Louisiana terminal gets OK to export natgas
The Department of Energy on Tuesday granted conditional approval to a terminal to ship liquefied natural gas abroad, the fourth facility in a year to receive the government's green light that puts the U.S. a step closer to becoming an energy exporter.
After an exhaustive two-year application process, the department touted the economic benefits of the proposed LNG exports from Cameron Parish, La., in its announcement. The hub, being constructed by Cameron LNG, a subsidiary of Sempra Energy, was one of several projects fiercely contested by environmental groups that fear natural gas extraction will contaminate the air and water.
The DoE "has concluded that the opponents of the Cameron Application have not demonstrated that the requested authorization will be inconsistent with the public interest and finds that the exports proposed in this Application are likely to yield net economic benefits to the United States," the agency wrote in its decision.
However, the department said the terminal must clear another environmental review before exports could begin. The facility, located in Hackberry, La, will eventually be able to export up to 12 million tons per year—or about 1.7 billion cubic feet per day—of natural gas, Sempra said in a release.
Cameron Parish is the fourth LNG export site to receive approval in the last year. The department is considering 20 other applications. In a statement, the American Petroleum Institute, a major oil and gas industry group, hailed the decision.
"It's a positive sign for the U.S. economy that the Department of Energy has continued to work through these export applications," said Erik Milito, the institute's director of upstream and industry operations.
"The faster these terminals are approved, the faster Americans can enjoy the full benefits of the U.S. energy revolution brought about by advancements in hydraulic fracturing and horizontal drilling," Milito added.
As the U.S. produces record amounts of fossil fuels, the subject of exporting natural gas has broad implications. Cameron LNG's approval suggests the federal government isn't yet concerned with surging domestic prices, or the potential risk of antagonizing an array of special interest groups opposed to the idea of shipping fossil fuels abroad.
Hydraulic fracturing, or fracking, has led to a boom in unconventional gas development, leading industry participants to predict a surge in jobs and domestic economic growth. But recently, natgas prices have risen to four-year highs, raising questions about how shipping stocks abroad might have negative implications for domestic prices.
Currently, the U.S. still imports far more energy than it exports. However, the amount of fuel it purchases abroad for domestic use has fallen steeply as the energy boom has picked up speed—helping to whittle down the massive trade deficit. In February 2013, total U.S. crude and petroleum imports plunged to their lowest level since 1995, according to data from the Energy Information Administration.
—By CNBC's Javier E. David.