[Federal Register Volume 78, Number 54 (Wednesday, March 20, 2013)]
[Notices]
[Pages 17189-17192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-06385]
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DEPARTMENT OF ENERGY
[FE Docket No. 13-04-LNG]
Trunkline LNG Export, 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
January 10, 2013, by Trunkline LNG Export, LLC (TLNG Export),
requesting long-term, multi-contract authorization to export
domestically produced liquefied natural gas (LNG) in an amount up to of
15 million metric tons per annum (mtpa), the equivalent of 730 billion
cubic feet (Bcf) per year (Bcf/y) of natural gas (equal to 2 Bcf/day of
natural gas), from the LNG terminal in Lake Charles, Louisiana (Lake
Charles Terminal). TLNG Export requests this authorization for a 25-
year term commencing on the earlier of the date of first export or 10
years from the date the requested authorization is granted.
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, May 20, 2013.
ADDRESSES:
Electronic Filing by email: [email protected].
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.
[[Page 17190]]
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
TLNG Export is a Delaware limited liability company with its
principal place of business in Houston, Texas. Trunkline LNG Company,
LLC (TLNG), an affiliate of TLNG Export, owns and operates the Lake
Charles LNG Terminal. TLNG Export will own the proposed liquefaction
facility and hold the LNG export authorization. The owners of TLNG and
TLNG Export include Energy Transfer Equity, L.P. (60% owner of both
entities) and Energy Transfer Partners, L.P. (40% owner of both
entities). As such, the existing Lake Charles Terminal, the proposed
liquefaction facility, and the LNG export authorization requested
herein would all be under the same ownership structure.
The Federal Energy Regulatory Commission (FERC) authorized
construction and operation of the Lake Charles Terminal in 1977, with
the original construction completed in July 1981. In 2001, BG LNG
Services, LLC (BGLS) entered into a firm services agreement with TLNG
for the receipt, storage, and vaporization of LNG at the Lake Charles
Terminal. TLNG Export states that, consistent with the firm services
agreement with BGLS, TLNG expanded and enhanced the Terminal through
the construction of additional storage capacity, additional gas-fired
vaporization capacity, an additional marine berth, ambient air
vaporization equipment, and natural gas liquids extraction capability.
TLNG Export further states that the Lake Charles Terminal today has a
firm sustained send-out capacity of 1.8 Bcf/d of natural gas (13.7 mtpa
of LNG); a peak send-out capacity of 2.1 Bcf/d; and four LNG storage
tanks with a combined capacity of approximately 2.7 million barrels
(approximately 9.0 bcf).
The amount of LNG sought to be exported from the Lake Charles
Terminal in the current Application is the same amount for which export
authorization is being sought by Lake Charles Exports, LLC (LCE) in a
separate application filed May 6, 2011, and amended May 26, 2011, in
DOE/FE Docket No. 11-59-LNG.\1\ TLNG Export's Application for export
authority in the current proceeding, therefore, is non-additive to the
LCE export authorization request--that is, TLNG Export is not seeking
to export any additional volumes of LNG from the Lake Charles Terminal
beyond that sought by LCE in Docket No. 11-59-LNG. Instead, TLNG Export
states that it is simply maximizing optionality in order to expand the
potential customer base for LNG exports from the Lake Charles Terminal.
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\1\ On July 22, 2011, the DOE/FE approved that portion of the
application seeking to export LNG to FTA nations. The non-FTA
portion of the application is currently pending. See Lake Charles
Exports, LLC, DOE/FE Order No. 2987 (July 22, 2011).
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TLNG Export states that it, along with TLNG, is currently
developing plans to modify the existing facilities at the Lake Charles
Terminal to permit LNG to be loaded from the terminal's storage tanks
onto vessels berthed at the existing marine facility. TLNG Export
states that it is also developing plans to install liquefaction
facilities that would permit gas to be received by pipeline at the
terminal and liquefied for subsequent export. Thus, on March 30, 2012,
TLNG Export, TLNG, and Trunkline Gas Company, LLC submitted a Request
to Initiate FERC Pre-Filing Review Process in FERC Docket No. PF12-8-
000. TLNG Export states that the FERC issued a letter approving the
request to initiate the pre-filing process on April 6, 2012.\2\
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\2\ Letter re: Approval of Pre-Filing Request, FERC Docket No.
PF12-8-000 (April 6, 2012).
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TLNG Export states that the long-term export authorization sought
in this Application, like that sought in the LCE application, is
necessary in order to permit TLNG Export to proceed to incur the
substantial cost of developing the liquefaction and export project. Any
modifications to the Lake Charles Terminal would be subject to FERC
approval.\3\ TLNG Export states that following the completion of the
project, the Lake Charles Terminal will be able to receive LNG for
import and export or deliver LNG for export, and its peak and sustained
send-out capabilities will not be affected.
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\3\ TLNG Export states that as with all the prior activities at
the Lake Charles Terminal, FERC would only approve any such
modifications once all National Environmental Policy Act
requirements had bee satisfied fully. See e.g. Trunkline LNG
Company, LLC, 100 FERC ] 61,217 (2002), order denying reh'g and
granting authorization under Section 3 of the NGA, 101 FERC ] 61,300
(2002), order denying reh'g, 102 FERC ] 61,306 (2003), order
amending certificate, 105 FERC ] 61,137 (2003).
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TLNG Export states that in order to maximize optionality at the
Lake Charles Terminal to address customer needs, it seeks broader
authority than that sought by LCE. TLNG Export states that LCE
requested authorization to export LNG on its own behalf or as agent for
BGLS.\4\ Here, in addition to entering into long-term natural gas
supply or LNG export contracts, TLNG Export states that it may also
enter into Liquefaction Tolling Agreements (LTA), under which
individual customers who hold title to natural gas will have the right
to deliver that gas to TLNG Export and receive LNG. TLNG Export seeks
to export this LNG on its own behalf and also as agent for third
parties under contracts to be executed on a date that is closer to the
date of first export. TLNG Export contemplates that the title holder at
the point of export \5\ may be TLNG Export or one of TLNG Export's
customers, or another party that has purchased LNG from a customer
pursuant to a long-term contract.
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\4\ The DOE/FE approved that portion of the application seeking
to export LNG to FTA nations. See Lake Charles Exports, LLC, DOE/FE
Order No. 2987 (July 22, 2011).
\5\ ``LNG exports occur when the LNG is delivered to the flange
of the LNG export vessel.'' See Freeport LNG Expansion, L.P. and
FLNG Liquefaction, LLC, DOE/FE Order No. 2913 at n.4 (February 10,
2011); Dow Chemical Company, FE Order No. 2859 at 7 (October 5,
2010).
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TLNG Export requests authorization to register each LNG title
holder for whom TLNG Export seeks to export as agent, with such
registration including a written statement by the title holder
acknowledging and agreeing to comply with all applicable requirements
included by DOE/FE in TLNG Export's authorization, and to include those
requirements in any subsequent purchase or sale agreement entered into
by that title holder. TLNG Export also states that it will file under
seal with DOE/FE any relevant long-term commercial agreements between
TLNG Export and such LNG title holder, including LTAs, once they have
been executed.
TLNG Export states that although both TLNG Export and LCE are
seeking authorization to export LNG from the Lake Charles Terminal,
TLNG Export is separate and apart from LCE and will have no impact on
LCE or its authorization. TLNG Export states that neither TLNG Export
nor its parent companies have a controlling ownership share of LCE.
TLNG will allocate export
[[Page 17191]]
quantities between LCE and TLNG Export to ensure that the total exports
from the Lake Charles Terminal do not exceed the total quantity of
exports authorized for the Lake Charles Terminal, i.e. the total of
exports allocated between LCE and TLNG Export will not exceed 15 mtpa
(approximately 730 Bcf/y).
Current Application
In the instant Application, TLNG Export seeks to export LNG by
vessel from the Lake Charles Terminal 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. TLNG Export seeks to export this LNG on its own behalf and
also as agent for third parties. TLNG Export requests that this
authorization commence on the earlier of the date of first export or 10
years from the date the authorization is issued.
The portion of the Application that seeks authorization to export
domestically produced LNG to non-FTA countries will be reviewed
pursuant to Section 3(a) of the Natural Gas Act as amended and is the
subject of this Notice. The portion of the Application that seeks
authorization to export domestically produced LNG to FTA countries has
been reviewed pursuant to Section 3(c) of the Natural Gas Act, as
amended.\6\
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\6\ On March 7, 2013, the DOE/FE approved that portion of the
application seeking to export LNG to FTA nations in DOE/FE Order No.
3252 in FE Docket No. 13-04-LNG.
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TLNG Export states that the source of the natural gas proposed for
export will come from the United States natural gas pipeline system.
While TLNG Export anticipates that sources of natural gas will include
Texas and Louisiana producing regions and the offshore gulf producing
regions,\7\ it states that the natural gas to be exported may be
produced throughout the United States.
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\7\ Insofar as TLNG Export may seek to export natural gas
produced on the outer continental shelf, the export of such natural
gas may be subject to the Outer Continental Shelf Lands Act, which
in relevant part provides: ``Before any oil or gas subject to this
section may be exported under the requirements and provisions of the
Export Administration Act of 1969, the President shall make and
publish an express finding that such exports will not increase
reliance on imported oil or gas, are in the national interest, and
are in accord with the provisions of the Export Administration Act
of 1969.'' 43 U.S.C. 1354. DOE expresses no opinion regarding the
applicability of this provision of law to export operations which
Trunkline is planning to undertake.
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Public Interest Considerations
TLNG Export states that its proposed non-FTA authorization should
be granted by DOE/FE under Section 3(a) of the NGA. TLNG Export states
that in evaluating the ``public interest'' the DOE/FE, consistent with
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.'' \8\
While the Policy Guidelines deal specifically with imports, the DOE/FE
has found that the principles are applicable to exports.\9\
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\8\ Sabine Section 3(c) Order at 5; Policy Guidelines and
Delegation Orders Relating to the Regulation of Imported Natural
Gas, 49 FR 6,684 (February 22, 1984) (``Policy Guidelines'').
\9\ Phillips Alaska Natural Gas Corp. and Marathon Oil Co., DOE/
FE Order No. 1473 at 14.
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TLNG Export states that in 2012, the DOE commissioned a study by
NERA Economic Consulting on the macroeconomic impacts of LNG exports
from the United States.\10\ TLNG Export states that the NERA Study's
findings are in line with the conclusions of the Deloitte Study \11\
and both support approval of the instant Application to export LNG from
the Lake Charles Terminal. TLNG Export states that the NERA Study
concluded that across all scenarios studied, ``the U.S. was projected
to gain net economic benefits from allowing LNG exports.'' \12\ TLNG
Export states that the NERA Study further concluded that ``for every
one of the market scenarios examined, net economic benefits increased
as the level of LNG exports increased.'' \13\ TLNG Export states that
although the NERA Study found that United States natural gas prices
increase when LNG is exported, ``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.'' \14\
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\10\ NERA Economic Consulting, Macroeconomic Impacts of LNG
Exports from the United States (Dec. 5, 2012), available at http://fossil.energy.gov/programs/gasregulation/LNGStudy.html (``NERA
Study'').
\11\ Deloitte Center for Energy Solutions and Deloitte
MarketPoint LLC, Made in America--The Economic Impact of LNG Exports
from the United States, available at http://www.deloitte.com/view/en_US/us/Services/consulting/9f70dd1cc9324310VgnVCM1000001a56f00aRCRD.htm
\12\ NERA Study at 1.
\13\ Id. The NERA Study noted that ``even with exports reaching
levels greater than 12 Bcf/d and associated higher prices than in
constrained cases, there were net economic benefits from allowing
unlimited exports in all cases.'' See Id. at 6.
\14\ Id. at 2.
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TLNG Export states that the NERA Study also concluded that natural
gas prices in the United States will not rise to the levels observed in
other parts of the world.\15\ TLNG Export states that the NERA Study
found that even in the scenarios where unlimited exports were
permitted, the wellhead price in the United States remained below the
import price in Japan, for example, where the United States sends some
of its exports.\16\
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\15\ Id. 76.
\16\ Id.
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TLNG Export states that both the Deloitte Study and the NERA Study
point to net positive benefits from allowing exports of LNG from the
United States. TLNG Export asserts that LNG exports will not have a
material adverse impact on domestic natural gas prices. TLNG Export
states that, accordingly, the proposed export is not inconsistent with
the public interest. The Application has a more complete discussion of
TLNG Export's public interest analysis.\17\
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\17\ Application at 8-22.
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Environmental Impact
TLNG Export states that presently, the Lake Charles Terminal is
equipped for and authorized only to receive imports of LNG. The
Application indicates that TLNG Export and TLNG will file an
application with FERC for authorization to modify the existing
authorized import facilities for exports, in accordance with NGA
Section 3 and subpart B of part 153 of the Commission's Regulations, 18
CFR 153.4 et seq, and Trunkline will file a concurrent application for
authorization to construct additional pipeline facilities necessary to
provide feed gas to the proposed liquefaction facility with FERC under
NGA Section 7 and part 157 of the Commission's Regulations, 18 CFR part
157.\18\ On March 30, 2012, TLNG Export, TLNG, and Trunkline submitted
a Request to Initiate FERC Pre-Filing Review Process in FERC Docket No.
PF12-8-000. In the Request, TLNG Export, TLNG, and Trunkline indicated
that they plan to file the FERC applications in March 2013. TLNG Export
states that on April 6, 2012, FERC issued a letter approving the
request to initiate the pre-filing process for the liquefaction project
and pipeline facilities.
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\18\ See, e.g., Cameron LNG, LLC, 134 FERC ] 61,049 (2011) (FERC
amends prior NGA Section 3 import authority to add the additional
purpose of exporting LNG).
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Regarding the instant proposed export to non-FTA countries, TLNG
Export
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requests that the DOE/FE issue the export authorization to non-FTA
countries conditioned on the FERC's completion of its NEPA review and
approval of the facility construction. TLNG Export states that DOE/FE
routinely issues orders with such a condition.\19\
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\19\ See e.g., Sabine Pass Liquefaction, LLC, DOE/FE Order No.
2961 at 41 (May 20, 2011); Yukon Pacific Corp., ERA Docket No. 87-
68-LNG, Order No. 350 (November 16, 1989) (``The DOE believes that
energy projects can and must be undertaken consistent with
environmentally acceptable practices. To ensure this result, the DOE
is attaching a condition to the export approval that all aspects of
the export project must be undertaken in accordance with the
appropriate environmental review process and must comply with any
and all preventative and mitigative measures imposed by Federal or
State agencies.''); see also Rochester Gas and Electric Corp., FE
Docket No. 90-05-NG, Order No. 503 (May 16, 1991).
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DOE/FE Evaluation
The Application will be reviewed pursuant to section 3 of the NGA,
as amended, 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 Applicants,
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 [email protected] with FE Docket No. 13-04-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. The filing must include a reference to FE
Docket No. 13-04-LNG; 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. The filing must include
a reference to FE Docket No. 13-04-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 filed by TLNG Export 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: http://www.fe.doe.gov/programs/gasregulation/index.html.
Issued in Washington, DC, on March 14, 2013.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2013-06385 Filed 3-19-13; 8:45 am]
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