Eos LNG 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 25-Year Period, 75337-75339 [2013-29545]

Agencies

• DEPARTMENT OF ENERGY

[Federal Register Volume 78, Number 238 (Wednesday, December 11, 2013)]
[Notices]
[Pages 75337-75339]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-29545]


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DEPARTMENT OF ENERGY

[FE Docket No. 13-116-LNG]


Eos LNG 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 25-Year Period

AGENCY: Office of Fossil Energy, DOE.

ACTION: Notice of application.

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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice of receipt of an application (Application) filed on 
August 23, 2013, by Eos LNG LLC (Eos), requesting long-term, multi-
contract authorization to export LNG produced from domestic sources in 
a volume equivalent to approximately 584 billion cubic feet per year 
(Bcf/yr) of natural gas, or 1.6 Bcf per day (Bcf/d). Eos seeks 
authorization to export the LNG for a 25-year term from the proposed 
Eos LNG Terminal (Project), to be located at the Port of Brownsville in 
Brownsville, Texas. Eos 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. Eos requests that this authorization commence on the earlier of 
the date of first export or 8 years from the date the authorization is 
granted. Eos 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 written comments 
are to be filed using procedures detailed in the Public Comment 
Procedures section no later than 4:30 p.m., eastern time, February 10, 
2014.

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

    Eos is a Delaware limited liability company with its principal 
place of business in Boston, Massachusetts. Eos states that it 
qualifies as an African American minority-owned business. Eos's 
principal executives are Kent Strong, Eza Gadson, and Andrew Kunian. 
Eos states that it has recruited an LNG team to manage logistics and 
commercial operations of the venture.
    Eos proposes to develop, own, and operate a natural gas 
liquefaction facility and LNG export terminal at the Port of 
Brownsville in Brownsville, Texas. The Application includes a copy of a 
signed option agreement between Eos and the Brownsville Navigation 
District for the lease by Eos of a 15 acre tract of land. Eos states 
that the site will be based on a floating liquefaction unit on a barge 
(FLNG) and an existing LNG tanker (utilized solely for storage) that 
are anchored to a dock at the Port of Brownsville. Eos states that LNG 
tankers owned by third parties will be loaded via ship to ship transfer 
from Eos's LNG storage tanker, then will set sail to buyers in Europe 
and Asia. Eos states that the FLNG is an autonomous floating structure 
that does not rely on any shore-based utilities to function. Eos states 
that the FLNG will be constructed in a shipyard and towed to its 
designated site, where it will be integrated with the gas source. Eos 
states that mooring and connection infrastructure requirements 
associated with the FLNG are minimal.

Current Application

    Eos requests that DOE/FE grant a long term (in excess of two 
years), multi-contract authorization to export LNG from export 
terminals to be constructed in Brownsville, Texas to any non-FTA 
country which has developed or in the future develops the capacity to 
import LNG, and with which trade is not prohibited by U.S. law or 
policy. Eos requests this authorization for a volume of LNG equivalent 
to approximately 1.6 Bcf/d of natural gas (584 Bcf/yr) for a 25-year 
term, up to 14.6 trillion cubic feet, beginning on the date of the 
first export or 8 years from the date of issuance of the authorization 
requested by this Application, whichever is sooner.
    Eos states that rather than enter into Liquefaction Tolling 
Agreements (LTAs), its business model will be to buy natural gas at the 
domestic price of the Henry Hub futures contract and sell it 
internationally at the prevailing market rate. However, if the 
profitability of this model declines, Eos states that it will maintain 
the option to convert to an LTA model, under which individual customers 
who hold title to the domestic natural gas will have the right to 
deliver that gas to Eos's terminal and receive LNG in return.
    Eos requests long term, multi-contract authorization to engage in 
exports of LNG on its own behalf or as agent for others. Eos 
contemplates that the title holder at the point of export may be Eos or 
one of Eos's customers, or another party that has purchased LNG from an 
LTA customer pursuant to a long term contract. Eos requests 
authorization to register each LNG title holder for whom Eos seeks to 
export as agent, and proposes that this registration include a written 
statement by the title holder acknowledging and agreeing to comply with 
all applicable requirements included by DOE/FE in Eos's export 
authorization, and to include those requirements in any subsequent 
purchase or sale agreement entered into by that title holder. In 
addition to its registration of any LNG title holder for whom Eos seeks 
to export as agent, Eos states that it will file under seal with DOE/FE 
any relevant long term commercial agreements between Eos and such LNG 
title holder, including LTAs, once they have been executed. Eos states 
that DOE/FE has previously found that this commitment conforms to the 
requirements of 10 CFR 590.202(b), which calls upon applicants to 
supply transaction information ``to the extent practicable.''
    Eos states that the natural gas supply underlying the proposed 
exports will

[[Page 75338]]

come from the interconnected and highly liquid domestic market for 
natural gas. Eos states that while some of the proposed export supply 
may be secured through long term contracts, large volumes are likely to 
be acquired on the spot market. Eos states that the biggest market hub 
in North America, the Henry Hub, is located in southern Louisiana, and 
the Houston Ship Channel and Katy Hub provide flexibility to natural 
gas shippers in Texas. Eos states that it will be able to source the 
gas from these locations. Eos states that, alternatively, it will be 
able to contract directly with exploration and production companies 
such as Chesapeake Energy, Anadarko, Devon Energy, Encana, Southwest 
Energy, EOG Resources, and EQT Resources. Eos anticipates that several 
natural gas basins will supply the Project, including the Permian, 
Eagle Ford, Barnett, Woodford, and Haynesville-Bossier basins. Eos 
states that these basins are served by several pipelines that can 
transfer the natural gas to the Project.
    Eos states that pursuant to the National Environmental Policy Act 
(NEPA), the Federal Energy Regulatory Commission (FERC) will be the 
lead agency for environmental review. Eos requests conditional 
authorization to export LNG from the Project, pending FERC 
authorization to site, construct, and operate it. Eos states that such 
conditional authorizations are routinely issued by DOE/FE, which may 
review an application to determine whether a proposed authorization is 
in the public interest concurrent with FERC's environmental impact 
review. Eos states that it requests that DOE/FE authorize the requested 
export of LNG produced from domestically sourced natural gas 
conditioned upon FERC's authorization of the Project pursuant to NEPA.

Public Interest Considerations

    Eos states that as a result of technological advances, huge 
reserves of domestic shale gas that were previously uneconomic to 
develop are now producing natural gas in many regions of the United 
States. Eos states that the United States is now estimated to have more 
natural gas resources than it can use in a century. Eos states that 
large volumes of domestic shale gas reserves and continued low 
production costs will enable the United States to export LNG while also 
meeting domestic demand for natural gas for decades.
    Eos states that as U.S. natural gas reserves and production have 
risen, U.S. natural gas prices have fallen to the point where they are 
the lowest in the world. Eos states that LNG prices in Asia are indexed 
to crude oil prices and are generally higher than elsewhere in the 
world. Eos states that the lack of international natural gas pipelines 
in Asia means that, from a practical standpoint, the industrialized 
Asian countries, including Japan, Korea, and Taiwan, are dependent upon 
LNG imports for their natural gas supplies. Eos states that while 
Europe receives pipeline gas from various sources, the long supply 
chains and inflexibility of European markets have made diversification 
of supply a high priority. Eos states that competitively priced LNG 
supplies from the United States will play a significant role in this 
diversification. Eos states that domestic natural gas prices in the 
United States are projected to remain low relative to European and 
Asian markets far into the future, making exports of LNG by vessel a 
viable long term opportunity for the United States.
    Eos states that a grant of the Application will serve the public 
interest in several respects. These include: (1) Support to United 
States energy security; (2) significant environmental benefits due to 
substitution of cleaner burning natural gas for coal or oil; (3) direct 
and indirect job creation; (4) significant economic stimulus, including 
growing the tax base and increasing overall economic activity; and (5) 
material improvement in the United States's balance of trade. Eos 
states that these benefits will be obtained with only a minimal effect 
on domestic natural gas prices. Eos states that at current and 
forecasted rates of demand, U.S. natural gas reserves will meet demand 
for 100 years. Eos states that the requested export authorization will 
allow the United States to benefit now from natural gas resources that 
may not otherwise be produced for many decades.
    Finally, Eos asks that, in its review of the Application, DOE/FE 
consider the status of Eos as an African-American minority-owned 
enterprise. Eos refers to Executive Orders 10925 and 11625 in support 
of this request. According to Eos, Executive Order 10925 stated that 
``it is the policy of the executive branch of the Government to 
encourage by positive measures equal opportunity for all qualified 
persons within the Government.'' Eos states that Executive Order 11625 
sought the participation of all Federal departments and agencies in an 
increased minority enterprise effort and directed each Federal 
department and agency to continue all current efforts to foster and 
promote minority business enterprises. In particular, Eos asks that 
DOE/FE consider the adoption by the Federal Communications Commission 
of a policy of granting preferences to minority-owned businesses 
applying for radio and television licenses. This policy, according to 
Eos, was upheld by the Supreme Court in Metro Broadcasting v. FCC, 497 
US 547 (1990).
    Additional details can be found in Eos's Application, which is 
posted on the DOE/FE Web site at: https://www.fossil.energy.gov/
programs/gasregulation/authorizations/2013_applications/EOS_LNG_
LLC__-FE._DK.__-13-116-LNG.html.

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. 00-002.00N (July 11, 2013) and DOE Redelegation Order No. 00-
002.04F (July 11, 2013). 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 the 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 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

[[Page 75339]]

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. 13-116-LNG 
in the title line; (2) mailing an original and three paper copies of 
the filing to the Division 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 filings 
must include a reference to FE Docket No. 13-116-LNG. Please Note: If 
submitting a filing via email, please include all related documents and 
attachments (e.g., exhibits) in the original email correspondence. 
Please do not include any active hyperlinks or password protection in 
any of the documents or attachments related to the filing. All 
electronic filings submitted to DOE must follow these guidelines to 
ensure that all documents are filed in a timely manner. Any hardcopy 
filing submitted greater in length than 50 pages must also include, at 
the time of the filing, a digital copy on disk of the entire 
submission.
    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 
Division 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 December 5, 2013.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2013-29545 Filed 12-10-13; 8:45 am]
BILLING CODE 6450-01-P