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04 23, 2012 by Platts
As companies rush to win approval to export US LNG, one federal energy regulator is questioning how much time the country has to take advantage of its technological edge that has made domestic gas plentiful and inexpensive.
"One issue that I have been thinking a lot about ... is as all the people rush to put their money into export facilities, how long the technological advantage that the US appears to hold in unconventional gas extraction will last," Cheryl LaFleur, a member of the US Federal Energy Regulatory Commission, said Monday.
Other countries have shale plays, but they do not yet have the infrastructure to access it, she said. While estimates vary as to how long the US will have a technological advantage, LaFleur said, her "experience is that these technological cycles seem to be shorter and shorter as we move forward all the time."
The commissioner's remarks to the Natural Gas Roundtable in Washington came one week after FERC approved construction of the first LNG export facility in the Lower-48 states.
FERC on Monday authorized Cheniere Energy to build facilities to liquefy and export 2.2 Bcf/d of gas from its Sabine Pass import terminal in Louisiana. The company already had approval from the Department of Energy to widely export LNG.
US LNG export proposals have become contentious because some lawmakers, industrial consumers and environmental groups argue that the exports could raise domestic gas prices and boost pollution related to gas extraction.
But LaFleur said she has tried to avoid the politics. "We live in Washington, which I am always aware of because it is new for me. So it is impossible not to read and hear the controversy swirling around a lot of these issues," she said.
"But I think our job is to apply the law that governs us to the facts before us ... and try not to be governed by the swirling winds as much as we can. And that's what we try to do," she said.
The Sabine Pass decision was important in part because it was the first time the commission had looked at the relationship between the FERC and DOE approval process, she said.
"Last week I think we tried to clarify that our public interest determination is as to the facilities and we rely on the DOE's determination as to the commodity export and the balance of trade and so forth," she said. "Whether it is precedential or not, that was the first time we looked at it but it won't be the last time."
But she otherwise downplayed the significance of the decision for other companies that are looking to build export facilities. "The facts of other cases may be different and we will try to continue to keep an open mind and look at each case on its own merits."
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