1,175 Bcf/y of natural gas for a 30-year
term, . . . .’’).
4 Freeport-McMoRan Energy LLC, DOE/FE Order
No. 3290, Order Granting Long-Term Multi-Contract
Authorization to Export Liquefied Natural Gas By
Vessel from the Proposed Main Pass Energy HubTM
Deepwater Port 16 Miles Offshore Of Louisiana to
Free Trade Agreement Nations (May 24, 2013).
5 Id. at 10. The authority to regulate the import
and export of natural gas, including liquefied
natural gas, under section 3 of the NGA (15 U.S.C.
717b) was delegated to the Assistant Secretary for
FE in Redelegation Order No. 00–002.04E, issued
on April 29, 2011.
6 FME App. at 1.
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treatment for trade in natural gas (nonFTA countries) with which trade is not
prohibited by U.S. law or policy.
FME seeks authorization to export the
LNG for a 30-year term, commencing on
the earlier of the date of first export or
10 years from the date the authorization
is issued. FME requests this
authorization both on its behalf and as
agent for other parties who hold title to
the LNG at the time of export. FME
states that it will comply with all DOE/
FE requirements for exports and agents,
as established in Freeport LNG
Development, L.P. and FLNG
Liquefaction, LLC, DOE/FE Order No.
2913, including the registration
requirements.7 FME further states that,
when acting as agent, it will register
with DOE/FE each LNG title holder for
which FME seeks to export LNG as
agent.
The portion of FME’s Application that
seeks authorization to export
domestically produced LNG to non-FTA
countries will be reviewed pursuant to
NGA section 3(a), 15 U.S.C. 717b(a), and
is the subject of this Notice. As stated
above, DOE/FE already granted the
portion of FME’s Application that
sought authorization to export the same
quantity of domestically produced LNG
to FTA countries pursuant to NGA
section 3(c).
FME states that the MPEHTM Port will
export natural gas available in the U.S.
natural gas supply and transmission
system. FME states that the sources of
natural gas will include the vast
supplies of natural gas available from
the Gulf Coast producing regions,
including onshore and offshore
resources. FME further states that the
proposed MPEHTM Port has the
potential to access nine major natural
gas pipelines, with indirect access to the
entire national gas pipeline grid. The
MPEHTM Port will draw gas from the
domestic market through a pipeline
connecting the offshore facilities to the
onshore interstate pipeline network and
from off-shore gathering and
transmission systems in the Gulf of
Mexico. FME asserts that it holds a
sulphur and salt lease in Block 299,
which it will use to construct salt-dome
storage caverns to store natural gas prior
to liquefaction. FME states that the
natural gas intake at the MPEHTM Port
will not exceed 4 Bcf/d.
FME states that the MPEHTM Port will
be strategically located on the OCS,
which it characterizes as a prolific and
highly productive area. According to
7 Freeport LNG Development, L.P. and FLNG
Liquefaction, LLC, DOE/FE Order No. 2913, Order
Granting Long-Term Authorization to Export
Liquefied Natural Gas from Freeport LNG Terminal
to Free Trade Nations (Feb. 10, 2011).
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FME, its parent company (MMR
Exploration Co.) is one of the largest
acreage holders on the OCS and is
engaged in exploration and
development activities with the
potential to unlock more than 100
trillion cubic feet of natural gas over a
200-mile area in the shallow waters of
the Gulf of Mexico and onshore
Louisiana.8 FME contends that the
onshore and offshore resources available
to the MPEHTM Port through its
numerous potential pipeline
interconnections will provide more than
sufficient gas quantities to support the
proposed LNG exports over the term of
the requested authorization. FME
further notes that, given the size of
traditional gas resources in close
proximity to the proposed MPEHTM
Port, as well as rapid growth of gas
resources in the region, FME’s
customers will have a diverse, reliable
choice of gas supplies from the most
liquid natural gas market in the world.
FME asserts that the long-term
authorization requested in this
Application is necessary to permit it to
incur the substantial capital and other
costs of developing the MPEHTM Port
and to secure customer contracts. FME
states that terms for the use of the
liquefaction and other offshore
deepwater port facilities will be set forth
in agreements with customers of the
MPEHTM Port.
As explained below, FME states that
this Application will include a complete
environmental review of the proposed
MPEHTM Port. The U.S. Maritime
Administration (MARAD), in
coordination with the U.S. Coast Guard,
will act as the lead agency for
environmental review of the proposed
MPEHTM Port, with DOE acting as a
cooperating agency. FME asks that DOE/
FE issue the export authorization
conditioned on MARAD’s completion of
the environmental review and approval
of the facility construction.
Finally, FME asks that DOE/FE
consider the Application separately
from the processing parameters
established for non-FTA applications
before the Deepwater Port Act of 1974
was amended in December 20, 2012.9
FME states that it had been in
discussions with MARAD about the
proposed MPEHTM Port project since
8 FME notes that exports of natural gas directly
from the OCS may be subject to the requirements
of the Outercontinental Shelf Lands Act, 43 U.S.C.
1354(b), and states that FME would conduct any
such activities in compliance with those
requirements.
9 The Deepwater Port Act of 1974, 33 U.S.C. 1501
et seq., was amended in December 2012 to allow
exports of oil and gas to occur from offshore
facilities in waters of the United States.
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July 2012, and submitted to MARAD a
Letter of Intent to Submit Application
on October 3, 2012. According to FME,
MARAD’s jurisdiction to license an LNG
export facility under the Deepwater Port
Act was not clear before that Act was
amended on December 20, 2012. FME
further states that, following discussions
with DOE/FE, FME was unable to
submit a non-FTA application until the
amendments were enacted. Therefore,
FME contends that it should not be
subject to the previously established
processing parameters.
Public Interest Considerations
FME states that its proposed non-FTA
authorization should be granted by
DOE/FE because it is not inconsistent
with the public interest, as set forth in
NGA section 3(a). FME quotes DOE/FE
in stating that, ‘‘ ‘Section 3(a) of the
NGA creates a rebuttable presumption
that proposed exports of natural gas are
in the public interest, and [that] DOE
must grant such an application unless
those who oppose the application
overcome that presumption.’ ’’ 10 FME
states that DOE/FE, in evaluating the
public interest pursuant to its Policy
Guidelines and Delegation Orders
Relating to the Regulation of Imported
Natural Gas, examines whether
‘‘‘domestic supply shortages or domestic
security needs overcome the statutory
presumption that a proposed export is
not inconsistent with the public
interest.’ ’’ 11 FME states that, although
the Policy Guidelines address imports of
natural gas, DOE/FE has found that the
same principles apply to exports.12
FME asserts that the main focus of
DOE/FE’s public interest analysis has
been the projected domestic need for the
gas to be exported. FME states that,
during the period of the export
authorization requested by FME, U.S.
reserves and recoverable resources will
be far in excess of total gas demand.
FME further asserts that multiple,
independent analyses, including that of
Navigant Consulting, Inc. and Deloitte
MarketPoint, have concluded that
exports will not cause a significant
increase in domestic natural gas prices.
10 FME App. at 8 (quoting Sabine Pass
Liquefaction, LLC, DOE/FE Order No. 2961,
Opinion and Order Conditionally Granting LongTerm Authorization to Export Liquefied Natural Gas
From Sabine Pass LNG Terminal to Non-Free Trade
Agreement Nations (May 20, 2011), at 28).
11 Id. at 9 (quoting Sabine Pass Liquefaction, LLC,
FE Docket 10–111–LNG, Opinion and Order
Denying Request for Review Under Section 3(c) of
the NGA, at 5 (Oct. 21, 2010) & Policy Guidelines
and Delegation Orders Relating to the Regulation of
Imported Natural Gas, 49 FR 6,684 (Feb.22, 1984).
12 Id. (citing, e.g., Phillips Alaska Natural Gas
Corp. and Marathon Oil Co., DOE/FE Order No.
1473 at 14).
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Therefore, FME maintains that its
requested export authorization will not
have a detrimental impact on the
domestic supply of natural gas and is
not inconsistent with the public
interest.
Addressing domestic natural gas
supply, FME contends that the U.S.
natural gas supply is more than
adequate to meet both the future U.S.
domestic demand and FME’s proposed
export volumes over the term of the
requested authorization. FME discusses
the impact of increased shale
production on domestic supply, stating
that dry gas production in 2013 is
expected to be 24 Trillion Cubic Feet
(Tcf), a 13 percent increase from 2010.13
Addressing domestic natural gas
demand, FME states that U.S. natural
gas available for supply far exceeds
demand. According to FME, EIA
estimates that domestic natural gas
demand will grow from 25.63 Tcf per
year in 2012 to 28.71 Tcf per year in
2035, and that cumulative domestic gas
consumption from 2012 through 2035
will be 643 Tcf.14
FME states that its requested export
authorization would increase demand
by a maximum of 1.46 Tcf per year.
FME recognizes that other applications
to export domestic LNG are pending
before DOE and additional applicants
may seek export authorization. As noted
above, FME also observes that a number
of groups—including Navigant, Deloitte,
and the Brookings Energy Security
Initiative—have considered the
cumulative effects of LNG exports on
natural gas demand and pricing.
Focusing on the Navigant study, FME
states that Navigant considered two
scenarios of relevance to FME’s
Application: an ‘‘Aggregate Exports
Case’’ and a ‘‘High Demand Base Case.’’
The Aggregate Exports Case assumes a
total of 7.7 Bcf per day of LNG exports,
split between Gulf Coast exports (4.7
Bcf/day), Pacific Coast exports (2.5 Bcf/
day), and Atlantic Coast (0.5 Bcf/day)—
an assumption that could reflect the
proposed MPEHTM Port operating at full
capacity. The High Demand Base Case
assumes a total of 7.2 Bcf/day of LNG
exports (excluding the Atlantic Coast
exports), but includes increased
domestic demand for natural gas, such
as through natural gas vehicles.15 FME
13 U.S. Energy Information Administration,
Annual Energy Outlook 2013 Early Release (Jan.
2013), available at https://www.eia.doe.gov/
forecasts/aeo/tables.ref.cfm (EIA Outlook 2013
Early Release).
14 EIA Outlook 2013 Early Release.
15 Navigant Consulting, Inc., Southern LNG
Export Project Market Analysis Study, included as
App. A to the Application of Southern LNG
Company, L.L.C. for Long-Term, Multi-Contract
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notes Navigant’s conclusion that LNG
exports would have a mild stimulating
effect on U.S. natural gas production.
Under the Aggregate Exports Case and
High Demand Base Case, FME states
that U.S. gas supply would increase
slightly more than would be expected
without exports.
FME states that Deloitte also prepared
a study that considered a number of
export scenarios, including exports of
1.33 Bcf/day, 3 Bcf/day, 6 Bcf/day, 9
Bcf/day, and 12 Bcf/day.16 FME asserts
that the analyses from Navigant and
Deloitte are applicable to the proposed
MPEHTM Port because the Port will be
located near traditional and shale
reserves in the Gulf of Mexico in a
location where other projects are being
considered.
Taking into account these studies and
EIA data, FME maintains that: (1) The
United States has more than enough
supply to support domestic gas needs
and proposed LNG export volumes, and
(2) natural gas producers will be able to
anticipate new demand and ramp up
production in advance, such that the
commencement of LNG exports will not
shock the market.
Turning to potential impacts on U.S.
natural gas market prices, FME contends
that the effect of LNG exports on natural
gas prices will be limited. As support
for this position, FME cites analyses
performed by EIA, Navigant, and
Deloitte. FME concludes that potential
increases in natural gas prices resulting
from LNG exports are not large enough,
and are sufficiently offset by several
resulting benefits (such as limiting
volatility in the market), so as not to
merit a determination that the MPEHTM
Port is not in the public interest.
FME next asserts that the requested
authorization will benefit local,
regional, and national economies and is
therefore in the public interest. FME
quotes the LNG export study conducted
by NERA, which concluded that ‘‘ ‘the
U.S. would experience net economic
benefits from increased LNG exports’ ’’
and that ‘‘ ‘U.S. economic welfare
consistently increases as the volume of
natural gas exports increased.’ ’’ 17
Among other economic benefits, FME
states that the requested authorization
Authorization to Export Liquefied Natural Gas to
Non-Free Trade Agreement Countries submitted in
FE Docket No. 12–100–LNG on August 31, 2012
(Navigant Study), at 40.
16 Deloitte MarketPoint, Analysis of Economic
Impact of LNG Exports from the United States,
included as App. F to the Application for LongTerm, Multi-Contract Authorization to Export
Liquefied Natural Gas to Non-Free Trade
Agreement Countries submitted by Excelerate
Liquefaction Solutions I, LLC in FE Docket No.
12–146–LNG on October 5, 2012 (Deloitte Study).
17 FME App. at 20 (quoting NERA study at 6).
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would result in the creation of new jobs
and would be consistent with President
Obama’s National Export Initiative
signed in 2010.18 FME states that,
during the five-year build phase, it is
estimated that the proposed MPEHTM
Port will create about 3,000 to 4,000
jobs. Upon full operation, the Port will
employ approximately 250 to 500
people on-site. According to FME, a
corollary to the creation of these jobs
will be the additional taxes paid by the
MPEHTM Port and associated workforce.
FME further states that granting the
authorization would positively impact
the U.S. balance of trade. FME asserts
that, in 2011, the U.S. trade deficit was
$559.9 billion—an increase of $65.1
billion from the 2010 figure.19 FME
states that, depending on the price of
gas, exports from the MPEHTM Port
could reduce the trade imbalance by
approximately $12 billion per year. FME
observes that DOE/FE, in approving
export applications, has acknowledged
the positive impact that LNG exports
can have on the balance of trade with
destination countries.20
Additionally, FME explains that, in
processing natural gas in preparation for
exports, it will derive ethane, propane,
and other liquids condensate for sale,
which will further help the U.S. balance
of trade by increasing domestic supply
and thus reducing imports. FME states
that, in DOE/FE Order No. 2961,
DOE/FE found that a facility exporting
803 Bcf of gas per year would produce
46.7 million barrels per year of liquids
and improve the trade balance by $1.7
billion annually.21 FME states that the
MPEHTM Port, by analogy, should
produce 68.3 million barrels of liquids
and improve the balance of trade by
approximately $2.5 billion annually by
offsetting imports. FME states that these
domestically produced natural gas
liquids will be of particular benefit to
chemical manufacturers that use these
liquids as chemical feedstocks.22
Additionally, FME asserts that the
requested authorization is consistent
with U.S. obligations under the General
Agreement on Tariffs and Trade
(GATT), would promote free and open
18 Exec. Order No. 13534, 75 FR 12,433 (Mar. 11,
2010).
19 Bureau of Economic Analysis, U.S. Department
of Commerce, U.S. International Trade in Goods
and Services, (Oct. 11, 2012), available at https://
www.bea.gov/newsreleases/international/trade/
trad_time_series.xls.
20 FME App. at 23 n.68 (citing DOE/FE orders).
21 Sabine Pass Liquefaction, LLC, DOE/FE Order
No. 2961, at 35.
22 FME App. at 23 (citing Michael Levi, A
Strategy for U.S. Natural Gas Exports, prepared for
The Hamilton Project, at 25 (June 2012), available
at https://www.brookings.edu/research/papers/2012/
06/13-exports-levi (Hamilton Study)).
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
34087
trade, and could have wider geopolitical
benefits.
Finally, in addition to providing
economic benefits, FME states that LNG
exports can have significant
environmental benefits. FME contends
that natural gas is cleaner burning than
other fossil fuels, such as coal-fired
generation.
Additional details can be found in
FME’s Application, which is posted on
the DOE/FE Web site at: https://
www.fossil.energy.gov/programs/
gasregulation/authorizations/
2013_applications/13_26_lng_fta.pdf.
Environmental Impact
According to FME, MARAD
previously approved an earlier form of
the MPEHTM Port as a deepwater port
for the importation and regasification of
LNG, the conditioning of natural gas to
produce natural gas liquids, and the
storage of natural gas in salt caverns.
FME states that, as part of MARAD’s
approval process, the MPEHTM LNG
import project underwent an extensive
analysis under the National
Environmental Policy Act (NEPA), 42
U.S.C. 431 et seq., including preparation
of an Environmental Impact Statement
and a review by several other federal
agencies including the U.S. Coast
Guard, the U.S. Environmental
Protection Agency, the U.S. Army Corps
of Engineers, among others. FME states
that this analysis resulted in a favorable
Record of Decision by MARAD in
January 2007.23
In connection with this Application,
FME states that MARAD, in
coordination with the U.S. Coast Guard,
will act as the lead agency for
environmental review, with DOE acting
as a cooperating agency. FME asserts
that it initiated discussions with
MARAD in October 2012 about
developing an application for the
proposed MPEHTM Port. FME states that
it is currently performing scoping
studies to determine which federal,
state, or local agencies need to be
involved and the additional studies that
need to be performed in conjunction
with the construction of the proposed
MPEHTM Port, including the FLVs. FME
requests that DOE/FE issue this export
authorization conditioned on MARAD’s
completion of the NEPA review and
approval of the facility construction.
FME states that the DOE/FE routinely
issues orders with such a condition.24
23 FME App. at 3 n.1 (citing Docket entry 371.
USCG–2004–17696–371.).
24 FME App. at 26 n.80 (citing DOE/FE orders).
E:\FR\FM\06JNN1.SGM
06JNN1
34088
Federal Register / Vol. 78, No. 109 / Thursday, June 6, 2013 / Notices
DOE/FE Evaluation
The Application will be reviewed
pursuant to section 3(a) of the NGA, 15
U.S.C. 717b(a), and the authority
contained in DOE Delegation Order No.
00–002.00L (April 29, 2011) and DOE
Redelegation Order No. 00–002.04E
(April 29, 2011). In reviewing this LNG
export Application, DOE will consider
any issues required by law or policy. To
the extent determined to be relevant or
appropriate, these issues will include
the impact of LNG exports associated
with this Application, and the
cumulative impact of any other
application(s) previously approved, on
domestic need for the gas proposed for
export, adequacy of domestic natural
gas supply, U.S. energy security, and
any other issues, including the impact
on the U.S. economy (GDP), consumers,
and industry, job creation, U.S. balance
of trade, international considerations,
and whether the arrangement is
consistent with DOE’s policy of
promoting competition in the
marketplace by allowing commercial
parties to freely negotiate their own
trade arrangements. Parties that may
oppose this Application should address
these issues in their comments and/or
protests, as well as any other issues
deemed relevant to the Application.
NEPA requires DOE to give
appropriate consideration to the
environmental effects of its proposed
decisions. No final decision will be
issued in this proceeding until DOE has
met its environmental responsibilities.
Due to the complexity of the issues
raised by the Applicant, interested
persons will be provided 60 days from
the date of publication of this Notice in
which to submit comments, protests,
motions to intervene, notices of
intervention, or motions for additional
procedures.
mstockstill on DSK4VPTVN1PROD with NOTICES
Public Comment Procedures
In response to this Notice, any person
may file a protest, comments, or a
motion to intervene or notice of
intervention, as applicable. Any person
wishing to become a party to the
proceeding must file a motion to
intervene or notice of intervention, as
applicable. The filing of comments or a
protest with respect to the Application
will not serve to make the commenter or
protestant a party to the proceeding,
although protests and comments
received from persons who are not
parties will be considered in
determining the appropriate action to be
taken on the Application. All protests,
comments, motions to intervene, or
notices of intervention must meet the
VerDate Mar<15>2010
17:35 Jun 05, 2013
Jkt 229001
requirements specified by the
regulations in 10 CFR Part 590.
Filings may be submitted using one of
the following methods: (1) emailing the
filing to fergas@hq.doe.gov with FE
Docket No. 13–26–LNG in the title line;
(2) mailing an original and three paper
copies of the filing to the Office 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 filings
must include a reference to FE Docket
No. 13–26–LNG.
A decisional record on the
Application will be developed through
responses to this notice by parties,
including the parties’ written comments
and replies thereto. Additional
procedures will be used as necessary to
achieve a complete understanding of the
facts and issues. A party seeking
intervention may request that additional
procedures be provided, such as
additional written comments, an oral
presentation, a conference, or trial-type
hearing. Any request to file additional
written comments should explain why
they are necessary. Any request for an
oral presentation should identify the
substantial question of fact, law, or
policy at issue, show that it is material
and relevant to a decision in the
proceeding, and demonstrate why an
oral presentation is needed. Any request
for a conference should demonstrate
why the conference would materially
advance the proceeding. Any request for
a trial-type hearing must show that there
are factual issues genuinely in dispute
that are relevant and material to a
decision, and that a trial-type hearing is
necessary for a full and true disclosure
of the facts.
If an additional procedure is
scheduled, notice will be provided to all
parties. If no party requests additional
procedures, a final Opinion and Order
may be issued based on the official
record, including the Application and
responses filed by parties pursuant to
this notice, in accordance with 10 CFR
590.316.
The Application 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. The
Application and any filed protests,
motions to intervene or notice of
interventions, and comments will also
be available electronically by going to
the following DOE/FE Web address:
PO 00000
Frm 00058
Fmt 4703
Sfmt 4703
https://www.fe.doe.gov/programs/
gasregulation/.
Issued in Washington, DC, on May 31,
2013.
John A. Anderson,
Manager, Natural Gas Regulatory Activities,
Office of Oil and Gas Global Security and
Supply, Office of Fossil Energy.
[FR Doc. 2013–13418 Filed 6–5–13; 8:45 am]
BILLING CODE 6450–01–P
DEPARTMENT OF ENERGY
Biological and Environmental
Research Advisory Committee
Office of Science, Department
of Energy.
ACTION: Notice of Open Meeting.
AGENCY:
This notice announces a
meeting of the Biological and
Environmental Research Advisory
Committee (BERAC). The Federal
Advisory Committee Act (Pub. L. 92–
463, 86 Stat. 770) requires that public
notice of these meetings be announced
in the Federal Register.
DATES: Thursday, June 27, 2013; 8:30
a.m. to 5:00 p.m. Friday, June 28, 2013;
8:30 a.m. to 12:00 p.m.
ADDRESSES: Gaithersburg Marriott
Washingtonian Center, 9751
Washingtonian Boulevard, Gaithersburg,
Maryland 20878.
FOR FURTHER INFORMATION CONTACT: Dr.
David Thomassen, Designated Federal
Officer, U.S. Department of Energy,
Office of Science, Office of Biological
and Environmental Research, SC–23/
Germantown Building, 1000
Independence Avenue SW, Washington,
DC 20585–1290. Phone 301–903–9817;
fax (301) 903–5051 or email:
david.thomassen@science.doe.gov. The
most current information concerning
this meeting can be found on the Web
site: https://science.energy.gov/ber/
berac/meetings/.
SUPPLEMENTARY INFORMATION:
Purpose of the Meeting: To provide
advice on a continuing basis to the
Director, Office of Science of the
Department of Energy, on the many
complex scientific and technical issues
that arise in the development and
implementation of the Biological and
Environmental Research Program.
SUMMARY:
Tentative Agenda Topics
• Report from the Office of Biological
and Environmental Research
• News from the Biological Systems
Science and Climate and
Environmental Sciences Divisions
• Discussion of the Office of Science
Digital Data Policy
E:\FR\FM\06JNN1.SGM
06JNN1
Agencies
[Federal Register Volume 78, Number 109 (Thursday, June 6, 2013)]
[Notices]
[Pages 34084-34088]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-13418]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF ENERGY
[FE Docket No. 13-26-LNG]
Freeport-McMoRan Energy LLC; Application for Long-Term
Authorization To Export Liquefied Natural Gas Produced From Domestic
Natural Gas Resources to Non-Free Trade Agreement Countries for a 30-
Year Period
AGENCY: Office of Fossil Energy, DOE.
ACTION: Notice of application.
-----------------------------------------------------------------------
SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy
(DOE) gives notice of receipt of an application (Application) filed on
February 22, 2013, by Freeport-McMoRan Energy LLC (FME), requesting
long-term, multi-contract authorization to export liquefied natural gas
(LNG) produced from domestic sources in an amount up to 24 million
metric tons per year (mtpa), which FME states is equivalent to
approximately 1,176 billion cubic feet per year (Bcf/y) of natural gas,
or 3.2 Bcf per day (Bcf/d).\1\ FME seeks authorization to export the
LNG for a 30-year term from the proposed Main Pass Energy
HubTM Deepwater Port (MPEHTM Port), to be located
in federal waters in Main Pass Block 299, 16 miles offshore of
Louisiana. In the portion of FME's Application subject to this Notice,
FME requests authorization to export LNG to any country with which the
United States does not have a free trade agreement (FTA) requiring
national treatment for trade in natural gas (non-FTA countries) with
which trade is not prohibited by U.S. law or policy. FME requests that
this authorization commence on the earlier of the date of first export
or 10 years from the date the authorization is granted. FME requests
this authorization both on its behalf and as agent for other parties
who hold title to the LNG at the time of export. The Application was
filed under section 3 of the Natural Gas Act (NGA), 15 U.S.C. 717b.
---------------------------------------------------------------------------
\1\ Applicants are required to provide volumes of natural gas in
Bcf, 10 CFR 590.202(b)(1), and therefore DOE/FE will address FME's
requested authorization in Bcf/y below.
DATES: Protests, motions to intervene or notices of intervention, as
applicable, requests for additional procedures, and written comments
are to be filed using procedures detailed in the Public Comment
Procedures section no later than 4:30 p.m., eastern time, August 5,
---------------------------------------------------------------------------
2013.
ADDRESSES: Electronic Filing by email: fergas@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: Larine Moore or Marc Talbert, 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) 586-9478;
(202) 586-7991.
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 Avenue SW., Washington, DC 20585, (202)
586-3397.
SUPPLEMENTARY INFORMATION:
Background
FME, a subsidiary of McMoRan Exploration Co., is a Delaware limited
liability company with its principal place of business in New Orleans,
Louisiana. FME is also an initial member of Main Pass Energy Hub LLC
(MPEH LLC), which is a Delaware limited liability company with its
principal place of business in New Orleans, Louisiana. The other
initial member of MPEH LLC is United LNG, LLC, a Delaware limited
liability company.
FME is requesting this authorization to export LNG from the
MPEHTM Port, currently owned by FME. FME and United LNG, LP
are parties to a Memorandum of Understanding (MOU) concerning the
commercial development of the MPEHTM Port. United LNG, LP is
a Texas limited partnership with its principal place of business in
Houston, Texas. After execution of the MOU, MPEH LLC was formed.
FME states that the MPEHTM Port is proposed to be
located in approximately 210 feet of water at a deepwater site in
[[Page 34085]]
the Gulf of Mexico on the Outer Continental Shelf (OCS) of the United
States, approximately 16 miles offshore from southeast Louisiana at
Main Pass Block 299 (Block 299).\2\ FME states that the
MPEHTM Port will be configured to receive, store, condition,
and liquefy domestic natural gas for export as LNG. Construction of the
MPEHTM Port will include modification of existing offshore
structures currently owned by FME; construction of new facilities and
salt dome storage caverns; and construction, installation, and
operation of floating liquefaction storage and offloading vessels
(FLVs) to be used for the on-site liquefaction and exportation of LNG
from the MPEHTM Port.
---------------------------------------------------------------------------
\2\ According to FME, this site is located at latitude
29[deg]15'56'' and longitude 88[deg]45'34''.
---------------------------------------------------------------------------
According to FME, the MPEHTM Port will utilize five
large existing interconnected platforms and three smaller satellite
platforms. FME states that these platforms will house the gas
conditioning facilities, gas metering facilities, quarters for on-site
employees, and gas storage and compression equipment. FME further
states that, in addition to the platform-based facilities, the
MPEHTM Port will consist of six FLVs, each capable of
producing up to 4 mtpa of LNG, for a total production capacity at the
MPEHTM Port of 24 mtpa of LNG. FME states that each FLV will
be moored using a buoy system and will be capable of liquefying 537
million cubic feet per day of natural gas, storing 200,000 cubic meters
of LNG, and delivering LNG to off-taking LNG carriers utilizing a ship-
to-ship process.
According to FME, the amount of LNG sought to be exported from the
MPEHTM Port in the current Application is the same amount
for which FME's affiliate MPEH LLC obtained an export authorization in
January 2013, in DOE/FE Docket No. 12-114-LNG. Specifically, in DOE/FE
Order No. 3220, DOE/FE authorized MPEH LLC to export from the
MPEHTM Port up to 1,175 Bcf/y of natural gas (which MPEH LLC
stated was the equivalent of the requested 24 mtpa of LNG) to any
country with which the United States currently has, or in the future
will have, a FTA requiring the national treatment for trade in natural
gas, pursuant to section 3(c) of the Natural Gas Act (NGA), 15 U.S.C.
717b(c).\3\ In the current Application, FME requests both FTA and non-
FTA authorizations for the same quantity of LNG, stating that only 24
mtpa of LNG will be exported in any year from the proposed
MPEHTM Port (which DOE/FE notes is equivalent to 1,175 Bcf/y
of natural gas).
---------------------------------------------------------------------------
\3\ Main Pass Energy Hub, LLC, DOE/FE Order No. 3220, Order
Granting Long-Term Multi-Contract Authorization to Export Liquefied
Natural Gas by Vessel from the MPEH Deepwater Port Located 16 miles
Offshore the Louisiana Coast in Federal Waters to Free Trade
Agreement Nations (Jan. 4, 2013). In the Main Pass application, MPEH
LLC stated that 24 mtpa was equal to 1,175 Bcf/y of natural gas and,
on that basis, DOE/FE granted export authorization to MPEH LLC in
that amount. See Main Pass Energy Hub, LLC, DOE/FE Order No. 3220,
at 9 (``Main Pass is authorized to export domestically produced LNG
by vessel from the proposed MPEH Deepwater Port . . . up to the
equivalent of 1,175 Bcf/y of natural gas for a 30-year term, . . .
.'').
---------------------------------------------------------------------------
Subsequently, in DOE/FE Order No. 3290, DOE granted the portion of
FME's Application seeking FTA export authorization.\4\ In that order
issued on May 24, 2013, DOE/FE authorized FME to export domestically
produced LNG by vessel to FTA nations from the proposed
MPEHTM Port up to the equivalent of 1,175 Bcf/y of natural
gas for a 30-year term.\5\ DOE/FE explained that, although FME's
Application states that 24 mtpa is ``approximately equivalent to 1,176
Bcf . . . per year,'' \6\ DOE/FE granted FME's FTA authorization in an
amount equivalent to 1,175 Bcf/y of natural gas to retain consistency
with the FTA authorization granted to MPEH LLC in DOE/FE Order No.
3220.
---------------------------------------------------------------------------
\4\ Freeport-McMoRan Energy LLC, DOE/FE Order No. 3290, Order
Granting Long-Term Multi-Contract Authorization to Export Liquefied
Natural Gas By Vessel from the Proposed Main Pass Energy
HubTM Deepwater Port 16 Miles Offshore Of Louisiana to
Free Trade Agreement Nations (May 24, 2013).
\5\ Id. at 10. The authority to regulate the import and export
of natural gas, including liquefied natural gas, under section 3 of
the NGA (15 U.S.C. 717b) was delegated to the Assistant Secretary
for FE in Redelegation Order No. 00-002.04E, issued on April 29,
2011.
\6\ FME App. at 1.
---------------------------------------------------------------------------
FME asserts that any export authorizations issued to MPEH LLC and
FME are meant to be coincidental rather than cumulative, and that,
before any exports occur, it will inform DOE/FE as to how the 24 mtpa
of LNG exports will be allocated between all export authorizations
applicable to the MPEHTM Port.
Current Application
FME requests authorization to export domestically produced LNG in
an amount up to of 24 mtpa, which it states is the equivalent of 1,176
Bcf/y of natural gas (equal to 3.22 Bcf/day of natural gas), from the
proposed MPEHTM Port to be located 16 miles offshore of
Louisiana to: (1) Any country with which the United States currently
has, or in the future will have, a Free Trade Agreement (FTA) requiring
the national treatment for trade in natural gas, and (2) as relevant
here, any country with which the United States does not have an FTA
requiring national treatment for trade in natural gas (non-FTA
countries) with which trade is not prohibited by U.S. law or policy.
FME seeks authorization to export the LNG for a 30-year term,
commencing on the earlier of the date of first export or 10 years from
the date the authorization is issued. FME requests this authorization
both on its behalf and as agent for other parties who hold title to the
LNG at the time of export. FME states that it will comply with all DOE/
FE requirements for exports and agents, as established in Freeport LNG
Development, L.P. and FLNG Liquefaction, LLC, DOE/FE Order No. 2913,
including the registration requirements.\7\ FME further states that,
when acting as agent, it will register with DOE/FE each LNG title
holder for which FME seeks to export LNG as agent.
---------------------------------------------------------------------------
\7\ Freeport LNG Development, L.P. and FLNG Liquefaction, LLC,
DOE/FE Order No. 2913, Order Granting Long-Term Authorization to
Export Liquefied Natural Gas from Freeport LNG Terminal to Free
Trade Nations (Feb. 10, 2011).
---------------------------------------------------------------------------
The portion of FME's Application that seeks authorization to export
domestically produced LNG to non-FTA countries will be reviewed
pursuant to NGA section 3(a), 15 U.S.C. 717b(a), and is the subject of
this Notice. As stated above, DOE/FE already granted the portion of
FME's Application that sought authorization to export the same quantity
of domestically produced LNG to FTA countries pursuant to NGA section
3(c).
FME states that the MPEHTM Port will export natural gas
available in the U.S. natural gas supply and transmission system. FME
states that the sources of natural gas will include the vast supplies
of natural gas available from the Gulf Coast producing regions,
including onshore and offshore resources. FME further states that the
proposed MPEHTM Port has the potential to access nine major
natural gas pipelines, with indirect access to the entire national gas
pipeline grid. The MPEHTM Port will draw gas from the
domestic market through a pipeline connecting the offshore facilities
to the onshore interstate pipeline network and from off-shore gathering
and transmission systems in the Gulf of Mexico. FME asserts that it
holds a sulphur and salt lease in Block 299, which it will use to
construct salt-dome storage caverns to store natural gas prior to
liquefaction. FME states that the natural gas intake at the
MPEHTM Port will not exceed 4 Bcf/d.
FME states that the MPEHTM Port will be strategically
located on the OCS, which it characterizes as a prolific and highly
productive area. According to
[[Page 34086]]
FME, its parent company (MMR Exploration Co.) is one of the largest
acreage holders on the OCS and is engaged in exploration and
development activities with the potential to unlock more than 100
trillion cubic feet of natural gas over a 200-mile area in the shallow
waters of the Gulf of Mexico and onshore Louisiana.\8\ FME contends
that the onshore and offshore resources available to the
MPEHTM Port through its numerous potential pipeline
interconnections will provide more than sufficient gas quantities to
support the proposed LNG exports over the term of the requested
authorization. FME further notes that, given the size of traditional
gas resources in close proximity to the proposed MPEHTM
Port, as well as rapid growth of gas resources in the region, FME's
customers will have a diverse, reliable choice of gas supplies from the
most liquid natural gas market in the world.
---------------------------------------------------------------------------
\8\ FME notes that exports of natural gas directly from the OCS
may be subject to the requirements of the Outercontinental Shelf
Lands Act, 43 U.S.C. 1354(b), and states that FME would conduct any
such activities in compliance with those requirements.
---------------------------------------------------------------------------
FME asserts that the long-term authorization requested in this
Application is necessary to permit it to incur the substantial capital
and other costs of developing the MPEHTM Port and to secure
customer contracts. FME states that terms for the use of the
liquefaction and other offshore deepwater port facilities will be set
forth in agreements with customers of the MPEHTM Port.
As explained below, FME states that this Application will include a
complete environmental review of the proposed MPEHTM Port.
The U.S. Maritime Administration (MARAD), in coordination with the U.S.
Coast Guard, will act as the lead agency for environmental review of
the proposed MPEHTM Port, with DOE acting as a cooperating
agency. FME asks that DOE/FE issue the export authorization conditioned
on MARAD's completion of the environmental review and approval of the
facility construction.
Finally, FME asks that DOE/FE consider the Application separately
from the processing parameters established for non-FTA applications
before the Deepwater Port Act of 1974 was amended in December 20,
2012.\9\ FME states that it had been in discussions with MARAD about
the proposed MPEHTM Port project since July 2012, and
submitted to MARAD a Letter of Intent to Submit Application on October
3, 2012. According to FME, MARAD's jurisdiction to license an LNG
export facility under the Deepwater Port Act was not clear before that
Act was amended on December 20, 2012. FME further states that,
following discussions with DOE/FE, FME was unable to submit a non-FTA
application until the amendments were enacted. Therefore, FME contends
that it should not be subject to the previously established processing
parameters.
---------------------------------------------------------------------------
\9\ The Deepwater Port Act of 1974, 33 U.S.C. 1501 et seq., was
amended in December 2012 to allow exports of oil and gas to occur
from offshore facilities in waters of the United States.
---------------------------------------------------------------------------
Public Interest Considerations
FME states that its proposed non-FTA authorization should be
granted by DOE/FE because it is not inconsistent with the public
interest, as set forth in NGA section 3(a). FME quotes DOE/FE in
stating that, `` `Section 3(a) of the NGA creates a rebuttable
presumption that proposed exports of natural gas are in the public
interest, and [that] DOE must grant such an application unless those
who oppose the application overcome that presumption.' '' \10\ FME
states that DOE/FE, in evaluating the public interest pursuant to its
Policy Guidelines and Delegation Orders Relating to the Regulation of
Imported Natural Gas, examines whether ```domestic supply shortages or
domestic security needs overcome the statutory presumption that a
proposed export is not inconsistent with the public interest.' '' \11\
FME states that, although the Policy Guidelines address imports of
natural gas, DOE/FE has found that the same principles apply to
exports.\12\
---------------------------------------------------------------------------
\10\ FME App. at 8 (quoting Sabine Pass Liquefaction, LLC, DOE/
FE Order No. 2961, Opinion and Order Conditionally Granting Long-
Term Authorization to Export Liquefied Natural Gas From Sabine Pass
LNG Terminal to Non-Free Trade Agreement Nations (May 20, 2011), at
28).
\11\ Id. at 9 (quoting Sabine Pass Liquefaction, LLC, FE Docket
10-111-LNG, Opinion and Order Denying Request for Review Under
Section 3(c) of the NGA, at 5 (Oct. 21, 2010) & Policy Guidelines
and Delegation Orders Relating to the Regulation of Imported Natural
Gas, 49 FR 6,684 (Feb.22, 1984).
\12\ Id. (citing, e.g., Phillips Alaska Natural Gas Corp. and
Marathon Oil Co., DOE/FE Order No. 1473 at 14).
---------------------------------------------------------------------------
FME asserts that the main focus of DOE/FE's public interest
analysis has been the projected domestic need for the gas to be
exported. FME states that, during the period of the export
authorization requested by FME, U.S. reserves and recoverable resources
will be far in excess of total gas demand. FME further asserts that
multiple, independent analyses, including that of Navigant Consulting,
Inc. and Deloitte MarketPoint, have concluded that exports will not
cause a significant increase in domestic natural gas prices. Therefore,
FME maintains that its requested export authorization will not have a
detrimental impact on the domestic supply of natural gas and is not
inconsistent with the public interest.
Addressing domestic natural gas supply, FME contends that the U.S.
natural gas supply is more than adequate to meet both the future U.S.
domestic demand and FME's proposed export volumes over the term of the
requested authorization. FME discusses the impact of increased shale
production on domestic supply, stating that dry gas production in 2013
is expected to be 24 Trillion Cubic Feet (Tcf), a 13 percent increase
from 2010.\13\
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\13\ U.S. Energy Information Administration, Annual Energy
Outlook 2013 Early Release (Jan. 2013), available at https://www.eia.doe.gov/forecasts/aeo/tables.ref.cfm (EIA Outlook 2013 Early
Release).
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Addressing domestic natural gas demand, FME states that U.S.
natural gas available for supply far exceeds demand. According to FME,
EIA estimates that domestic natural gas demand will grow from 25.63 Tcf
per year in 2012 to 28.71 Tcf per year in 2035, and that cumulative
domestic gas consumption from 2012 through 2035 will be 643 Tcf.\14\
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\14\ EIA Outlook 2013 Early Release.
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FME states that its requested export authorization would increase
demand by a maximum of 1.46 Tcf per year. FME recognizes that other
applications to export domestic LNG are pending before DOE and
additional applicants may seek export authorization. As noted above,
FME also observes that a number of groups--including Navigant,
Deloitte, and the Brookings Energy Security Initiative--have considered
the cumulative effects of LNG exports on natural gas demand and
pricing.
Focusing on the Navigant study, FME states that Navigant considered
two scenarios of relevance to FME's Application: an ``Aggregate Exports
Case'' and a ``High Demand Base Case.'' The Aggregate Exports Case
assumes a total of 7.7 Bcf per day of LNG exports, split between Gulf
Coast exports (4.7 Bcf/day), Pacific Coast exports (2.5 Bcf/day), and
Atlantic Coast (0.5 Bcf/day)--an assumption that could reflect the
proposed MPEHTM Port operating at full capacity. The High
Demand Base Case assumes a total of 7.2 Bcf/day of LNG exports
(excluding the Atlantic Coast exports), but includes increased domestic
demand for natural gas, such as through natural gas vehicles.\15\ FME
[[Page 34087]]
notes Navigant's conclusion that LNG exports would have a mild
stimulating effect on U.S. natural gas production. Under the Aggregate
Exports Case and High Demand Base Case, FME states that U.S. gas supply
would increase slightly more than would be expected without exports.
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\15\ Navigant Consulting, Inc., Southern LNG Export Project
Market Analysis Study, included as App. A to the Application of
Southern LNG Company, L.L.C. for Long-Term, Multi-Contract
Authorization to Export Liquefied Natural Gas to Non-Free Trade
Agreement Countries submitted in FE Docket No. 12-100-LNG on August
31, 2012 (Navigant Study), at 40.
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FME states that Deloitte also prepared a study that considered a
number of export scenarios, including exports of 1.33 Bcf/day, 3 Bcf/
day, 6 Bcf/day, 9 Bcf/day, and 12 Bcf/day.\16\ FME asserts that the
analyses from Navigant and Deloitte are applicable to the proposed
MPEHTM Port because the Port will be located near
traditional and shale reserves in the Gulf of Mexico in a location
where other projects are being considered.
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\16\ Deloitte MarketPoint, Analysis of Economic Impact of LNG
Exports from the United States, included as App. F to the
Application for Long-Term, Multi-Contract Authorization to Export
Liquefied Natural Gas to Non-Free Trade Agreement Countries
submitted by Excelerate Liquefaction Solutions I, LLC in FE Docket
No. 12-146-LNG on October 5, 2012 (Deloitte Study).
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Taking into account these studies and EIA data, FME maintains that:
(1) The United States has more than enough supply to support domestic
gas needs and proposed LNG export volumes, and (2) natural gas
producers will be able to anticipate new demand and ramp up production
in advance, such that the commencement of LNG exports will not shock
the market.
Turning to potential impacts on U.S. natural gas market prices, FME
contends that the effect of LNG exports on natural gas prices will be
limited. As support for this position, FME cites analyses performed by
EIA, Navigant, and Deloitte. FME concludes that potential increases in
natural gas prices resulting from LNG exports are not large enough, and
are sufficiently offset by several resulting benefits (such as limiting
volatility in the market), so as not to merit a determination that the
MPEHTM Port is not in the public interest.
FME next asserts that the requested authorization will benefit
local, regional, and national economies and is therefore in the public
interest. FME quotes the LNG export study conducted by NERA, which
concluded that `` `the U.S. would experience net economic benefits from
increased LNG exports' '' and that `` `U.S. economic welfare
consistently increases as the volume of natural gas exports increased.'
'' \17\
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\17\ FME App. at 20 (quoting NERA study at 6).
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Among other economic benefits, FME states that the requested
authorization would result in the creation of new jobs and would be
consistent with President Obama's National Export Initiative signed in
2010.\18\ FME states that, during the five-year build phase, it is
estimated that the proposed MPEHTM Port will create about
3,000 to 4,000 jobs. Upon full operation, the Port will employ
approximately 250 to 500 people on-site. According to FME, a corollary
to the creation of these jobs will be the additional taxes paid by the
MPEHTM Port and associated workforce.
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\18\ Exec. Order No. 13534, 75 FR 12,433 (Mar. 11, 2010).
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FME further states that granting the authorization would positively
impact the U.S. balance of trade. FME asserts that, in 2011, the U.S.
trade deficit was $559.9 billion--an increase of $65.1 billion from the
2010 figure.\19\ FME states that, depending on the price of gas,
exports from the MPEHTM Port could reduce the trade
imbalance by approximately $12 billion per year. FME observes that DOE/
FE, in approving export applications, has acknowledged the positive
impact that LNG exports can have on the balance of trade with
destination countries.\20\
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\19\ Bureau of Economic Analysis, U.S. Department of Commerce,
U.S. International Trade in Goods and Services, (Oct. 11, 2012),
available at https://www.bea.gov/newsreleases/international/trade/trad_time_series.xls.
\20\ FME App. at 23 n.68 (citing DOE/FE orders).
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Additionally, FME explains that, in processing natural gas in
preparation for exports, it will derive ethane, propane, and other
liquids condensate for sale, which will further help the U.S. balance
of trade by increasing domestic supply and thus reducing imports. FME
states that, in DOE/FE Order No. 2961, DOE/FE found that a facility
exporting 803 Bcf of gas per year would produce 46.7 million barrels
per year of liquids and improve the trade balance by $1.7 billion
annually.\21\ FME states that the MPEHTM Port, by analogy,
should produce 68.3 million barrels of liquids and improve the balance
of trade by approximately $2.5 billion annually by offsetting imports.
FME states that these domestically produced natural gas liquids will be
of particular benefit to chemical manufacturers that use these liquids
as chemical feedstocks.\22\
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\21\ Sabine Pass Liquefaction, LLC, DOE/FE Order No. 2961, at
35.
\22\ FME App. at 23 (citing Michael Levi, A Strategy for U.S.
Natural Gas Exports, prepared for The Hamilton Project, at 25 (June
2012), available at https://www.brookings.edu/research/papers/2012/06/13-exports-levi (Hamilton Study)).
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Additionally, FME asserts that the requested authorization is
consistent with U.S. obligations under the General Agreement on Tariffs
and Trade (GATT), would promote free and open trade, and could have
wider geopolitical benefits.
Finally, in addition to providing economic benefits, FME states
that LNG exports can have significant environmental benefits. FME
contends that natural gas is cleaner burning than other fossil fuels,
such as coal-fired generation.
Additional details can be found in FME's Application, which is
posted on the DOE/FE Web site at: https://www.fossil.energy.gov/programs/gasregulation/authorizations/2013_applications/13_26_lng_fta.pdf.
Environmental Impact
According to FME, MARAD previously approved an earlier form of the
MPEHTM Port as a deepwater port for the importation and
regasification of LNG, the conditioning of natural gas to produce
natural gas liquids, and the storage of natural gas in salt caverns.
FME states that, as part of MARAD's approval process, the
MPEHTM LNG import project underwent an extensive analysis
under the National Environmental Policy Act (NEPA), 42 U.S.C. 431 et
seq., including preparation of an Environmental Impact Statement and a
review by several other federal agencies including the U.S. Coast
Guard, the U.S. Environmental Protection Agency, the U.S. Army Corps of
Engineers, among others. FME states that this analysis resulted in a
favorable Record of Decision by MARAD in January 2007.\23\
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\23\ FME App. at 3 n.1 (citing Docket entry 371. USCG-2004-
17696-371.).
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In connection with this Application, FME states that MARAD, in
coordination with the U.S. Coast Guard, will act as the lead agency for
environmental review, with DOE acting as a cooperating agency. FME
asserts that it initiated discussions with MARAD in October 2012 about
developing an application for the proposed MPEHTM Port. FME
states that it is currently performing scoping studies to determine
which federal, state, or local agencies need to be involved and the
additional studies that need to be performed in conjunction with the
construction of the proposed MPEHTM Port, including the
FLVs. FME requests that DOE/FE issue this export authorization
conditioned on MARAD's completion of the NEPA review and approval of
the facility construction. FME states that the DOE/FE routinely issues
orders with such a condition.\24\
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\24\ FME App. at 26 n.80 (citing DOE/FE orders).
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[[Page 34088]]
DOE/FE Evaluation
The Application will be reviewed pursuant to section 3(a) of the
NGA, 15 U.S.C. 717b(a), and the authority contained in DOE Delegation
Order No. 00-002.00L (April 29, 2011) and DOE Redelegation Order No.
00-002.04E (April 29, 2011). In reviewing this LNG export Application,
DOE will consider any issues required by law or policy. To the extent
determined to be relevant or appropriate, these issues will include the
impact of LNG exports associated with this Application, and the
cumulative impact of any other application(s) previously approved, on
domestic need for the gas proposed for export, adequacy of domestic
natural gas supply, U.S. energy security, and any other issues,
including the impact on the U.S. economy (GDP), consumers, and
industry, job creation, U.S. balance of trade, international
considerations, and whether the arrangement is consistent with DOE's
policy of promoting competition in the marketplace by allowing
commercial parties to freely negotiate their own trade arrangements.
Parties that may oppose this Application should address these issues in
their comments and/or protests, as well as any other issues deemed
relevant to the Application.
NEPA requires DOE to give appropriate consideration to the
environmental effects of its proposed decisions. No final decision will
be issued in this proceeding until DOE has met its environmental
responsibilities.
Due to the complexity of the issues raised by the Applicant,
interested persons will be provided 60 days from the date of
publication of this Notice in which to submit comments, protests,
motions to intervene, notices of intervention, or motions for
additional procedures.
Public Comment Procedures
In response to this Notice, any person may file a protest,
comments, or a motion to intervene or notice of intervention, as
applicable. Any person wishing to become a party to the proceeding must
file a motion to intervene or notice of intervention, as applicable.
The filing of comments or a protest with respect to the Application
will not serve to make the commenter or protestant a party to the
proceeding, although protests and comments received from persons who
are not parties will be considered in determining the appropriate
action to be taken on the Application. All protests, comments, motions
to intervene, or notices of intervention must meet the requirements
specified by the regulations in 10 CFR Part 590.
Filings may be submitted using one of the following methods: (1)
emailing the filing to fergas@hq.doe.gov with FE Docket No. 13-26-LNG
in the title line; (2) mailing an original and three paper copies of
the filing to the Office 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 filings
must include a reference to FE Docket No. 13-26-LNG.
A decisional record on the Application will be developed through
responses to this notice by parties, including the parties' written
comments and replies thereto. Additional procedures will be used as
necessary to achieve a complete understanding of the facts and issues.
A party seeking intervention may request that additional procedures be
provided, such as additional written comments, an oral presentation, a
conference, or trial-type hearing. Any request to file additional
written comments should explain why they are necessary. Any request for
an oral presentation should identify the substantial question of fact,
law, or policy at issue, show that it is material and relevant to a
decision in the proceeding, and demonstrate why an oral presentation is
needed. Any request for a conference should demonstrate why the
conference would materially advance the proceeding. Any request for a
trial-type hearing must show that there are factual issues genuinely in
dispute that are relevant and material to a decision, and that a trial-
type hearing is necessary for a full and true disclosure of the facts.
If an additional procedure is scheduled, notice will be provided to
all parties. If no party requests additional procedures, a final
Opinion and Order may be issued based on the official record, including
the Application and responses filed by parties pursuant to this notice,
in accordance with 10 CFR 590.316.
The Application 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. The Application and any filed
protests, motions to intervene or notice of interventions, and comments
will also be available electronically by going to the following DOE/FE
Web address: https://www.fe.doe.gov/programs/gasregulation/.
Issued in Washington, DC, on May 31, 2013.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2013-13418 Filed 6-5-13; 8:45 am]
BILLING CODE 6450-01-P