[Federal Register Volume 79, Number 128 (Thursday, July 3, 2014)]
[Pages 38017-38020]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-15652]



[FE Docket No. 13-157-CNG]

Emera CNG LLC; Application for Long-Term Authorization To Export 
Compressed Natural Gas Produced From Domestic Natural Gas Resources to 
Non-Free Trade Agreement Countries for a 20-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 
November 20, 2013, by Emera CNG, LLC (Emera) requesting long-term 
authorization to export compressed natural gas (CNG) produced from 
domestic sources in a volume equivalent to approximately 9.125 billion 
cubic feet per year (Bcf/yr) of natural gas, or 0.025 Bcf per day (Bcf/
d). Emera seeks authorization to export the CNG by vessel \1\ from a 
proposed CNG compression and loading facility (Facility) to be located 
at the Port of Palm Beach, in Riviera Beach, Florida. Emera seeks to 
export the CNG solely on its own behalf for a 20-year term, commencing 
on the earlier of the date of first export or five years from the date 
the authorization is issued.

    \1\ As discussed below, Emera informed DOE/FE by letter dated 
May 2, 2014, that it seeks authority to export CNG by waterborne 
vessel only, not also by truck, as the Application stated. See Ltr. 
from Dan Muldoon, President of Emera, to John Anderson, U.S. Dep't 
of Energy, FE Docket No. 13-157-CNG (May 2, 2014) [hereafter Emera 

    In the portion of Emera's Application subject to this Notice, Emera 
requests authorization to export this CNG to any country with which the 
United States does not have a free trade agreement (FTA) requiring 
national treatment for trade in natural gas (non-FTA countries), and 
with which trade is not prohibited by U.S. law or policy. This 
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 38018]]

procedures detailed in the Public Comment Procedures section no later 
than 4:30 p.m., Eastern time, September 2, 2014.

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 

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.

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.

Cassandra Bernstein, U.S. Department of Energy, Office of the Assistant 
General Counsel for Electricity and Fossil Energy, Forrestal Building, 
Room 6B-256, 1000 Independence Avenue SW., Washington, DC 20585, (202) 



    Applicant. Emera is a Delaware limited liability company with its 
principal place of business in West Palm Beach, Florida. Emera is a 
wholly-owned indirect subsidiary of Emera Incorporated (Emera Inc.), a 
corporation formed under the laws of the province of Nova Scotia, 
Canada, with its principal place of business in Nova Scotia, Canada. 
According to Emera, Emera Inc. is a publicly traded energy and services 
company that, in relevant part, owns and operates or has an interest in 
electric utilities in four Caribbean countries: the Bahamas, Barbados, 
Dominica, and St. Lucia.
    Procedural History. In the portion of the Application not subject 
to this Notice, Emera sought long-term authorization to export the same 
volume of CNG to any country with which the United States currently 
has, or in the future will have, a FTA requiring the national treatment 
for trade in natural gas, and with which trade is not prohibited by 
U.S. law or policy (FTA countries).\2\ DOE/FE reviewed that portion of 
the Application separately pursuant to NGA section 3(c), 15 U.S.C. 
717b(c), and issued an order granting the FTA export authorization on 
June 13, 2014, in DOE/FE Order No. 3447.\3\

    \2\ The United States currently has FTAs requiring national 
treatment for trade in natural gas with Australia, Bahrain, Canada, 
Chile, Colombia, Dominican Republic, El Salvador, Guatemala, 
Honduras, Jordan, Mexico, Morocco, Nicaragua, Oman, Panama, Peru, 
Republic of Korea, and Singapore. FTAs with Israel and Costa Rica do 
not require national treatment for trade in natural gas.
    \3\ Emera CNG, LLC, DOE/FE Order No. 3447, Order Granting Long-
Term Authorization to Export Compressed Natural Gas By Vessel from a 
Proposed CNG Compression And Loading Facility at the Port Of Palm 
Beach, Florida, To Free Trade Agreement Nations (June 13, 2014).

    Compression Project. Emera seeks long-term authorization to export 
CNG from a CNG compression and loading facility that it proposes to 
construct, own, and operate at the Port of Palm Beach, Florida. Emera 
states that the Facility will be located off of the Riviera Lateral, an 
intrastate pipeline owned and operated by Peninsula Pipeline Company, 
Inc. Emera states that the Facility will be located off of the Rivera 
Lateral, an intrastate pipeline owned and operated by Peninsula 
Pipeline Company, Inc. (a subsidiary of Chesapeake Utilities 
Corporation). Emera states that its affiliate, Emera Utility Services 
Incorporated (EUS), has entered into a reservation agreement with the 
Port of Palm Beach District, giving EUS exclusive negotiating rights to 
lease the site on which Emera intends to construct the Facility.\4\ 
Emera expects construction of the Facility to be completed in 2015.

    \4\ A copy of the reservation agreement and related documents is 
appended to the Application at Appendix C.

    According to Emera, the proposed Facility will consist of 
dehydration, compression, and filling equipment with nominal loading 
capacity of 0.025 Bcf/d of CNG, as well as staging and loading 
facilities for CNG trailers, associated utilities, infrastructure, and 
support systems. Emera states that pressure vessels with an open ISO 
container frame will be filled with CNG under high pressure and loaded 
onto a roll on/roll off ocean-going carrier. In the Application, Emera 
states that it is seeking authorization to export the CNG ``via truck 
and ocean-going carrier'' (App. at 1, 2), but Emera subsequently 
clarified that ``all exports will be by waterborne vessel,'' and that 
it ``will not export CNG from the Facility by truck alone.'' \5\

    \5\ Emera Ltr. at 1.

    According to Emera, the Facility initially will be capable of 
loading 0.008 Bcf/d of CNG (2.92 Bcf/yr). Once completed, the Facility 
will be capable of expanding to load and deliver CNG in a volume 
equivalent to approximately 0.025 Bcf/d of natural gas (9.125 Bcf/yr), 
the requested export volume.

Current Application

    Emera seeks to export domestically produced CNG by vessel to non-
FTA countries in a total volume equivalent to approximately 0.025 Bcf/d 
of natural gas (9.125 Bcf/yr), the same requested export volume granted 
in its FTA order (DOE/FE Order No. 3447). Emera requests this long-term 
authorization for a 20-year term, beginning on the date of the first 
export or five years from the date the requested authorization is 
    Emera requests long-term authorization to engage in the proposed 
exports solely on its own behalf, and asserts that it will have title 
to the CNG at the point of export. Emera states that, although it seeks 
authorization to export CNG to any permitted destination, the primary 
purpose of the project is to fuel power generation facilities owned by 
an Emera affiliate, Grand Bahama Power Company (GBPC), located on the 
island of Grand Bahama. Emera states that its parent company, Emera 
Inc., owns 80.4 percent of GBPC, and that GBPC is a vertically 
integrated utility with a gross installed generating capacity of 102 
    Emera anticipates having a number of potential customers for the 
proposed exports, all of whom are expected to be located within the 
Caribbean. Specifically, Emera states that it expects to enter into a 
long-term contract to supply gas to GBPC. Under the terms of that 
anticipated agreement, CNG from the Facility will be transported 
approximately 75 nautical miles from the Port of Palm Beach to an 
unloading and decompression facility in Freeport, Grand Bahama. In 
Freeport, the natural gas pressure vessels will be unloaded from the 
carrier, and the gas will pass through a decompression station. The 
decompressed gas will be transported via pipeline to local power 
plant(s) owned and operated by GBPC for use in electricity generation. 
According to Emera, there will be an opportunity for other companies 
operating in Freeport in close proximity to the pipeline to utilize the 
exported gas.
    Emera commits to observing all DOE/FE reporting requirements for 
exports. Citing DOE/FE precedent,\6\ Emera

[[Page 38019]]

commits to filing a copy of any relevant long-term commercial 
agreements (including the anticipated contract with GBPC) within 30 
days of the agreement(s) being executed, including both a non-redacted 
copy for filing under seal and either a redacted version of the 
contract or major provisions of the contract for public posting.

    \6\ See, e.g., Dominion Cove Point, LNP, LP, DOE/FE Order No. 
3331, Order Conditionally Granting Long-Term Multi-Contract 
Authorization to Export Liquefied Natural Gas by Vessel from the 
Cove Point LNG Terminal to Non-Free Trade Agreement Nations (Sept. 
11, 2013).

    Emera states that the natural gas supplying the proposed exports 
will come from domestic natural gas markets. As noted above, the 
Facility will be directly connected to the Riviera Lateral--the 
intrastate natural gas pipeline owned and operated by Peninsula 
Pipeline Company, Inc. which, in turn, is regulated by the Florida 
Pipeline Service Commission. Emera states that Peninsula Pipeline 
Company, Inc. is connected to Florida Gas Transmission Corporation, an 
interstate pipeline regulated by the Federal Energy Regulatory 
Commission (FERC). Emera asserts that, through the combination of 
Peninsula Pipeline Company, Inc. and Florida Gas Transmission 
Corporation, it will have access to gas supplies available throughout 
the Gulf Coast region and beyond.
    According to Emera, it intends for the Facility to be the only 
source of CNG for export. In the Application, Emera states that, during 
times of maintenance at the Facility or at the Port of Palm Beach, CNG 
may be sourced from other facilities in Florida and transported to the 
Port or other general use port facilities (including Port Everglades, 
Port of Miami, Port Canaveral, or Port of Jacksonville) for export. 
Subsequently, however, Emera clarified that ``the Facility will be the 
only source and supply of CNG to be exported'' pursuant to this 
authorization.\7\ Emera further clarified that any purchases of CNG 
from other facilities during maintenance periods for the Facility will 
be short-term (i.e., pursuant to contracts of less than two years in 
duration), and therefore Emera intends to apply separately for blanket 
authorization to export CNG from those facilities, as appropriate.\8\

    \7\ Id.
    \8\ Id.

Request for Separate Treatment

    Emera requests that DOE/FE consider the Application outside of DOE/
FE's existing Order of Precedence for processing applications 
requesting authorization to export LNG to non-FTA countries.\9\ Emera 
states that its Application is distinguishable from other pending non-
FTA LNG export applications for several reasons, including the smaller 
volume of natural gas proposed for export, which Emera states will not 
have any detectable impact on the domestic natural gas market.

    \9\ ``Order of Precedence--Non-FTA LNG Export Applications,'' 
http://energy.gov/fe/downloads/order-precedence-non-fta-lng-export-applications (last revised Mar. 24, 2014). DOE/FE notes that it 
recently issued a Notice of Proposed Procedures that, if finalized 
following public notice and comment, would affect the existing Order 
of Precedence and potentially obviate this request. See Dep't of 
Energy, Proposed Procedures for Liquefied Natural Gas Export 
Decisions, 79 FR 32,261 (June 4, 2014).

Public Interest Considerations

    Emera states that a grant of the Application will serve the public 
interest in several respects. First, in discussing the economic impacts 
of the proposed exports, Emera describes the two-part 2012 LNG Export 
Study commissioned by DOE/FE to study the economic impacts of natural 
gas exports.\10\ Emera states that the second part of the study 
conducted by NERA found that the United States would experience net 
economic benefits from exports of LNG, with the level of benefits 
increasing as the quantity of exports increases. Emera asserts that its 
proposed exports also will provide economic benefits to the U.S. 
economy. Specifically, Emera asserts that its proposed export level is 
de minimis compared to the quantities of natural gas studied in the 
2012 LNG Export Study, but that its proposed exports and the Facility 
itself nonetheless will have a positive economic impact, consistent 
with NERA's findings. According to Emera, the quantity of natural gas 
to be exported is approximately 0.036% of all domestic consumption 
based on 2012 data, and thus is so minimal as to have no practical 
impact on natural gas prices or supply in the United States.

    \10\ As Emera states and DOE/FE notes, DOE/FE engaged the U.S. 
Energy Information Administration (EIA) and NERA Economic Consulting 
(NERA) to conduct a two-part study of the economic impacts of LNG 
exports, together referred to as the 2012 LNG Export Study. First, 
DOE/FE requested that EIA assess how prescribed levels of natural 
gas exports above baseline cases could affect domestic energy 
markets. EIA published its study, Effect of Increased Natural Gas 
Exports on Domestic Energy Markets, in January 2012. DOE also 
contracted with NERA to incorporate the then-forthcoming EIA case 
study output into NERA's general equilibrium model of the U.S. 
economy. NERA analyzed the potential macroeconomic impacts of LNG 
exports under a range of global natural gas supply and demand 
scenarios. DOE published the NERA study, Macroeconomic Impacts of 
LNG Exports from the United States, in December 2012. See LNG Export 
Study, http://energy.gov/fe/services/natural-gas-regulation/lng-export-study.

    Emera further states that its proposed exports will have a more 
significant effect on the regional level. According to Emera, the 
construction and operation of the Facility will benefit the economy of 
Palm Beach County, Florida, by enhancing the value of existing pipeline 
infrastructure, adding to the local property tax base, creating jobs, 
and increasing overall economic activity and value in the region.
    Second, citing the positive international impacts associated with 
the proposed exports, Emera states that the Facility will foster good 
trade relations with the Bahamas and benefit Bahamian development, 
consistent with U.S. policy under the Caribbean Basin Initiative. 
According to Emera, exporting domestic CNG from the United States would 
introduce an alternative to the island that would support the 
conversion of existing power generating stations from heavy fuel oil to 
natural gas.
    Third, addressing the supply impacts of the proposed exports, Emera 
states that the quantity of exports proposed by Emera (0.025 Bcf/d of 
CNG) represents only 0.4% of the quantity of natural gas previously 
approved for export to non-FTA countries. Emera asserts that exporting 
this quantity of natural gas will have no detectable impact on natural 
gas prices in the United States or on the security of domestic supply.
    Finally, Emera asserts that, in addition to stabilizing electricity 
rates in the area, exports of CNG to the Bahamas would have significant 
positive environmental impacts through the reduction of emissions of 
fuel oil and diesel-burning electric generators, including emissions of 
greenhouse gases.
    Additional details can be found in Emera's Application, which is 
posted on the DOE/FE Web site at: http://www.fossil.energy.gov/programs/gasregulation/authorizations/2013_applications/Emera_CNG,_LLC_13-157-CNG.html.

Environmental Impact

    Emera asserts that the proposed Facility is not subject to FERC's 
jurisdictional authority under NGA section 3, and therefore Emera is 
not required to seek FERC approval of the Facility's construction under 
the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et 

[[Page 38020]]

Additionally, Emera asserts that the export of CNG via vessel is 
outside of FERC's regulatory jurisdiction. For these reasons, Emera 
states that it does not intend to file with FERC for any authorizations 
in connection with activities contemplated by this Application.

    \11\ DOE/FE takes administrative notice that Emera has 
petitioned FERC for a declaratory order stating that the proposed 
construction of the Facility and the planned export of CNG from the 
Facility via ocean-going carrier are not subject to FERC's 
jurisdiction under section 3 of the NGA, 15 U.S.C. 717. See Emera 
CNG, LLC, Petition for Declaratory Order Disclaiming Jurisdiction 
and Request for Expedited Action, Docket No. CP14-114-000 (Mar. 19, 

    Emera instead requests that DOE/FE review the potential 
environmental impacts of the Facility under NEPA. A description of the 
Facility's potential environmental impacts is set forth in Appendix D 
to the Application. Emera states that, based on the Facility's 
location, scope, and other factors, it expects the environmental 
impacts associated with the Facility to be minimal. Finally, Emera 
states that, if DOE/FE determines that a different agency should 
conduct the NEPA review, Emera will comply with that agency's NEPA 

DOE/FE Evaluation

    The Application will be reviewed pursuant to section 3(a) of the 
NGA, 15 U.S.C. 717b(a), and DOE will consider any issues required by 
law or policy. To the extent determined to be relevant, these issues 
will include the domestic need for the natural gas proposed to be 
exported, the adequacy of domestic natural gas supply, U.S. energy 
security, and the cumulative impact of the requested authorization and 
any other LNG export application(s) previously approved on domestic 
natural gas supply and demand fundamentals. DOE may also consider other 
factors bearing on the public interest, including the impact of the 
proposed exports on the U.S. economy (including GDP, consumers, and 
industry), job creation, the U.S. balance of trade, and international 
considerations; and whether the authorization 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 address these issues in 
their comments and/or protests, as well as other issues deemed relevant 
to the Application.
    NEPA requires DOE to give appropriate consideration to the 
environmental effects of its decisions. No final decision will be 
issued in this proceeding until DOE has met its environmental 
    Due to the complexity of the issues raised by the Applicant, 
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. 13-157-CNG 
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 
Supply at the address listed in ADDRESSES. All filings must include a 
reference to FE Docket No. 13-157-CNG. Please Note: If submitting a 
filing via email, please include all related documents and attachments 
(e.g., exhibits) in the original email correspondence. Please do not 
include any active hyperlinks or password protection in any of the 
documents or attachments related to the filing. All electronic filings 
submitted to DOE must follow these guidelines to ensure that all 
documents are filed in a timely manner. Any hardcopy filing submitted 
greater in length than 50 pages must also include, at the time of the 
filing, a digital copy on disk of the entire submission.
    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 is available for inspection and copying in the 
Division 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 June 27, 2014.
John A. Anderson,
Director, Division of Natural Gas Regulatory Activities, Office of Oil 
and Gas Global Security and Supply, Office of Oil and Natural Gas.
[FR Doc. 2014-15652 Filed 7-2-14; 8:45 am]