[Federal Register Volume 77, Number 206 (Wednesday, October 24, 2012)]
[Notices]
[Pages 64964-64967]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-26191]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF ENERGY

[FE Docket No. 12-97-LNG]


Cheniere Marketing, LLC; Application for Long-Term Authorization 
To Export Liquefied Natural Gas Produced From Domestic Natural Gas 
Resources to Non-Free Trade Agreement Countries for a 22-Year Period

AGENCY: Office of Fossil Energy, DOE.

ACTION: Notice of application.

-----------------------------------------------------------------------

SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy 
(DOE) gives notice of receipt of an application (Application) filed on 
August 31, 2012, by Cheniere Marketing, LLC (CMI), requesting long-
term, multi-contract authorization to export up to 782 million MMBtu 
per year of LNG, equivalent to approximately 767 Bcf per year of 
natural gas, for a period of 22 years beginning on the earlier of the 
date of first export or eight years from the date the authorization is 
granted by DOE/FE. The LNG would be exported from the proposed Corpus 
Christi Liquefaction Project (CCL Project) to be located near Corpus 
Christi, Texas, to any country with which the United States does not 
have now or in the future has a free trade agreement (FTA) requiring 
national treatment for trade in natural gas and LNG; that has, or in 
the future develops, the capacity to import LNG; and with which trade 
is not prohibited by U.S. law or policy. On October 10, 2012, in a 
letter to DOE/FE, CMI clarified that it 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, December 24, 
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

[[Page 64965]]

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

    CMI, a Delaware limited liability company with its principal place 
of business in Houston, Texas, is affiliated with Corpus Christi 
Liquefaction, LLC (CCL) and Cheniere Corpus Christi Pipeline, L.P. 
(CCP), the developers of the CCL Project. CMI is an indirect subsidiary 
of Cheniere Energy, Inc. (Cheniere Energy), a Delaware corporation with 
its primary place of business in Houston, Texas. Cheniere Energy is a 
developer of LNG terminals and natural gas pipelines on the Gulf Coast, 
including the CCL Project. CMI is authorized to do business in the 
States of Texas and Louisiana.
    CMI states that it is filing this Application in conjunction with 
the CCL Project being developed by CMI's affiliates, CCL and CCP, at 
the site of the previously authorized CCLNG import terminal and 
associated pipeline in San Patricia and Nueces Counties Texas.\1\ CMI 
states that, concurrent with this Application, CCL is filing an 
application with the Federal Energy Regulatory Commission (FERC) for 
authorization pursuant to Section 3(a) of the NGA to site, construct, 
and operate the CCL Terminal facilities (CCL Terminal). In addition, 
CCP is filing an application with the FERC pursuant to Section 7(c) of 
the NGA to construct, own, and operate the Corpus Christi Pipeline 
(Pipeline) to connect the CCL Terminal facilities to interstate and 
intrastate natural gas supplies and markets.
---------------------------------------------------------------------------

    \1\ The CCL Project is being developed at the same general 
locations proposed for in the previously authorized Corpus Christi 
LNG, L.P. import terminal and associated pipeline. See Corpus 
Christi LNG, L.P. and Cheniere Corpus Christi Pipeline Company, 
Order Granting Authority Under Section 3 of the Natural Gas Act and 
Issuing Certificates, 111 FERC ] 61,081 (2005).
---------------------------------------------------------------------------

    On August 31, 2012, in FE Docket No. 12-99-LNG, CMI filed with DOE/
FE a separate application for long-term multi-contract authorization to 
engage in the export of LNG in an amount up to 782 million MMBtu per 
year, to any country with which the U.S. does not now or in the future 
will have an FTA requiring the national treatment for trade in natural 
gas and LNG; that has developed, or in the future develops, the 
capacity to import LNG; and with which trade is not prohibited by U.S. 
law or policy. DOE/FE subsequently issued an order in FE Docket No 12-
99-LNG granting long-term export authorization to FTA countries from 
the CCL Project.\2\
---------------------------------------------------------------------------

    \2\ Cheniere Marketing, LLC, Order Granting Long-Term Multi-
Contract Authorization to Export Liquefied Natural Gas by Vessel 
from the Proposed Corpus Christi Liquefaction Project to Free Trade 
Agreement Nations, DOE/FE Order No. 3164, October 16, 2012 (FE 
Docket No 12-99-LNG).
---------------------------------------------------------------------------

Current Application

    In the instant Application, CMI seeks long-term, multi-contract 
authorization to export up to 782 million MMBtu per year of LNG, 
equivalent to approximately 767 Bcf per year of natural gas, for a 
period of 22 years beginning on the earlier of the date of first export 
or eight years from the date the authorization is granted by DOE/FE. 
CMI requests authorization to export LNG to any country with which the 
United States does not have an FTA requiring national treatment for 
trade in natural gas, that has, or in the future develops, the capacity 
to import LNG, and with which trade is not prohibited by U.S. law or 
policy.
    CMI states that the CCL Project will be located on the northern 
shore of the La Quinta Channel north and east of the City of Corpus 
Christi, Texas. CMI states that the CCL Project will include three 
ConocoPhillips Optimized Cascade\SM\ LNG trains, each with a nominal 
liquefaction capacity of approximately five million metric tons per 
year. CMI states that the CCL Project will be designed to export 782 
million MMBtu of LNG per year and to import up to 400,000 MMBtu of LNG 
per day. CMI states that at the CCL Project site, natural gas will be 
liquefied into LNG and stored in three 160,000 cubic meters full-
containment LNG storage tanks. CMI further states that the LNG will be 
exported on LNG carriers that will arrive at the CCL Terminal through 
the La Quinta Channel in the Corpus Christi Bay.
    CMI states that concurrent with this Application, CCL is filing an 
application with the Federal Energy Regulatory Commission (FERC) for 
authorization pursuant to Section 3(a) of the NGA to site, construct 
and operate the CCL Terminal, and CCP is filing an application with 
FERC pursuant to Section 7(c) of the NGA to construct, own and operate 
the Corpus Christi Pipeline to connect the CCL Terminal facilities to 
interstate and intrastate natural gas supplies and markets.\3\ DOE/FE 
will act as a cooperating agency in the FERC's environmental review 
process for the CCL Project and in the preparation of an environmental 
assessment (EA) or environmental impact statement (EIS) to satisfy DOE/
FE's NEPA responsibilities.
---------------------------------------------------------------------------

    \3\ CMI stated that CCL commenced the FERC's mandatory National 
Environmental Policy Act (NEPA), 42 U.S.C. 4321, et seq., prefiling 
process for the CCL Project on December 22, 2011 in Docket No. PF12-
3-000. Through a May 31, 2012, filing, CCL and CCP formally notified 
the Commission of the inclusion of CCP in the NEPA prefiling process 
in Docket No. PF 12-3-000.
---------------------------------------------------------------------------

    CMI states that it proposes to source natural gas to be used as 
feedstock for LNG production at the CCL Project from the interstate and 
intrastate grid at points of interconnection with other pipelines and 
points of liquidity both upstream and downstream of the Pipeline. CMI 
notes that through the Pipeline's interconnects with various interstate 
and intrastate pipeline systems, the CCL Project will have access to 
virtually any point on the U.S. interstate pipeline system through 
direct delivery or by displacement.
    CMI states that it currently is engaged in commercial discussions 
with CCL to obtain all the available liquefaction capacity at the CCL 
Terminal. CMI states that either CMI or the CCL Project will bear the 
responsibility for sourcing gas supplies for delivery to the CCL 
Terminal. CMI states that CCL will commence negotiations with CCP for 
transportation capacity on the Pipeline once commercial discussion 
between CCL and CMI progress.
    CMI states that it will comply with all DOE/FE requirements for 
exporters and agents, including the registration requirements as first 
established in Freeport LNG Development, L.P., DOE/FE Order No. 2913 
and most recently set forth in Excelerate Liquefaction Solutions I, 
LLC, DOE/FE Order No. 3128.\4\
---------------------------------------------------------------------------

    \4\ Freeport LNG Development, L.P., Order Granting Long-Term 
Authorization to Export Liquefied Natural Gas from Freeport LNG 
Terminal to Free Trade Nations, FE Docket No. 10-160-LNG, DOE/FE 
Order No. 2913 (February 10, 2011); Excelerate Liquefaction 
Solutions I, LLC, FE Docket No. 12-61-LNG, DOE/FE Order No. 3128 
(August 9, 2012).

---------------------------------------------------------------------------

[[Page 64966]]

    CMI states that it has not yet entered into any long-term gas 
supply or long-term export contracts with regards to this Application. 
CMI states that, accordingly, it is not submitting transaction-specific 
information (e.g., long-term supply agreements and long-term export 
agreements) at this time and requests that DOE/FE make a similar 
finding to that made in Sabine Pass Liquefaction, LLC, DOE/FE Order No. 
2961, issued on May 20, 2011, in Docket No. 10-111-LNG, with regard to 
the transaction-specific information requested in Section 590.202(b) of 
the DOE regulations. CMI states that it is cognizant of the DOE/FE 
Policy Guidelines (of 1984) and expects to enter into export 
transactions that are responsive to the relative level of natural gas 
prices in the United States, similar to those entered into in 
connection with the Sabine Pass liquefaction and export project (DOE/FE 
Docket No. 10-111-LNG), thereby creating supply to mitigate price 
impacts if the U.S. market is in greater need of natural gas than would 
otherwise be exported.
    Lastly, CMI requests that DOE/FE issue a conditional Order 
authorizing the export of domestically produced LNG as requested in 
this Application by February 2013, followed by issuance of a final 
order immediately upon completion of the environmental review of the 
CCL Project by the FERC.

Public Interest Considerations

    CMI states that it proposed the project in part due to the improved 
outlook for domestic natural gas production, owing to drilling 
productivity gains that have enabled rapid growth in new supplies in 
South Texas and elsewhere in the United States. CMI contends that 
improvements in drilling and extraction technologies have coincided 
with a rapid diffusion of knowledge in the natural gas industry of the 
resource base and best practices in drilling and resource development. 
CMI notes that these changes have rendered obsolete once prominent 
concerns of declining future domestic natural gas production. CMI 
maintains that authorizing exports of LNG will further the responsible 
development of these emerging sources of domestic natural gas, 
providing a positive market solution that will:
    (1) Raise domestic natural gas productive capacity and promote 
stability in domestic natural gas pricing,
    (2) Stimulate the regional, state, and national economy through job 
creation and increased economic activity,
    (3) Promote the liberalization of contract structures in global LNG 
markets by lowering the cost of energy in foreign nations, thereby 
fostering economic growth abroad and creating demand for U.S.-sourced 
goods and services,
    (4) Expand economic activity and job creation in the domestic 
natural gas and petrochemicals sectors,
    (5) Promote greater national security by expanding American 
influence in international energy markets while enabling greater 
production in domestic petroleum basins,
    (6) Improve the U.S. balance of payments between $5.88 billion and 
$9.52 billion annually through the exportation of natural gas and the 
displacement of imports of other petroleum liquids, and
    (7) Increase economic trade and ties with foreign trading partners 
and hemispheric allies, and displace environmentally damaging fuels in 
those countries.
    In support of its Application, CMI commissioned a report from 
Advanced Resources International (ARI), titled U.S. Natural Gas 
Resources and Productive Capacity: Mid-2012 (ARI Resource Report), to 
assess the scope of domestic natural gas resources and their potential 
for future recovery. CMI states that the ARI Resource Report, as well 
as publicly available information, demonstrates that the U.S. has 
significant natural gas resources available to meet projected future 
domestic needs, including the quantities contemplated for export under 
this Application. CMI also states that the ARI Resource Report 
establishes that the availability of new natural gas reserves is likely 
to continue expanding into the future as new unconventional formations 
are discovered and the oil and gas industry continues to improve 
drilling and extraction techniques. CMI further states that the ARI 
Resource Report also shows that the incremental price impact of such 
exports is modest in comparison to the benefits garnered by the CCL 
Project, and when compared to the normal year-to-year price volatility 
in the natural gas market, is statistically insignificant.
    In support of its Application, CMI also commissioned a report from 
the Perryman Group, titled The Anticipated Impact of Cheniere's 
Proposed Corpus Christi Liquefaction Facility on Business Activity in 
Corpus Christi, Texas, and the US (Perryman Report). Based on this 
report, CMI presents the following reasons why the CCL Project is in 
the public interest:
    First, with respect to economic activity, the Perryman Report 
estimates that the cumulative beneficial direct impact to business 
activity and tax receipts due to the construction and operation of the 
CCL project over 25 years will range from $9.9 billion to $11.2 billion 
to the regional economy, $19.6 billion to $23.5 billion to the Texas 
economy, and $25.5 billion to $31.1 billion to the U.S. economy.
    Second, the Perryman Report estimates that the total indirect 
benefits due to enhanced natural gas exploration and production 
investments over 25 years made possible by the CCL Project will be 
$13.8 billion to the regional economy, $101.0 billion to the Texas 
economy, and $111.4 billion to the U.S. economy.
    Third, with respect to job creation, the Perryman Report estimates 
the construction and operation of the CCL Project over 25 years will 
create between 39,823 and 52,613 jobs nationwide, and that an 
additional 44,341 jobs will be indirectly generated owing to stimulus 
in the E&P sector.
    Fourth, CMI states that another indirect benefit of the CCL Project 
will be captured by the chemical industry, which CMI says will be 
advantageously impacted by the additional production of NGLs, such as 
ethane, made possible through LNG exports. CMI states that the economic 
benefits due to the construction of new chemical manufacturing 
facilities supported by exports from the CCL Project will be $1.1 
billion to the regional economy, $2.1 billion to the Texas economy, and 
$3.0 billion to the U.S. economy.
    CMI states that these as well as other benefits enumerated in this 
Application compellingly demonstrate that the export of LNG and the 
approval of this Application are in the public interest.
    Further details can be found in the Application, which has been 
posted at http://www.fe.doe.gov/programs/gasregulation/index.html.

Environmental Impact

    CMI states that the potential environment impacts of the Project 
will be reviewed by the FERC under the National Environmental Policy 
Act (NEPA). CMI notes that DOE/FE has agreed to act as a cooperating 
agency in the environmental review process for the CCL project, 
including the preparation of an EA or EIS, which will satisfy the NEPA 
responsibilities associated with the LNG exports as proposed in the 
Application. Accordingly, CMI requests that 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 CCL 
Project by the FERC.

[[Page 64967]]

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. 12-97-LNG 
in the title line; (2) mailing an original and three paper copies of 
the filing to the Office Natural Gas Regulatory Activities at the 
address listed in ADDRESSES. The filing must include a reference to FE 
Docket No. 12-97-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. 12-97-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 CMI 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 8:00 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: http://www.fe.doe.gov/programs/gasregulation/index.html.

    Issued in Washington, DC, on October 18, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-26191 Filed 10-23-12; 8:45 am]
BILLING CODE 6450-01-P