Opposition To U.S. Exports of LNG Emerge - Platt's

[Hans Laetz, Newsgroup Editor]

Utilities ask FERC to reject proposed exports of US gas as LNG

Washington (Platts)--4Mar2011/448 pm EST/2148 GMT

The American Public Gas Association Friday asked US regulators to
reject Cheniere Energy's proposal to export US-produced natural gas as
LNG.

The trade group, which represents municipally-owned gas distribution
utilities, said in comments to the Federal Energy Regulatory
Commission that the shipments would destabilize US gas prices and
threaten energy security.

"FERC owes a duty to the American people to ensure that US energy
markets function efficiently, not a duty to try to invigorate a global
market for natural gas by encouraging exports of domestically produced
gas," APGA said.

A subsidiary of Cheniere Energy Partners, Sabine Pass has proposed to
build a liquefaction plant to export US gas from its import terminal
in Louisiana. It asked regulators last fall for authorization to ship
up to 803 Bcf/year for 20 years.

The proposal has drawn support from major US gas producers and the
congressional delegations of Louisiana and Oklahoma. In addition to
APGA's filing, the only other opposition has come from the Industrial
Energy Consumers of America, which said exports would raise prices,
hurt manufacturing jobs and threaten energy independence.

APGA said the US should maximize the use of gas instead of exporting
it. It wants gas to play a bigger role as a transportation fuel and
for power generation, for example, to displace the dependence on
petroleum imports and coal.

The group added that Cheniere has overstated the ability of US exports
to transform global markets. While the proposed volume of shipments
might be significant to domestic consumption, it is just a "drop in
the bucket" globally.

"Since international markets are often less liquid, less transparent
and less competitive, divided by national boundaries, and natural gas
commodity prices are often indexed to crude oil, it is far more likely
that exporting natural gas from the United States would tie domestic
commodity prices to international fluctuations rather than tame the
international market," APGA said.

APGA has 700 members in 36 states.

--Meghan Gordon, meghan...@platts.com