The Department of Energy announced a proposed rule Friday that fast-tracks small scale export of natural gas to countries in Central America and South America.
Many of the countries in South America do not generate enough liquified natural gas demand to support the economies of scale required to justify large imports of natural gas. The small-scale natural market has developed as a solution to the lack of demand that limits gas exports to some regions.
“The Trump Administration is focused on finding ways to unleash American energy and providing a reliable and environmentally friendly fuel to our trading partners who face unique energy infrastructure challenges,” Secretary of Energy Rick Perry said in a press statement.
DOE is required to conduct a public interest review before authorizing an export, but the proposed rule allows the agency to fast-track exportation if the amount of gas is no more than 0.14 billion cubic feet per day, and if the proposed export qualifies for a categorical exclusion under National Environmental Policy Act (NEPA) regulations.
Any applications meeting these narrow criteria are considered “small-scale natural gas exports” and are deemed in the public interest under the Natural Gas Act, a rule passed in 1938 introducing price rates for natural gas production.
Energy analysts expect the U.S. to become a net exporter because of a growing amount of exports to Mexico and a decline in imports from Canada. The U.S. became the world’s largest natural gas producer in 2009 after the country surpassed Russia.
Mexico is updating its pipeline infrastructure to make way for future imports from the U.S. The country’s appetite for natural gas has grown rapidly during the last several years, as Mexico’s energy industry expects to increase its natural gas use for electric power generation by about 50 percent over the next five years.
Perry’s decision to institute the rule comes on the heels of the DOE’s study showing natural gas development and green energy production are having a one-two punch against the coal industry.
Most of the country’s coal plants are shuttering because they are unable to compete with cheap natural gas and, to a slightly lesser extent, highly subsidized green energy technology, the DOE noted in a study in August. The agency billed the study as monumental in scope, but the findings dovetail with what most analysts have been saying for several years.
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