The customers of at least 91 public gas systems in Louisiana are among the people, businesses and manufacturers who could be affected by exports of liquefied natural gas.
Filings with the U.S. Department of Energy’s Office of Fossil Energy show critics of such exports include the American Public Gas Association in Washington, D.C., and the Sierra Club, of San Francisco.
The APGA is concerned that LNG exports, much of it going through facilities under construction in Louisiana, could dramatically increase the cost of natural gas in this country.
The Sierra Club is concerned that worldwide demand for the nation’s LNG could increase environmental damage from fracturing, referred to as “fracking,” of shale deposits.
Supporters of LNG exports include the American Petroleum Institute and dozens of companies either seeking or holding export permits. Many of those companies hope to send huge shipments of the fuel and feedstock to non-Free Trade Agreement countries in Asia and other parts of the world at much higher prices than they would receive in the U.S.
Some of the U.S. firms already authorized to export LNG are receiving billions of dollars in investments from foreign power companies and other entities that need LNG for fuel, federal records show.
API and companies hoping to ship LNG overseas contend Sierra Club members are mistaken about their environmental concerns. API and the LNG companies also say APGA overestimates the possibility that LNG exports could trigger a big increase in the price of natural gas in this country.
Meanwhile, Louisiana towns and parishes from Sicily Island in the north to Grand Isle in the south would be affected by any dramatic price swings for natural gas. The same would be true for Vernon Parish Gas District No. 1 in the west and places as far east as Abita Springs.
In the Baton Rouge area, there are public gas systems in Denham Springs, Port Allen, Gonzales and the towns of Livingston, Zachary and Donaldsonville, according to the APGA. There also are East Baton Rouge Parish Gas Utility District No. 1 and Livingston Parish Gas District No. 1.
In Rapides Parish, Alexandria last year was listed by APGA as operator of the nation’s 88th-largest municipal gas system in terms of throughput volume.
Public gas systems in this state are represented by the Louisiana Municipal Gas Authority. Telephone requests for comment from the authority were not returned.
Dan Borné is president of the Louisiana Chemical Association, whose member companies use natural gas as feedstock to manufacture their products.
Borné said a majority of the association’s members are solidly for free trade across the globe but acknowledged, “We’ve got guys on both sides of the map.”
Natural gas producers, Borné said, “are telling me there’s plenty enough to go around. They say the amount of gas we have in this country is astronomical.”
That’s reassuring to association members, Borné said, before he added that those members “also watch our feedstock base closely.”
Attorneys for the APGA’s 700 members told Department of Energy officials in September that LNG exports “will increase domestic natural gas prices, burdening households and jeopardizing potential growth in the U.S. manufacturing sector.”
Attorney William T. Miller and APGA Executive Vice President David Schryver also argued LNG exports could slow “the nation’s transition away from more environmentally damaging fossil fuels,” including coal and fuel oil.
Earlier, attorneys for the 600-member American Petroleum Institute noted that the Department of Energy had ruled in favor of an export permit application from Freeport-McMoRan Energy LLC. That company has not yet begun to build its offshore LNG port and liquefaction plant 16 miles off the southeastern coast of Louisiana.
Freeport-McMoRan officials estimated that its LNG exports would not increase the nation’s natural gas prices more than 1.7 percent before 2035.
API President and CEO Jack N. Gerard noted the DOE decided the Texas company’s proposed offshore liquefaction, storage and export facility would benefit the nation. Gerard also noted DOE officials concluded opposition to the project lacked evidence of a threat either to the nation’s people or its job-producing companies.
Gerard argued the Department of Energy should ignore the protests of APGA, the Sierra Club or other critics in all other pending permit cases for LNG exports.
“We strongly urge you to approve all pending (non-Free Trade Agreement) LNG export applications without delay,” Gerard wrote DOE officials.
Gerard said such action would be justified “because no intervenor-protester in the remaining proceedings has demonstrated a negative cumulative impact and, therefore, cannot rebut the Natural Gas Act’s presumption that LNG exports are in the public interest.”
Thus far, the Department of Energy has not issued blanket authority for all requests to export LNG to non-Free Trade Agreement nations. It has approved at least 37 requests to export LNG to any of the nation’s 18 Free Trade Agreement partners. DOE also has approved at least eight requests to sell LNG to non-Free Trade Agreement nations that are not on the federal government’s prohibited list.
The American Public Gas Association, however, has not backed away from its position that LNG exports will increase natural gas prices. APGA officials predicted gas price hikes “will impact those consumers without investments or retirement savings, those living paycheck to paycheck or relying on government assistance — in other words, the most needy and most vulnerable in our society.”
Meanwhile, DOE records show construction has begun on five approved LNG export facilities in Louisiana, Texas and Maryland.
In Cameron Parish, Sabine Pass Liquefaction LLC is building an LNG terminal capable of exporting the equivalent of 2.76 billion cubic feet of natural gas per day. Much of that LNG has been contracted for purchase by an arm of Total S.A.
Total’s owners describe it as based in France and as “the fifth-largest publicly traded integrated international oil and gas company in the world.”
Sabine Pass Liquefaction already holds Department of Energy approval to export 2.2 billion cubic feet per day of LNG to any country not on the federal government’s prohibited list.
Cameron LNG, a subsidiary of Sempra Energy, is building its LNG export facility near Hackberry in Cameron Parish. The company won approval from DOE last year to make three huge foreign customers minority partners in the venture.
Cameron retains 50.2 percent ownership of the LNG export operation. Affiliates of French energy giant GDF Suez, Japanese conglomerate Mitsui and Japanese automaker Mitsubishi each own 16.6 percent of the LNG project.
GDF Suez changed its name last month to Engie.
Cameron LNG’s project is expected to produce 1.7 billion cubic feet of LNG per day.
Freeport LNG Expansion LP’s liquefaction plant near Freeport, Texas, is expected to produce more than 1.8 billion cubic feet of LNG daily.
That company, with DOE approval, has sold unspecified minority interests in the four-unit plant venture to companies in Japan and the Cayman islands.
Osaka Gas and Chubu Electric, both of Japan, are providing $1.2 billion, combined, for the project, according to DOE records.
Another $1.3 billion comes from IFM, a Cayman Islands company, which Freeport LNG describes as a global fund manager of nearly $50 billion. Freeport also describes IFM as owned by 30 not-for-profit pension funds “with investments in the United States, Australia and Europe.”