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Department of Energy Approves New LNG Exports from Florida

November 27, 2019
By Duggan Flanakin

The U.S. Department of Energy has authorized Eagle LNG Partners Jacksonville to export up to 0.14 billion cubic feet per day [140 Mcf/d] of domestically produced liquefied natural gas from a proposed LNG to be located along the St. Johns River in Florida.

The U.S. Department of Energy (DOE) has authorized Eagle LNG Partners Jacksonville LLC (Eagle LNG) to export up to 0.14 billion cubic feet per day [140 Mcf/d] of domestically produced liquefied natural gas (LNG) from the proposed Eagle Jacksonville Project to be located along the St. Johns River in Jacksonville, Florida.

DOE’s approval allows the owners, Ferus Natural Gas Fuels, to export relatively small quantities of LNG from the facility to foreign markets, serve the domestic market, and provide LNG as a shipping fuel.

DOE’s order authorizes Eagle LNG to export natural gas by oceangoing vessel or ISO container to any country with which the United States does not have a free trade agreement (FTA) requiring a special provision to allow trade in natural gas, and with which trade is not prohibited by U.S. law or policy.

The Federal Energy Regulatory Commission (FERC) had authorized Eagle LNG to site, construct, and operate the Eagle LNG project on September 19, 2019.

Activists Opposed

The Center for Biological Diversity tried to prevent DOE from approving the Eagle LNG project, arguing the proposed LNG exports would cause “significant environmental harm” to local water quality, species and their habitats, and air quality. The activist group also claimed the project would exacerbate climate change by inducing greater production of natural gas—primarily through hydraulic fracturing of unconventional gas sources—for export, and by providing natural gas for other countries to burn for energy.

The American Petroleum Institute (API) filed a motion in support of the LNG terminal, citing data showing increased LNG exports can create up to 452,300 domestic jobs and support more than $73 billion in domestic economic activity through 2035. API argued adding natural gas supplies to the global gas market will benefit U.S. allies and trading partners by helping to stabilize energy prices and support economic development.

Eagle LNG said it would export to markets in the Caribbean and Central America, which API noted “have the highest electricity costs in the Western Hemisphere.” The API brief stated exports from Eagle LNG will give countries in these regions “a more affordable, reliable, and clean power source for their electricity generation needs.”

‘Innovative LNG Solutions’

DOE’s approval of exports from the Eagle LNG facility will help the company bring its products quickly to market, said Energy Secretary Rick Perry in a press release discussing the approval.

“I am pleased that the Department of Energy was able to efficiently approve Eagle LNG’s export application after the Federal Energy Regulatory Commission approved the project, allowing Eagle LNG to bring their innovative LNG solutions to the market as quickly as possible,” Perry said.

“The small-scale LNG market is an increasingly important energy supply option, and Eagle LNG has been an industry leader in this growing segment of the market,” said Assistant Secretary for Fossil Energy Steven Winberg in DOE’s press release. “This action furthers the [Trump] Administration’s commitment to promoting American energy production which is critical to American workers and the American economy.”

DOE’s order states there are currently 36 final non-FTA authorizations for a cumulative volume of 34.66 Bcf/d in natural gas exports, of which approximately 15 Bcf/d worth are in various stages of operation and construction.

Congress Fails, Administration Acts

The Eagle LNG project approval was granted after Congress failed to pass legislation aimed specifically at authorizing this project. The administration’s decision paves the way for others like it.

In 2017, Sen. Bill Cassidy (R-LA) and others filed the Small Scale LNG Access Act (S. 1981), which reemerged in 2019 as S. 816. In sponsoring the bill, Cassidy said, “Decades-old restrictions on importation and exportation have stalled LNG projects that would benefit Louisiana workers, the economy, and the environment.”

In the face of Congress’s inaction, DOE revised its regulations to reduce the administrative burdens associated with the small-scale natural gas export market and to create more efficient and timely processing for such applications. Simultaneously, DOE clarified its interpretation of what projects qualify as being in the public interest. The changes allowed Eagle LNG to gain DOE’s approval.

Small Projects, Big Impact

Most LNG projects are relatively small, but their impact is large, says Dan Kish, a distinguished senior fellow at the Institute for Energy Research.

“The vast majority of LNG facilities of all kinds in the United States are small, which makes sense because of lower capitalization costs and infrastructure needs, and it adds flexibility and security by diversifying energy infrastructure geographically,” said Kish. “DOE’s approval is very important because it shows the commitment of the Trump administration to push forward its goal of energy dominance to replace the energy dependence we suffered through as a country for 60 years.

“A public law is always preferable, provided one can be passed without too much additional ‘green’ tape to slow or stop projects,” said Kish. “But given the current makeup of the House of Representatives, enabling legislation would be difficult to pass, with the chief opposition being the anti-energy green lobby which believes we should keep all our energy in the ground and yield control over energy to central-government authorities. They seek to stop every project, and will lie, cheat, and steal to get what they want.”

Duggan Flanakin (dflanakin@gmail.com) writes from Austin, Texas.

Official Connections

Sen. Bill Cassidy (R-LA): https://www.cassidy.senate.gov/; https://www.cassidy.senate.gov/contact/

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