[Federal Register Volume 77, Number 171 (Tuesday, September 4, 2012)]
[Notices]
[Pages 53874-53876]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-21690]
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DEPARTMENT OF ENERGY
[FE Docket No. 12-76-LNG]
The Dow Chemical Company; Application for Blanket Authorization
To Export Previously Imported Liquefied Natural Gas on a Short-Term
Basis
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
July 13, 2012, by The Dow Chemical Company (Dow), requesting blanket
authorization to export liquefied natural gas (LNG) that previously had
been imported into the United States from foreign sources in an amount
up to the equivalent of 390 billion cubic feet (Bcf) of natural gas on
a short-term or spot market basis for a two-year period commencing on
October 5, 2012.\1\ Dow seeks authorization to export this LNG from
existing facilities on Quintana Island, Texas, 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. Dow 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.
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\1\ The Dow Chemical Company, DOE/FE Order No. 2859 (October 5,
2010) extends through October 4, 2012.
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, October 4,
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2012.
ADDRESSES: U.S. Department of Energy (FE-34), Office of Oil and Gas
Global Security and Supply, Office of Fossil Energy, Forrestal
Building, Room 3E-042, 1000 Independence Avenue SW., Washington, DC
20585.
FOR FURTHER INFORMATION CONTACT:
Larine Moore or Beverly Howard, U.S. Department of Energy (FE-34),
Office of Oil and Gas Global Security and Supply, Office of Fossil
Energy, Forrestal Building, Room 3E-042, 1000 Independence Avenue SW.,
Washington, DC 20585, (202) 586-9478; (202) 586-9387;
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
Dow is a Delaware corporation with its principal place of business
in Midland, Michigan. Dow is an international chemical and plastics
manufacturing company with operations in a number of U.S. states. Dow
owns and operates a large petrochemical manufacturing facility in
Freeport, Texas, which is in close proximity to the LNG import/export
terminal owned and operated by Freeport LNG Development, L.P. (FLNG) on
Quintana Island, Texas. Dow contracted 0.5 Bcf per day of terminal
capacity from FLNG for a twenty-year period beginning in July 2008.
Dow's petrochemical facility in Freeport has the capability to receive
regasified LNG from the FLNG terminal via several pipelines that extend
directly to the facility.
On April 20, 2012, FE granted Dow blanket authorization to import
and export natural gas from and to Canada and Mexico and to import LNG
from various international sources for a two-year term beginning on
June 1, 2012.\2\ Under the terms of the blanket authorization, the LNG
may be imported to any LNG receiving facility in the United States or
its territories.
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\2\ The Dow Chemical Company, DOE/FE Order No. 3083 (April 20,
2012).
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Current Application
In the instant Application, Dow requests blanket authorization to
export previously imported LNG on a short-term or spot market basis in
an amount up to the equivalent of 390 Bcf of natural gas. Dow further
requests that such authorization extend to LNG supplies imported from
foreign sources to which Dow holds title, as well as to LNG supplies
imported from foreign sources that Dow may export on behalf of other
entities who themselves hold title. .Dow requests authorization to
export this LNG from the FLNG terminal 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 over a two-year period, on a short-
term or spot market basis Dow states that it does not seek
authorization to export domestically-produced natural gas.
Dow states that its interest in renewing its blanket re-export
authorization is driven by its desire to optimize the long-term LNG
terminalling capacity for which it has contracted at the FLNG terminal
and its need for flexibility to respond to periodic changes in domestic
and world markets for natural gas and LNG. Dow desires the flexibility
either to export the imported LNG to other world markets or to have LNG
regasified for sale or use in domestic markets,
[[Page 53875]]
including at Dow's petrochemical facility in Freeport, a decision that
would be based on prevailing market conditions.
Public Interest Considerations
In support of its Application, Dow states that pursuant to section
3 of the NGA, FE is required to authorize natural gas exports to a
foreign country unless there is a finding that such exports ``will not
be consistent with the public interest.'' \3\ Dow states that section 3
thus creates a statutory presumption in favor of a properly framed
export application.\4\ Dow states further that the public interest
determination is guided by DOE Delegation Order No. 0204-111, which
provides that the domestic need for natural gas is the principal factor
to be considered when evaluating an export application.\5\
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\3\ 15 U.S.C. 717b.(a). Natural gas is defined to include LNG in
10 CFR Part 590.102(i).
\4\ Phillips Alaska Natural Gas Corp. and Marathon Oil Co., DOE/
FE Order No. 1473 (2 FE ] 70,317) at 13 (April 2, 1999), citing
Panhandle Producers and Royalty Owners Association v. ERA, 822 F.2d
1105, 1111 (DC Cir. 1987).
\5\ Id at 14.
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As detailed in the Application, Dow states the blanket export
authorization requested by Dow satisfies the public interest standard
for the following reasons. Dow states that the LNG that may be exported
pursuant to the blanket authorization requested in the Application is
not needed to meet domestic demand. Dow states that DOE/FE has issued a
number of blanket authorizations to export previously-imported LNG,
including the one issued to Dow in Order No. 2859, finding that such
LNG is not needed to meet domestic demand for natural gas. In addition,
Dow states that on July 19, 2011, in Order No. 2986, which renewed
FLNG's authorization to export previously imported LNG from its
terminal facilities on Quintana Island, Texas, DOE/FE concluded that
``the evidence of record indicates that Untied States consumers
continue to have access to substantial quantities of natural gas
sufficient to meet domestic demand from multiple other sources at
competitive prices without drawing on the LNG which Freeport LNG seeks
to export.''
Dow further states that granting the requested export authorization
will facilitate the importation of LNG into the United States. Further
details can be found in the Application.
Environmental Impact
Dow asserts that its requested export authorization does not raise
any environmental concerns. Dow states that no new facilities or
modifications to any existing facilities at FLNG's Quintana Island
terminal would be required in order for Dow to export LNG from the
terminal. Dow further states that the environmental impacts of
permitting the exportation of LNG from FLNG's Quintana Island terminal
were already reviewed by DOE/FE in Order No. 2644 \6\ as well as the
granting of authority to others exporting previously imported LNG from
the FLNG terminal. Dow asserts that consequently, the same conclusion
is applicable to this Application insofar as the blanket authorization
requested by Dow is substantially identical to its current blanket
authorization.
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\6\ Freeport LNG Development, L.P., Order No. 2644, June 8, 2009
at p. 12.
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DOE/FE Evaluation
This export 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 domestic need for the gas, as well as any other
issues determined to be appropriate, including 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.
The National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et
seq., 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.
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)
Emailing the filing to [email protected], with FE Docket No. 12-76-LNG
in the title line; (2) mailing an original and three paper copies of
the filing to the Office of Oil and Gas Global Security and Supply at
the address listed in ADDRESSES; or (3) hand delivering an original and
three paper copies of the filing to the Office of Oil and Gas Global
Security and Supply 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 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 Dow is available for inspection and
copying in the Office of Natural Gas Regulatory Activities docket room,
3E-042, 1000 Independence Avenue SW., Washington, DC 20585. The docket
room is open between the hours of 8:00 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:
[[Page 53876]]
http://www.fe.doe.gov/programs/gasregulation/index.html.
Issued in Washington, DC, on August 29, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-21690 Filed 8-31-12; 8:45 am]
BILLING CODE 6450-01-P