[Federal Register Volume 79, Number 187 (Friday, September 26, 2014)]
[Notices]
[Pages 57896-57899]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-22886]


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DEPARTMENT OF ENERGY

[FE Docket No. 14-29-LNG]


Louisiana LNG Energy 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 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 
February 18, 2014, by Louisiana LNG Energy LLC (LLNG), requesting long-
term, multi-contract authorization to export two million metric tons 
per year (mtpa) of liquefied natural gas (LNG) produced from domestic 
sources, which LLNG states is equivalent to approximately 103.4 billion 
cubic feet per year (Bcf/yr) of natural gas (0.28 Bcf per day (Bcf/d)). 
LLNG seeks authorization to export the LNG for a 25-year term from a 
proposed LNG liquefaction project to be located near mile marker 46 on 
the East Bank of the Mississippi River, down-river from the Port of New 
Orleans, in Plaquemines Parish, Louisiana (Project). LLNG requests 
authorization to export this LNG by vessel 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. LLNG seeks to 
export this LNG on its own behalf and as agent for other parties who 
hold title to the LNG at the time of export. LLNG requests that this 
authorization commence on the earlier of the date of first export or 10 
years from the date the authorization is issued. The Application was 
filed under section 3(a) of the Natural Gas Act (NGA).

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 25, 
2014.

ADDRESSES:
    Electronic Filing by email: [email protected].

Regular Mail

    U.S. Department of Energy (FE-34), Office of Oil and Gas Global 
Security and Supply, 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 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 Lisa Tracy, 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) 
586-4523.

    Cassandra Bernstein, U.S. Department of Energy, Office of the 
Assistant General Counsel for Electricity and Fossil Energy, Forrestal 
Building, 1000 Independence Avenue SW., Washington, DC 20585, (202) 
586-9793.

SUPPLEMENTARY INFORMATION:

Background

    Applicant. LLNG is a Texas limited liability company with its 
principal place of business in Houston, Texas.

[[Page 57897]]

LLNG is owned and controlled by five equal members who also serve as 
officers of the LLC: James H. Lindsay, Ralph Summers, J.Q. Delap, 
Steven P. Martin, and Thomas W. Burgess. Each member holds a 20% 
ownership interest in LLNG. LLNG states that it intends to transfer a 
controlling ownership interest from the five members to ArcLight 
Capital Partners, LLC, a Massachusetts-based private equity firm 
specializing in the energy sector.
    Procedural History. In the Application, LLNG stated that it expects 
to file a request with the Federal Energy Regulatory Commission (FERC) 
in May 2014 to initiate the pre-filing environmental review process for 
the proposed Project. We take administrative notice that LLNG made this 
request to FERC on July 11, 2014, and FERC accepted LLNG's pre-filing 
request on July 18, 2014, in FERC Docket No. PF14-17-000.
    On July 24, 2014, LLNG submitted a supplement to its Application, 
in which it provided additional detail on the requested export volume, 
corporate structure, and source of the natural gas to be exported.\1\ 
LLNG also provided a description of the Project's LNG marine 
facilities, LNG truck loading facilities, and modular design plan. On 
August 28, 2014, LLNG submitted a second supplement to DOE/FE by 
electronic mail, clarifying information concerning its access to 
natural gas supplies. The additional Project detail provided in both 
supplements is incorporated herein.
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    \1\ See Louisiana LNG Energy LLC, Supplement to Applications of 
Louisiana LNG Energy LLC for Long-Term Authorization to Export 
Liquefied Natural Gas to Free Trade Agreement and Non-Free Trade 
Agreement Countries, Docket Nos. 14-19-LNG, 14-29-LNG (July 24, 
2014) [hereinafter Supplement].
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    On August 28, 2014, DOE/FE issued Order No. 3482, in which it 
granted LLNG's FTA export application, filed separately on February 5, 
2014. In that order, DOE/FE authorized LLNG to export domestically 
produced LNG by vessel from the Project to FTA countries (i.e., 
countries with which the United States currently has, or in the future 
will have, a free trade agreement requiring national treatment for 
trade in natural gas) \2\ in a volume equivalent to approximately 103.4 
Bcf/yr of natural gas for a term of 25 years.\3\ LLNG states that the 
LNG export volumes requested for its FTA and non-FTA authorizations, 
both equivalent to 103.4 Bcf/yr of natural gas, are not additive.
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    \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\ Louisiana LNG Energy LLC, DOE/FE Order. No. 3482, FE Docket 
No. 14-19-LNG, Order Granting Long-Term Multi-Contract Authorization 
to Export Liquefied Natural Gas by Vessel from the Proposed 
Louisiana LNG Energy LLC Project in Plaquemines Parish, Louisiana, 
to Free Trade Agreement Nations (Aug. 28, 2014).
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    Liquefaction Project. LLNG proposes to construct a liquefaction 
facility on a 200-acre site near mile market 46 on the East Bank of the 
Mississippi River, in Plaquemines Parish, Louisiana. LLNG states that 
the proposed site is currently under lease by LLNG with multiple 
renewal options extending through May 31, 2091.
    LLNG states that the liquefaction facility will consist of four 
74,380 thousand cubic feet per day (Mcf/d) liquefaction trains with a 
total annual capacity of approximately 100 Bcf (or two mtpa) of LNG. 
LLNG further states that the facility will include two amine and 
dehydration units, which will be located upstream of the four 
liquefaction trains to remove residual moisture, CO2, and 
natural gas liquids. These and other facility components, including 
storage tanks, heat exchangers, air coolers, and gas turbines, will be 
built in a modular fashion and assembled on-site.\4\
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    \4\ In its first Supplement, LLNG describes how construction is 
anticipated to proceed and identifies the planned designer and/or 
manufacturer of the major facility components. See Supplement at 5-
6.
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    LLNG states that it plans to construct a marine loading terminal 
and LNG truck loading facilities. According to LLNG, the marine loading 
terminal will consist of one berth for LNG cargo ships ranging in size 
from 130,000 to 175,000 cubic meters (m\3\) cargo capacity, and will 
have cryogenic loading arms for the loading of LNG. The LNG storage 
tanks will be fitted with pumps to transfer LNG to cargo ships at a 
loading rate of 10,000 m\3\ per hour.
    LLNG states that the LNG truck loading station will be fenced off 
and separate from the main liquefaction facility site. Two truck 
loading bays, with weigh stations, will have pumps to transfer LNG from 
the LNG storage tanks to the trucks. Flexible cryogenic hoses will 
enable the transfer of LNG to each truck at a rate of approximately 400 
gallons per minute. LLNG states that hoses will send boil-off gas to a 
handling system.

Current Application

    LLNG requests long-term, multi-contract authorization to export two 
mtpa of domestically produced LNG in a volume equivalent to 
approximately 103.4 Bcf/yr of natural gas (0.28 Bcf/d). LLNG requests 
to export the LNG by vessel from the proposed Project to any country 
that does not have a FTA requiring national treatment for trade in 
natural gas with which trade is not prohibited by U.S. law or policy. 
LLNG requests this authorization for a 25-year term commencing on the 
earlier of the date of first export or 10 years from the date the 
requested authorization is granted.
    LLNG requests this authorization on its own behalf and as agent for 
other entities who hold title to the LNG at the time of export. LLNG 
states that it expects to enter into Liquefaction Tolling Agreements 
(LTAs) under which individual customers who hold title to natural gas 
will have the right to deliver that gas to LLNG and receive LNG in 
return. According to LLNG, these contracts will be executed on a date 
closer to the date of first export. LLNG notes that the title holder at 
the point of export may be LLNG or one of LLNG's customers, or another 
party that has purchased LNG from a customer pursuant to a long-term 
contract.
    LLNG states that it will comply with all DOE/FE requirements for 
exports and agents, including registration requirements. LLNG further 
states that, when acting as agent, it will register with DOE/FE each 
LNG title holder for which LLNG seeks to export LNG as agent, and will 
comply with other registration requirements as set forth in recent DOE/
FE orders.
    LLNG seeks authorization to export natural gas available in the 
United States natural gas pipeline system. Specifically, LLNG 
anticipates that the sources of natural gas will include Texas and 
Louisiana producing regions and the offshore gulf producing regions, 
but may include natural gas produced throughout the United States.
    LLNG proposes to construct approximately 2.3 miles of 24-inch 
diameter natural gas pipeline. According to LLNG, the pipeline will 
interconnect with the High Point Gas Transmission interstate pipeline 
system located north of the proposed Project. LLNG states that this 
pipeline interconnection will provide LLNG access to approximately 1.4 
Bcf/d of natural gas supplies from multiple supply basins, including 
four major interstate pipeline systems. LLNG further states that it 
will install metering and any additional compressors on the Project 
site.

Public Interest Considerations

    LLNG contends that the Application fully addresses each of the 
public interest criteria applied by DOE/FE in reviewing export 
applications, and that

[[Page 57898]]

the proposed export is not inconsistent with the public interest. In 
support of the Application, LLNG addresses the following criteria:
    Domestic Need for the Gas. According to LLNG, DOE/FE has 
consistently found that the United States has sufficient natural gas 
supplies to support the proposed exports. LLNG asserts that, in several 
recent non-FTA conditional authorizations, DOE/FE reviewed three 
measures of supply as part of its analysis: (1) U.S. Energy Information 
Administration (EIA) Annual Energy Outlook natural gas estimates of 
production, price, and other domestic industry fundamentals; (2) proved 
reserves of natural gas; and (3) technically recoverable resources. 
LLNG maintains that all three measures of supply confirm that U.S. 
natural gas reserves are more than sufficient to meet long-term demand 
for both domestic consumption and the proposed exports. Therefore, LLNG 
contends that the proposed export authorization will not have a 
detrimental impact on the domestic supply of natural gas.
    Impact on U.S. Natural Gas Market Prices. LLNG maintains that the 
proposed exports will not have a significant impact on domestic natural 
gas prices. LLNG points to the second part of the two-part LNG Export 
Study commissioned by DOE/FE on the cumulative economic impacts of LNG 
exports.\5\ The study, conducted by NERA Economic Consulting (NERA), 
assessed the potential macroeconomic impact of LNG exports. LLNG cites 
NERA's conclusions that: (i) across all scenarios studied, the United 
States is projected to gain net economic benefits from allowing LNG 
exports, and (ii) natural gas prices in the United States will not rise 
to the levels observed in other parts of the world.
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    \5\ NERA Economic Consulting, Macroeconomic Impacts of LNG 
Exports from the United States (Dec. 5, 2012), available at: http://fossil.energy.gov/programs/gasregulation/reports/nera_lng_report.pdf (NERA Study).
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    LLNG contends that NERA's conclusions have been confirmed by 
numerous additional publicly available studies. According to LLNG, 
these studies are part of the growing body of evidence confirming that 
the export of domestically produced LNG, such as the exports requested 
in the Application, will have positive economic benefits for the United 
States as a whole.
    Economic Benefits. LLNG asserts that exporting natural gas that is 
not needed to serve U.S. demand promotes the President's pro-export 
policies, including the National Export Initiative,\6\ while improving 
local, regional, and national economies through resource development, 
an enhanced tax base, job creation, and increased overall economic 
activity. LLNG emphasizes the jobs that will be created in Louisiana 
and the Gulf Coast related to the construction and operation of the 
Project. LLNG also asserts that that the requested authorization would 
positively impact the U.S. balance of trade.
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    \6\ National Export Initiative, Exec. Order No. 13,534, 75 FR 
12,433 (Mar. 11, 2010).
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    Benefits to National Energy Security. LLNG maintains that granting 
the requested authorization will spur energy production and the 
development of new resources, thereby enhancing national energy 
security. In addition to citing DOE/FE statements in past export 
orders, LLNG cites a study by the James A. Baker III Institute for 
Public Policy at Rice University, which it states identifies the 
positive impacts of increased natural gas production on energy 
security.\7\
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    \7\ Kenneth B. Medlock III, Ph.D., et al., Shale Gas and U.S. 
National Energy Security, James A. Baker III Institute for Public 
Policy, Rice University (July 2011), available at http://bakerinstitute.org/files/496/.
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    Environmental Benefits. LLNG maintains that LNG exports can have 
significant environmental benefits because natural gas is cleaner 
burning than other fossil fuels, such as coal. According to LLNG, an 
increased supply of natural gas made possible through the export of LNG 
can help countries reduce their usage of less environmentally-friendly 
fuels.
    Based on these factors, LLNG maintains that the proposed exports 
are not inconsistent with the public interest. Additional details can 
be found in LLNG's Application, posted on the DOE/FE Web site at: 
http://energy.gov/fe/downloads/louisiana-lng-energy-llc-fe-dkt-no-14-29-lng.

Environmental Impact

    LLNG states that it will file an application with FERC for 
authorization to construct the liquefaction facility. LLNG asks DOE/FE 
to issue this requested authorization conditioned on FERC's completion 
of the NEPA review and approval of the required construction. LLNG 
states that it is standard practice for FERC to act as the lead agency 
for the environmental review, with DOE acting as a cooperating agency.

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 
responsibilities.
    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. 14-29-LNG 
in the title line; (2) mailing an original and three paper

[[Page 57899]]

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. All 
filings must include a reference to FE Docket No. 14-29-LNG. 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 September 18, 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. 2014-22886 Filed 9-25-14; 8:45 am]
BILLING CODE 6450-01-P