[Federal Register Volume 77, Number 174 (Friday, September 7, 2012)]
[Notices]
[Pages 55197-55199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-22088]


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DEPARTMENT OF ENERGY

[FE Docket No. 12-77-LNG]


LNG Development Company, LLC; Application for Long-Term 
Authorization To Export Liquefied Natural Gas Produced From Canadian 
and Domestic Natural Gas Resources to Non-Free Trade Agreement 
Countries for a 25-Year Period

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 16, 2012, by LNG Development Company, LLC (d/b/a Oregon LNG), 
requesting long-term, multi-contract authorization to export up to 9.6 
million tons per annum (mtpa) of liquefied natural gas (LNG), the 
equivalent of 456.25 billion cubic feet (Bcf) of natural gas per year 
or 1.3 Bcf per day (Bcf/d), over a 25-year period, commencing on the 
earlier of the date of first export or eight years from the date the 
requested authorization is granted. The LNG would be exported from the 
proposed LNG terminal to be located in Warrenton, Oregon, in Clatsop 
county, 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 developed 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. The LNG will be produced 
from natural gas imported from Canada into the United States, and to a 
lesser extent, domestically produced natural gas. Oregon LNG is 
requesting this authorization to export LNG both on its own behalf and 
as agent for other parties who hold title to the LNG at the point 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, November 6, 
2012.

ADDRESSES:

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 Marc Talbert, 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) 586-7991.

[[Page 55198]]

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

    Oregon LNG is a Delaware limited liability company with its 
principal place of business in Warrenton, Oregon, and headquarters in 
Vancouver, Washington.
    Oregon LNG states that the Oregon LNG Export Project (Project) is 
proposed to export primarily Canadian-sourced natural gas imported into 
the United States and to a lesser extent supplies of natural gas that 
may be domestically produced. Oregon LNG states the Project will 
convert Oregon LNG's pending import receiving terminal and pipeline 
(Oregon Pipeline) into a bidirectional LNG terminal and pipeline. The 
Oregon Pipeline is being developed by Oregon LNG's affiliate, Oregon 
Pipeline Company, LLC. Oregon LNG states that the Project will 
interconnect with the multi-legged system of Williams Northwest 
Pipeline Company, connecting Pacific Northwest demand centers with 
British Columbian and Rockies supplies. However, Oregon LNG asserts it 
does not expect that the gas feedstock for the Project will be derived 
to any significant degree from Rockies supply given that the market 
modeling commissioned by Oregon LNG demonstrates that Canadian supply 
is the economically preferred resource for the Project.
    Oregon LNG states that unlike the multiple pending applications to 
export domestically produced LNG to non-FTA countries, this Application 
involves a request for authorization to export LNG produced primarily 
from Canadian natural gas resources. Oregon LNG further states that in 
this regard, this Application is akin to applications for authorization 
to export previously imported LNG, which DOE/FE has expeditiously 
granted.\1\ Oregon LNG states that the same rationale applies here.
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    \1\ Citing, ConocoPhillips Company, Order Granting Blanket 
Authorization to Export Previously Imported Liquefied Natural Gas by 
Vessel, FE Docket No. 11-109-LNG, DOE/FE Order No. 3038 (November 
22, 2011).
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Current Application

    In the instant application, Oregon LNG seeks long-term, multi-
contract authorization to export up to 9.6 mtpa of natural gas produced 
in Canada, and to a lesser extent, domestically produced natural gas, 
as LNG (the equivalent of 456.25 Bcf per year, or 1.3 Bcf/d of natural 
gas), for a period of 25 years beginning on the earlier of the date of 
first export or eight years from the date the authorization is granted 
by DOE/FE. Oregon LNG requests that such long-term authorization 
provide for export from its LNG terminal to be located in Warrenton, 
Oregon, in Clatsop County, to any country with which the United States 
does not have an FTA requiring national treatment for trade in natural 
gas, which has developed or in the future develops the capacity to 
import LNG via ocean-going carrier, and with which trade is not 
prohibited by U.S. law or policy.
    Oregon LNG requests authorization to export LNG acting on its own 
behalf or as agent for others. At present, Oregon LNG does not 
contemplate entering into any long-term gas supply or long-term export 
contracts in conjunction with the LNG export authorization requested 
herein. Rather, Oregon LNG will enter into capacity use arrangements 
with potential Project participants or third-party customers. 
Accordingly, Oregon LNG is not submitting transaction-specific 
information such as long-term supply agreements and long-term export 
agreements, as required by Section 590.202(b) of the DOE regulations, 
at this time. Instead, Oregon LNG requests that DOE/FE adhere to the 
precedent set forth in Sabine Pass Liquefaction, LLC, DOE/FE Order No. 
2961, at 41, where DOE/FE found that given the state of development for 
the proposed export project, Sabine Pass would be permitted to submit 
transaction-specific information when the contracts reflecting such 
information were executed.

Public Interest Considerations

    Oregon LNG states that the Project has been proposed due to the 
improved outlook for North American natural gas production, owing to 
drilling productivity gains that enabled rapid growth in supplies from 
unconventional, and particularly shale, gas-bearing formations in the 
United States and Canada. Oregon LNG states that improvements in 
drilling and extraction technologies have coincided with rapid 
diffusion in the natural gas industry's understanding of the 
unconventional resource base and best practices in drilling and 
resource development. Oregon LNG states that these changes have 
rendered obsolete once prominent fears of declining future domestic 
natural gas production.
    According to Oregon LNG, the Project offers various benefits to the 
public, including the much needed expansion of market scope and access 
for North American natural gas producers at times when neither U.S. nor 
Canadian gas prices support continued production. Oregon LNG states 
that the North American supply glut has depressed domestic natural gas 
prices to historic lows (below $2.00 per MMbtu) not experienced since 
1999.\2\ Oregon LNG further states that analysts have expressed concern 
that the Canadian gas storage levels may reach capacity in June 2012, 
potentially affecting U.S. natural gas prices as Canadian producers 
attempt to move surplus gas across the border to the U.S.
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    \2\ Citing, U.S. Energy Information Administration (EIA), U.S. 
Natural Gas Wellhead Price, http://www.eia.gov/dnav/ng/his/n9190us3m.htm.
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    Oregon LNG states that the influx of labor needed to complete the 
Project will have a major positive impact on the region's economy. In 
its letter of support, the United Brotherhood of Carpenters and Joiners 
of America points out that regional unemployment in the construction 
sector has hovered around 17 percent, which is twice the rate of 
general unemployment. Oregon LNG states that from 2014 unitl the 
anticipated completion date in 2018, the construction phase will create 
an average of 3,054 direct-employment, new construction jobs for the 
Project.
    Oregon LNG states that the economic impact of a construction 
project goes well beyond the direct costs of construction. If the 
Project requires sheet metal from a local producer, for example, an 
indirect impact will be felt by the hiring of new workers at the 
manufacturer. The regional indirect impact of the construction phase of 
the Project is estimated at $2.79 billion and the average, indirect 
employment impact spread over the anticipated 5-year period involving 
construction efforts is estimated at 2,579 jobs.
    Oregon LNG states that its exports will result in a net improvement 
in the balance of trade for the U.S. even after deducting gas imports 
from Canada. If approved, the export authorization is projected to 
reduce the U.S. trade deficit by $4.5 billion per year over a 25-year 
period for an estimated total of $112.5 billion of net deficit 
reduction over the life of the Project.
    Further details can be found in the Application, which has been 
posted at http://www.fe.doe.gov/programs/gasregulation/index.html.

Environmental Impact

    Oregon LNG states that the potential environment impacts of the 
Project will be reviewed by the Federal Energy Regulatory Commission 
(FERC) under

[[Page 55199]]

the National Environmental Policy Act (NEPA). Oregon LNG and Oregon 
Pipeline Company requested authorization to commence FERC's mandatory 
NEPA pre-filing process for the Project on July 3, 2012, in FERC Docket 
No. PF12-18-000. Oregon LNG and Oregon Pipeline Company anticipate 
filing a formal application with FERC pursuant to Section 3 of the 
Natural Gas Act (NGA) no later than the First Quarter of 2013. 
Accordingly, Oregon LNG requests that, pursuant to Section 590.402 of 
the DOE Regulations, DOE/FE issue a conditional order authorizing the 
export of LNG as requested in the Application, conditioned on 
completion of the environmental review of the Export Project 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 environmental 
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) 
emailing the filing to [email protected] with FE Docket No. 12-77-LNG 
in the title line; (2) mailing an original and three paper copies of 
the filing to the Office of Natural Gas Regulatory Activities at the 
address listed in ADDRESSES. The filing must include a reference to FE 
Docket No. 12-77-LNG; or (3) 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. The filing must include 
a reference to FE Docket No. 12-77-LNG.
    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 Oregon LNG 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.

    Issued in Washington, DC, on August 31, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-22088 Filed 9-6-12; 8:45 am]
BILLING CODE 6450-01-P