[Federal Register Volume 77, Number 235 (Thursday, December 6, 2012)]
[Notices]
[Pages 72840-72843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-29473]


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DEPARTMENT OF ENERGY

[FE Docket No. 12-123-LNG]


CE FLNG, 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 30-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 
September 21, 2012, by CE FLNG, LLC (CE FLNG), requesting long-term, 
multi-contract authorization to export up to 8 million tons per annum 
(mtpa) of domestically produced liquefied natural gas (LNG), the 
equivalent of about 391 billion cubic feet (Bcf) of natural gas per 
year, or 1.07 Bcf per day (Bcf/d), over a 30-year period, commencing on 
the earlier of the date of first export or ten years from the date the 
requested authorization is granted. The LNG would be exported from the 
proposed CE FLNG LNG terminal in Plaquemines Parish, Louisiana, 
(Project) 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 source of the 
natural gas will be from direct connects with the interstate pipelines 
of Tennessee 500 leg, SONAT, Transcontinental, Gulf South and several 
intrastate pipelines in Louisiana. CE FLNG anticipates that it will 
need to extend pipeline approximately 100 miles to connect to the 
proposed Project. CE FLNG anticipates that sources of natural gas will 
include Texas and Louisiana producing regions and the offshore gulf 
producing regions, with CE FLNG's primary source of natural gas coming 
from the Gulf of Mexico rather than from shale gas plays. CE FLNG 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

[[Page 72841]]

procedures detailed in the Public Comment Procedures section no later 
than 4:30 p.m., eastern time, February 4, 2013.

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.
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

    CE FLNG is a Delaware limited liability company with its principal 
place of business in Greensboro, Georgia. CE FLNG is a subsidiary of 
Cambridge Energy Holdings, LLC which is owned by Cambridge Energy Group 
Limited. CE FLNG's affiliate Cambridge Energy, LLC is a marketer of 
natural gas and currently has a two-year blanket authorization to 
import and export natural gas and LNG to and from Canada and Mexico, 
and import LNG from international sources under DOE/FE Order No. 2991.
    CE FLNG states that it is finalizing the design of natural gas 
processing and liquefaction facilities to receive and liquefy domestic 
natural gas at the proposed Project. CE FLNG states that the Project 
facilities will consist of two floating liquefaction, storage and 
offloading units (FLSO), each capable of producing up to 4 mtpa of LNG 
for a total capacity of 8 mtpa of LNG. CE FLNG states that the units 
will have an LNG storage capacity of 250,000 cubic meters. CE FLNG 
further states that each FLSO unit will be capable of limited natural 
gas treatment, liquefaction, and capability to export LNG to off-taking 
LNG carriers utilizing ship-to-ship process. CE FLNG also states that 
the Project facilities would permit natural gas to be received by 
pipeline at the Project, liquefied, and loaded from the FLSO unit's 
storage tanks onto LNG carriers berthed alongside. CE FLNG states that 
it will construct, own, and operate the Project.
    In this same Application, CE FLNG also requested long-term 
authorization to export domestically produced LNG to countries that 
have or will enter into FTAs with the United States calling for 
national treatment of trade in natural gas. Subsequently, on November 
12, 2012, DOE/FE issued an order in FE Docket No 12-123-LNG granting 
long-term export authorization to FTA countries.\1\
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    \1\ On November 21, 2012, DOE/FE issued Order No. 3193, granting 
long-term multi-contract authorization to export LNG by vessel from 
the proposed CE FLNG LNG terminal in Plaquemines Parish, Louisiana 
to FTA nations.
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Current Application

    In the instant application, CE FLNG seeks long-term, multi-contract 
authorization to export up to 8 mtpa of domestically produced natural 
gas, as LNG (the equivalent of 391 Bcf per year, or 1.07 Bcf/d of 
natural gas), for a period of 30 years beginning on the earlier of the 
date of first export or ten years from the date the authorization is 
granted by DOE/FE, to any nation with which the United States does not 
have an FTA requiring national treatment for trade in natural gas or 
LNG with which trade is not prohibited by United States law or policy. 
CE FLNG requests that such long-term authorization provide for export 
from its proposed Project in Plaquemines, Louisiana 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.
    CE FLNG requests authorization to export LNG acting on its own 
behalf or as agent for other parties who themselves hold title to the 
LNG at the time of export.
    CE FLNG seeks long-term multi-contract authorization to export 
natural gas available in the United States natural gas pipeline system. 
CE FLNG states that the source of natural gas supply will come from the 
interstate grid at different liquidity points. CE FLNG states that the 
pipeline infrastructure will be expanded and extended to connect to the 
proposed Project allowing CE FLNG and its customers to purchase gas for 
export from any point in the U.S. interstate pipeline system. CE FLNG 
states that this supply will be sourced in large volumes in the spot 
markets, in medium term markets, or pursuant to long-term arrangements, 
for the account of CE FLNG or third party customers of CE FLNG.

Public Interest Considerations

    CE FLNG states that DOE/FE recently affirmed that ``principal focus 
of this agency's review of export applications in decisions under 
current delegated authority has continued to be the domestic need for 
the natural gas proposed to be exported, and any other factors to the 
extent they are shown to be relevant to a public interest 
determination.'' \2\ CE FLNG states as demonstrated herein, its 
application is not inconsistent with the public interest.
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    \2\ Sabine Pass Liquefaction, LLC, DOE/FE Order Denying Request 
for Review Under Section 3(c) of the Natural Gas Act, at page 6, 
October 21, 2010.
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    CE FLNG states that the main focus of the DOE/FE's public interest 
analysis has been the projected domestic need for the gas to be 
exported. CE FLNG states that domestic need can be measured by looking 
at domestic natural gas supply versus natural gas demand. CE FLNG 
states that DOE/FE has historically compared the total volume of 
natural gas reserves and recoverable resources available to be produced 
during the proposed export period to total gas demand during the export 
period to determine whether there is a domestic need for the gas to be 
exported.\3\
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    \3\ Phillips Alaska Natural Gas Corp. and Marathon Oil Co., DOE/
FE Order No. 1473 at pp. 29, 40, 46.
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    CE FLNG states that it is their view that recoverable natural gas 
resources in the U.S. are abundant, cheap, and sufficient to meet 
demand for domestic consumption and CE FLNG's proposed export over the 
long-term. In addition, CE FLNG states that it is their belief that 
exports will not cause a significant increase in domestic natural gas 
prices. CE FLNG states that accordingly, the proposed export 
authorizations will not have a detrimental impact on the domestic 
supply of natural gas and, therefore, are not inconsistent with the 
public interest.
    CE FLNG states that for temporary jobs, it estimates that 750-1,000 
constructions jobs will be created during the design and construction 
of the Project. CE FLNG states that for permanent jobs, it estimates a 
further 200 jobs will be created for CE FLNG Production Staff (100 
people assigned per vessel), 120 jobs for staff on the carriers, 50 
jobs for support staff

[[Page 72842]]

personnel, as well as various other jobs for support vessels, tugs, 
etc.
    CE FLNG also states that granting the requested authorizations 
would also positively impact the U.S. balance of trade. CE FLNG states 
that in 2010, the U.S. trade deficit was $497.8 billion, an increase of 
$122.9 billion from the 2009 figure.\4\ CE FLNG state that notably, of 
the $497.8 billion deficit, $265 billion (over half) resulted from a 
negative balance in the trade of petroleum products.\5\ CE FLNG asserts 
that its exports of 1.07 Bcf/d will make a positive impact on the 
balance of trade. CE FLNG states that the DOE/FE, in approving export 
applications has acknowledged the positive impact that LNG exports can 
have on the balance of trade with destination nations.\6\ CE FLNG 
states moreover, consistent with the aims of the National Export 
Initiative and the DOE's policy of ``promoting competition in the 
marketplace by allowing commercial parties to freely negotiate their 
own trade arrangements'',\7\ the export of LNG will help to improve 
economic trade and ties between the U.S. and the destination nations, 
which could include key industrialized nations in Europe and Asia, as 
well as developing nations in Asia, South America, the Middle Ease, and 
the Caribbean.
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    \4\ Bureau of Economic Analysis, U.S. Department of Commerce, 
U.S. International Trade in Goods and Services, (Feb. 11, 2011), 
available at http://www.bea.gov/newsreleases/international/trade/2011/pdf/trad1210.pdf.
    \5\ Id. at 11. In 2010, the U.S. exported only $70 billion in 
petroleum products while importing over $335 billion.
    \6\ See, e.g., ConocoPhillips Company, FE Docket No. 09-92-LNG, 
Order No. 2731 at 10 (Nov. 30, 2009); Cheniere Marketing, Inc., FE 
Docket No. 08-77-LNG, Order No. 2651 at 14 (June 8, 2009) 
(``[M]itigation of balance of payments issues may result from a 
grant of the [export] application.'')
    \7\ Cheniere Marketing, Inc., FE Docket No. 08-77-LNG, Order No. 
2651 at 11 (June 8, 2009).
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    Further details can be found in the Application, which has been 
posted at http://www.fe.doe.gov/programs/gasregulation/index.html.

Environmental Impact

    CE FLNG states that following the issuance of this long-term multi-
contract authorization requested in this Application, it will initiate 
the pre-filing review process at the Federal Energy Regulatory 
Commission (FERC) for the proposed Project facilities. CE FLNG states 
that this will be the initial step in a comprehensive and detailed 
environmental review of the Project by FERC. CE FLNG states that it 
anticipates, consistent with the requirements of the National 
Environmental Policy Act (NEPA), FERC will act as the lead agency for 
environmental review, with the DOE acting as a cooperating agency. CE 
FLNG requests that the DOE issue an order approving this Application, 
with such approval subject to completion by FERC of a satisfactory 
environmental review of the Project.

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. 12-123-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. 12-123-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. 12-123-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 CE FLNG 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

[[Page 72843]]

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 November 30, 2012.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas 
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2012-29473 Filed 12-5-12; 8:45 am]
BILLING CODE 6450-01-P