[Federal Register Volume 77, Number 36 (Thursday, February 23, 2012)]
[Notices]
[Pages 10732-10736]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-4205]


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DEPARTMENT OF ENERGY

[FE Docket No. 11-162-LNG]


Cameron LNG, LLC; Application for Long-Term Authorization To 
Export Domestically Produced Liquefied Natural Gas to Non-Free Trade 
Agreement Countries for 20 Years

AGENCY: Office of Fossil Energy, DOE.

ACTION: Notice of application.

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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice of receipt of an application (Application), filed on 
December 21, 2011, by Cameron LNG, LLC (Cameron),

[[Page 10733]]

requesting long-term, multi-contract authorization to export up to 12 
million metric tons per annum (mtpa) of domestically produced liquefied 
natural gas (LNG) (equivalent to approximately 620 billion cubic feet 
[Bcf] per year of natural gas) for a 20-year period, commencing on the 
earlier of the date of first export or seven years from the date of 
issuance of the requested authorization. Cameron seeks authorization to 
export LNG from the Cameron LNG Terminal, owned by Cameron, in Cameron 
Parish, Louisiana, to any country (1) with which the United States does 
not have a free trade agreement (FTA) requiring national treatment for 
trade in natural gas, (2) which has or in the future develops the 
capacity to import LNG via ocean-going carrier, and (3) with which 
trade is not prohibited by U.S. law or policy. Cameron is requesting 
this authorization both on its own behalf and as agent for other 
parties who hold title to the LNG at the time of export. The 
Application was filed under section 3 of the Natural Gas Act (NGA). 
Protests, motions to intervene, notices of intervention, and written 
comments are invited.

DATES: Protests, motions to intervene or notices of intervention, as 
applicable, requests for additional procedures, and written comments 
are to be filed using procedures detailed in the Public Comment 
Procedures section no later than 4:30 p.m., eastern time, April 23, 
2012.

ADDRESSES:
    Electronic Filing on the Federal eRulemaking Portal under FE Docket 
No. 11-162-LNG: http://www.regulations.gov.
    Electronic Filing by email: [email protected].
    Regular Mail: U.S. Department of Energy (FE-34), Office of Natural 
Gas Regulatory Activities, Office of Fossil Energy, P.O. Box 44375, 
Washington, DC 20026-4375.
    Hand Delivery or Private Delivery Services (e.g., FedEx, UPS, 
etc.): U.S. Department of Energy (FE-34), Office of Natural Gas 
Regulatory Activities, Office of Fossil Energy, Forrestal Building, 
Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585.

FOR FURTHER INFORMATION CONTACT:
Larine Moore or Lisa Tracy, U.S. Department of Energy (FE-34), Office 
of Natural Gas Regulatory Activities, Office of Fossil Energy, 
Forrestal Building, Room 3E-042, 1000 Independence Avenue SW., 
Washington, DC 20585, (202) 586-9478; (202) 586-4523.
Edward Myers, U.S. Department of Energy, Office of the Assistant 
General Counsel for Electricity and Fossil Energy, Forrestal Building, 
Room 6B-256, 1000 Independence Ave. SW., Washington, DC 20585, (202) 
586-3397.

SUPPLEMENTARY INFORMATION:

Background

    Cameron is a Delaware limited liability company with executive 
offices in San Diego, California. Cameron LNG is a wholly-owned 
indirect subsidiary of Sempra Energy, a publicly-traded corporation. 
Cameron owns and operates the Cameron LNG Terminal (Terminal) in 
Cameron Parish Louisiana.
    In 2003, the Federal Energy Regulatory Commission (FERC) approved 
the construction and operation of the Terminal, authorizing a maximum 
send-out of 1.5 Bcf/d of regasified LNG from the facility to domestic 
markets. In a subsequent order, issued in 2007, the FERC authorized 
Cameron to construct and operate additional facilities expanding the 
maximum send-out capacity to 1.8 Bcf/d.
    Cameron LNG completed construction of the Terminal and placed it 
into service in July 2009. Initially, the Terminal was used for the 
sole purpose of receiving and storing foreign-sourced LNG, regasifying 
it, and sending to out for delivery to domestic markets. In January 
2011, the FERC authorized Cameron to operate the Terminal for the 
additional purpose of exporting LNG, which had been previously 
imported.
    The Terminal has an existing interconnection with Cameron 
Interstate Pipeline LLC (Cameron Interstate), an affiliate of Cameron 
LNG. Cameron Interstate, an interstate pipeline regulated by the FERC, 
consists of a 36.2 mile pipeline connecting the Terminal with five 
other interstate pipelines. These interstate pipelines provide Cameron, 
directly or indirectly, with access to all of the major gas producing 
basins in the Gulf Coast and Midcontinent regions of the United States, 
including areas with recent discoveries of shale gas and other 
unconventional reserves.
    Cameron currently is finalizing the design for natural gas 
processing and liquefaction facilities to receive and liquefy 
domestically produced natural gas at the Terminal for export to foreign 
markets (the ``Project''). Cameron states that its liquefaction Project 
will be integrated with existing facilities at its Terminal. Existing 
facilities at the Terminal presently consist of two marine berths, 
three full containment LNG storage tanks, LNG vaporization systems, and 
associated utilities. Cameron notes that the new facilities proposed as 
part of the Project will include natural gas pre-treatment, 
liquefaction, and export facilities with a capacity of up to 12 mtpa of 
LNG \1\, plus upgrades to the existing equipment and additional 
utilities.
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    \1\ Cameron states that 12 mtpa of LNG is equivalent to 
approximately 1.7 Bcf per day of natural gas.
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    Cameron states that its proposed facilities will permit gas to be 
received by pipeline at the Terminal, where it will be liquefied and 
then loaded from the Terminal's storage tanks onto vessels berthed at 
its existing marine facility. Cameron states that, once operational, 
the terminal will have the capability to (i) liquefy domestically 
produced gas for export, or (ii) import LNG and either re-gasify it for 
delivery to domestic markets or export it to foreign markets. Cameron 
states that the Project will not result in an increase in the number of 
ship transits currently authorized for the Terminal, and that the total 
amount of LNG processed would not exceed the current maximum authorized 
send-out rate of 1.8 Bcf/d.
    Cameron acknowledges that any modifications to the Terminal are 
subject to review and approval by the FERC. Cameron states that it will 
initiate the FERC mandatory pre-filing review process for Phase I of 
the project upon completion of Cameron's initial facility planning and 
design. Cameron anticipates the pre-filing request to FERC will be made 
no later than the second quarter of 2012.

Related Applications and Authorizations

    This Application is the second part of a two-phased authorization 
sought by Cameron to export domestically produced natural gas as LNG 
from the Cameron Terminal. On November 10, 2011, in Docket No. 11-145-
LNG, Cameron submitted an application to DOE/FE requesting authority to 
export domestically produced LNG to those countries with which the 
United States has an FTA or subsequently enters into an FTA requiring 
national treatment for trade in natural gas, provided that the 
destination country has the capacity to import LNG via ocean going 
vessels.\2\ The requested export volume in that application is 
identical to the export

[[Page 10734]]

volume in the current Application of 12 million metric tons of LNG per 
year, equivalent to 620 Bcf/year, or 1.7 Bcf/day of natural gas. The 
Cameron liquefaction facilities would be limited to exports of up to 
the equivalent of 620 Bcf/year of natural gas, including both exports 
to FTA and non-FTA countries. On January 17, 2012, in DOE/FE Order No. 
3059 (FE Docket No. 11-145-LNG), DOE/FE granted Cameron authority to 
export domestically produced LNG from the Terminal to those countries 
with which the United States has an FTA.
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    \2\ The United States currently has free trade agreements 
requiring national treatment for trade in natural gas with 
Australia, Bahrain, Canada, Chile, Dominican Republic, El Salvador, 
Guatemala, Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Peru, 
and Singapore. FTAs with Costa Rica and Israel do not require 
national treatment for trade in natural gas. FTAs with Colombia, 
Panama, and South Korea have been ratified by Congress but have not 
yet taken effect.
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    On December 3, 2010, in DOE/FE Order No. 2885 (Docket No. 10-110-
LNG), FE granted Sempra LNG Marketing, LLC (SLNG), an affiliate of 
Cameron, blanket authorization to export from the Terminal LNG that had 
been previously imported into the United States from foreign sources in 
an amount up to the equivalent of 250 Bcf of natural gas. The Order 
authorizes Cameron to export this LNG to any country with the capacity 
to import LNG via ocean-going carrier and with which trade is not 
prohibited by U.S. law or policy. The authorization in FE Docket No. 
10-110-LNG, which does not permit the export of domestically produced 
LNG, extends from February 1, 2011, through January 31, 2013. On June 
22, 2010, in DOE/FE Order No. 2806 (FE Docket No. 10-66-LNG), FE 
granted SLNG blanket authorization to import to the Terminal LNG from 
various international sources. DOE/FE Order No. 2806 extends from 
September 1, 2010, through August 31, 2012.
    Cameron notes that nothing in its current application to export LNG 
to non-FTA nations is intended to supersede or otherwise modify the 
authorizations granted by DOE to SLNG.

 Current Application

    In the instant Application, Cameron seeks long-term, multi-contract 
authorization to export up to 12 mtpa of domestically produced LNG from 
the Terminal, equivalent to approximately 620 Bcf/year of natural gas 
for a 20-year period, commencing on the earlier of the date of first 
export or seven years from the date the authorization is issued. 
Cameron seeks authorization to export domestically produced LNG to 
countries with which the United States does not have an FTA and with 
which trade is not prohibited by U.S. law or policy.
    Cameron requests authorization to export LNG on its own behalf 
(i.e., holding title to the LNG at the time of export) or by acting as 
agent for others. In the instances where Cameron will act as agent for 
other customers, Cameron states that it will comply with all DOE/FE 
requirements for an exporter or agent. In this regard, Cameron 
referenced DOE/FE Order No. 2913 (Order 2913), issued February 10, 
2011, to Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC, in FE 
Docket No. 10-160-LNG, which approved a proposal by the applicant and 
established procedures to register entities for which the authorization 
holder will act as agent. Cameron also states that it will file with 
DOE/FE any relevant long-term commercial agreements reached with LNG 
title holders on whose behalf the LNG would be exported.
    Cameron states that the long-term authorization requested in this 
Application is necessary in order to permit Cameron to incur the 
substantial costs of developing the Project and secure customer 
contracts. Cameron notes that the contract terms between Cameron and 
its customers will be set forth in one or more long-term service or 
agency agreements. These agreements are expected to run for terms of up 
to 20 years and will run concurrently with Cameron's export 
authorization. Cameron states that is has not yet entered into any of 
these long-term arrangements, but that once executed, Cameron will file 
with DOE/FE any commercial agreements reached with title holders on 
whose behalf Cameron intends to export the LNG.
    Cameron states that the sources of natural gas for the Project will 
include supplies available from the Texas and Louisiana producing 
regions, as well as various unconventional supply areas, such as the 
Barnett, Haynesville, and Eagle Ford shale gas formations. Cameron 
states that their customers will be able to deliver natural gas 
supplies to the Terminal from five interstate pipelines: Florida Gas 
Transmission Company, Transcontinental Gas Pipeline Company, LLC, Texas 
Eastern Transmission Corporation, Tennessee Gas Pipeline Company, and 
Trunkline Gas Company. In addition, Cameron notes that the Terminal is 
in close proximity to the Henry Hub and to 11 other market centers in 
Louisiana and Texas, which will give customers additional options for 
purchasing supplies.
    Cameron notes that in recent orders granting long-term 
authorizations to export LNG, DOE/FE did not require that applicants 
submit transaction-specific contract information with their 
applications, pursuant to Section 590.202(b) of the DOE's regulations. 
Cameron requests that the DOE maintain this same position in the review 
of its Application. Cameron maintains that the submittal of the 
transaction-specific information is only appropriate after a long-term 
contract has been executed.
    Lastly, Cameron requests that DOE/FE issue a conditional order 
authorizing the long-term export of LNG subject to completion of a 
satisfactory environmental review by FERC.

Public Interest Considerations

    In support of its Application, Cameron states that section 3(a) of 
the NGA sets forth the statutory standard for review of this 
Application and creates a rebuttable presumption that proposed exports 
of natural gas are in the public interest. Cameron acknowledges that 
DOE has explained that opponents of an export application must make an 
affirmative showing of inconsistency with the public interest in order 
to overcome the rebuttable presumption favoring export applications. 
Cameron also notes that DOE has repeatedly reaffirmed the continued 
applicability of its policy guidelines and has held that they apply 
equally to export applications though originally written to apply to 
imports. In addition, Cameron highlights that the DOE, guided by its 
Policy Guidelines and DOE Delegation Order No. 0204-111, presumes that 
competitive markets largely free of governmentally-imposed restrictions 
will benefit the public. Cameron also states that DOE has applied 
additional considerations in determining whether proposed exports are 
in the public interest such as: whether the exports will be beneficial 
for regional economies, the extent to which the export will foster 
competition and mitigate trade imbalances with foreign nations, and the 
degree to which the export of LNG would encourage efficient management 
of U.S. domestic natural resources. Cameron contends that the export of 
LNG as proposed in the Application satisfies each of these 
considerations.
    In support of its Application, Cameron submitted the following 
studies: a study on natural gas prices commissioned by Cameron from the 
independent consulting firm of Black & Veatch, and an in-house economic 
impact study prepared by Cameron. In addition, in support of its 
Application, Cameron references numerous studies and reports published 
by the Energy Information Administration (EIA.) Based on these studies, 
Cameron contends that the export of domestically produced LNG, as 
proposed in the Application, is in the public interest for the 
following reasons:
    First, Cameron contends that sufficient reserves now exist to 
satisfy domestic demand as well as the

[[Page 10735]]

proposed LNG exports. Cameron points to the gains in drilling 
productivity and extraction technology enhancements that have enabled 
rapid growth in supplies from unconventional shale formations in the 
United States. In addition, Cameron states that, based on numerous 
studies and reports, the United States has an approximate 90- to 100-
year inventory of recoverable natural gas resources.
    Second, Cameron contends that over the past decade, there has been 
minimal growth in the demand for natural gas in the United States. 
Based on a comparison of actual demand and prices in 2010, along with 
forecasted demand and prices in the year 2025, Cameron contends that 
U.S. natural gas resources are more than sufficient to accommodate both 
domestic demand and the exports proposed in the Application.
    Third, based on the Black & Veatch analysis of the proposed LNG 
export impact on U.S. natural gas prices, Cameron concludes that the 
exports proposed in this Application will have a minimal impact on 
domestic natural gas prices. In addition, Cameron contends that any 
upward pressure on prices due to increased demand for export would 
likely be offset by a reduction in domestic price volatility.
    Fourth, Cameron states that the export of domestically produced LNG 
will provide the following economic benefits, as detailed by its own 
Economic Impact Assessment of the Project:
    A. There will be substantial benefits to the national, regional and 
local economies, including an improvement in the U.S. balance of trade 
of $2.8 billion to nearly $7.1 billion per year, equal to 0.6 to 1.4 
percent of the trade deficit, based on the expected value of the 
exports.
    B. There will be increased exports and international trade based on 
Cameron's estimate that its customers will export an average of 
approximately $8.6 billion of LNG per year. Cameron contends that this 
will have a positive impact on the balance of trade between the United 
States and its international trading partners, and will promote 
liberalization of the global gas market by fostering increased 
liquidity and trade at prices established by market forces.
    C. There will be environmental benefits associated with LNG 
exports. Specifically, the United States will be in a position to 
provide countries with low-carbon natural gas as an alternative to 
higher CO2-emitting fossil fuels such as coal and fuel oil. 
LNG exports from the United States would serve as an interim fuel for 
countries that are in the process of developing their own 
unconventional natural gas resources.
    Further details can be found in the Application, which has been 
posted at http://www.fe.doe.gov/programs/gasregulation/index.html.

Environmental Impact

    Cameron states that in the next several months, it will initiate 
the pre-filing review process at FERC for the proposed Project 
facilities. Cameron anticipates that, consistent with the requirements 
of the National Environment Policy Act (NEPA), FERC will act as the 
lead agency for environmental review, with DOE/FE acting as a 
cooperating agency. Cameron acknowledges that the requested 
authorization to be issued by DOE/FE would not take effect until FERC 
has completed its NEPA review and has granted Cameron authorization for 
the export of domestic LNG from the Cameron facility. Cameron requests 
that DOE/FE issue a conditional order authorizing the export of 
domestic LNG from the Terminal conditioned on completion of a 
satisfactory environmental review and subsequent authorization by FERC.

DOE/FE Evaluation

    The Application will be reviewed pursuant to section 3 of the NGA, 
as amended, and the authority contained in DOE Delegation Order No. 00-
002.00L (April 29, 2011) and DOE Redelegation Order No. 00-002.04E 
(April 29, 2011). In reviewing this LNG export Application, DOE will 
consider any issues required by law or policy. To the extent determined 
to be relevant or appropriate, these issues will include the impact of 
LNG exports associated with this Application, and the cumulative impact 
of any other application(s) previously approved, on domestic need for 
the gas proposed for export, adequacy of domestic natural gas supply, 
U.S. energy security, and any other issues, including the impact on the 
U.S. economy (GDP), consumers, and industry, job creation, U.S. balance 
of trade, international considerations, and whether the arrangement is 
consistent with DOE's policy of promoting competition in the 
marketplace by allowing commercial parties to freely negotiate their 
own trade arrangements. Parties that may oppose this Application should 
comment in their responses on these issues, as well as any other issues 
deemed relevant to the Application.
    NEPA requires DOE to give appropriate consideration to the 
environmental effects of its proposed decisions. No final decision will 
be issued in this proceeding until DOE has met its NEPA 
responsibilities.
    Due to the complexity of the issues raised by the Applicants, 
interested persons will be provided 60 days from the date of 
publication of this Notice in which to submit comments, protests, 
motions to intervene, notices of intervention, or motions for 
additional procedures.

Public Comment Procedures

    In response to this notice, any person may file a protest, 
comments, or a motion to intervene or notice of intervention, as 
applicable. Any person wishing to become a party to the proceeding must 
file a motion to intervene or notice of intervention, as applicable. 
The filing of comments or a protest with respect to the Application 
will not serve to make the commenter or protestant a party to the 
proceeding, although protests and comments received from persons who 
are not parties will be considered in determining the appropriate 
action to be taken on the Application. All protests, comments, motions 
to intervene, or notices of intervention must meet the requirements 
specified by the regulations in 10 CFR part 590.
    Filings may be submitted using one of the following methods: (1) 
Submitting comments in electronic form on the Federal eRulemaking 
Portal at http://www.regulations.gov, by following the on-line 
instructions and submitting such comments under FE Docket No. 11-162-
LNG. DOE/FE suggests that electronic filers carefully review 
information provided in their submissions and include only information 
that is intended to be publicly disclosed; (2) emailing the filing to 
[email protected], with FE Docket No. 11-162-LNG in the title line; (3) 
mailing an original and three paper copies of the filing to the Office 
Natural Gas Regulatory Activities at the address listed in ADDRESSES; 
or (4) hand delivering an original and three paper copies of the filing 
to the Office of Natural Gas Regulatory Activities at the address 
listed in ADDRESSES.
    A decisional record on the Application will be developed through 
responses to this notice by parties, including the parties' written 
comments and replies thereto. Additional procedures will be used as 
necessary to achieve a complete understanding of the facts and issues. 
A party seeking intervention may request that additional procedures be 
provided, such as additional written comments, an oral presentation, a 
conference, or trial-type hearing. Any request to file additional 
written comments should explain why

[[Page 10736]]

they are necessary. Any request for an oral presentation should 
identify the substantial question of fact, law, or policy at issue, 
show that it is material and relevant to a decision in the proceeding, 
and demonstrate why an oral presentation is needed. Any request for a 
conference should demonstrate why the conference would materially 
advance the proceeding. Any request for a trial-type hearing must show 
that there are factual issues genuinely in dispute that are relevant 
and material to a decision and that a trial-type hearing is necessary 
for a full and true disclosure of the facts.
    If an additional procedure is scheduled, notice will be provided to 
all parties. If no party requests additional procedures, a final 
Opinion and Order may be issued based on the official record, including 
the Application and responses filed by parties pursuant to this notice, 
in accordance with 10 CFR 590.316.
    The Application filed by Cameron is available for inspection and 
copying in the Office of Natural Gas Regulatory Activities docket room, 
Room 3E-042, 1000 Independence Avenue SW., Washington, DC 20585. The 
docket room is open between the hours of 8 a.m. and 4:30 p.m., Monday 
through Friday, except Federal holidays. The Application and any filed 
protests, motions to intervene or notice of interventions, and comments 
will also be available electronically by going to the following DOE/FE 
Web address: http://www.fe.doe.gov/programs/gasregulation/index.html. 
In addition, any electronic comments filed will also be available at: 
http://www.regulations.gov.

    Issued in Washington, DC, on February 16, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-4205 Filed 2-22-12; 8:45 am]
BILLING CODE 6450-01-P