[Federal Register Volume 75, Number 55 (Tuesday, March 23, 2010)]
[Notices]
[Pages 13755-13757]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6319]
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DEPARTMENT OF ENERGY
[FE Docket No. 08-70-LNG]
Freeport LNG Development, L.P.; Application To Amend Blanket
Authorization To Export Liquefied Natural Gas
AGENCY: Office of Fossil Energy, DOE.
ACTION: Notice of Application to Amend Blanket Authorization.
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SUMMARY: The Office of Fossil Energy (FE) of the Department of Energy
(DOE) gives notice of receipt of an application filed on March 4, 2010,
by Freeport LNG Development, L.P. (Freeport LNG), requesting an
amendment to its blanket authorization to export liquefied natural gas
(LNG) granted by DOE/FE on May 28, 2009, in DOE/FE Order No. 2644, and
amended on September 22, 2009, in DOE/FE Order No. 2644-A. Freeport LNG
seeks authorization to export foreign-sourced LNG from its Quintana
Island, Texas facilities to any other country (in addition to those
already specifically listed in DOE/FE Order No. 2644, as amended) with
capacity to import LNG via ocean-going carrier and with which trade is
not prohibited by U.S. law or policy.
The application is filed under section 3 of the Natural Gas Act
(NGA) (15 U.S.C. 717b), as amended by section 201 of the Energy Policy
Act of 1992 (Pub. L. 102-486), DOE Delegation Order No. 00-002.00I
(Nov. 10, 2009), and DOE Redelegation Order No. 00-002.04D (November 6,
2007). 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 at the address listed below no later than 4:30 p.m.,
eastern time, April 22, 2010.
ADDRESSES: 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 Beverly Howard, 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) 586-9387.
Edward Myers, U.S. Department of Energy, Office of the Assistant
General Counsel for Fossil Energy and Energy Efficiency, Forrestal
Building, Room 6B-159, 1000 Independence Ave., SW., Washington, DC
20585, (202) 586-3397.
SUPPLEMENTARY INFORMATION:
Background
Freeport LNG is a Delaware limited partnership with one general
partner, Freeport LNG-GP, Inc., a Delaware corporation, which is owned
50% by an individual, Michael S. Smith, and 50% by ConocoPhillips
Company (ConocoPhillips). Freeport LNG's limited partners are: (1)
Freeport LNG Investments, LLLP, a Delaware limited liability limited
partnership, which owns a 45% limited partnership interest in Freeport
LNG; (2) Cheniere FLNG, L.P., a Delaware limited partnership, which
owns a 30% limited partnership interest in Freeport LNG; (3) Texas LNG
Holdings LLC, a Delaware limited liability company and wholly-owned
subsidiary of The Dow Chemical Company, which owns a 15% limited
[[Page 13756]]
partnership interest in Freeport LNG; and (4) Turbo LNG LLC, a Delaware
limited liability company and wholly-owned subsidiary of Osaka Gas Co.,
Ltd., which owns a 10% limited partnership interest in Freeport LNG.
The Federal Energy Regulatory Commission (FERC) has authorized
Freeport LNG to site, construct and operate a new LNG import, storage,
and vaporization terminal on Quintana Island, Texas and an associated
9.6-mile long send-out pipeline which will be utilized to import up to
1.55 billion cubic feet (Bcf) per day of LNG.\1\ On July 1, 2008, FERC
issued a letter Order granting Freeport LNG's request to commence
service at its Quintana Island import terminal.
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\1\ Freeport LNG Order Granting Authorization Under Section 3 of
the NGA, 107 FERC ] 61,278 (2004), Order Granting Rehearing and
Clarification, 108 FERC ] 61,253 (2004); Order Amending Section 3
Authorization, 112 FERC ] 61,194 (2005).
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On January 15, 2008, FE granted Freeport LNG blanket authorization
to import up to 30 Bcf of LNG from various international sources for a
two-year term beginning March 1, 2008.\2\ On May 28, 2009, FE granted
Freeport LNG blanket authorization to export on its own behalf or as
agent for others, LNG that previously had been imported from foreign
sources in an amount up to the equivalent of 24 Bcf of natural gas on a
short-term or spot market basis from Freeport LNG's facilities on
Quintana Island, Texas to the United Kingdom, Belgium, Spain, France,
Italy, Japan, South Korea, India, China and/or Taiwan over a two-year
period commencing May 28, 2009.\3\ Further, on September 22, 2009,
Freeport LNG's blanket authorization, DOE/FE Order No. 2644 was amended
to include the export of previously imported LNG from Freeport LNG's
Quintana Island, Texas facilities to Canada and Mexico.\4\
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\2\ Freeport LNG, DOE/FE Order No. 2457, January 15, 2008 (2 FE
] 71,579).
\3\ Freeport LNG., DOE/FE Order No. 2644, May 28, 2009.
\4\ Freeport LNG, DOE/FE Order No. 2644-A, September 22, 2009.
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Current Application
In the instant application, Freeport LNG seeks to further amend
DOE/FE Order No. 2644 for authorization to export foreign-sourced LNG
from its Quintana Island, Texas facilities to any other country (in
addition to those already specifically listed in DOE/FE Order No. 2644,
as amended) with capacity to import LNG via ocean-going carrier and
with which trade is not prohibited by U.S. law or policy.
Public Interest Considerations
In support of its application, Freeport LNG states that pursuant to
Section 3 of the NGA, FE is required to authorize exports to a foreign
country unless there is a finding that such exports ``will not be
consistent with the public interest.'' \5\ Section 3 thus creates a
statutory presumption in favor of approval of this Amendment which
opponents bear the burden of overcoming.\6\ Further, in evaluating an
export application, FE applies the principles described in DOE
Delegation Order No. 0204-111, which focuses primarily on domestic need
for the gas to be exported, and the Secretary's natural gas policy
guidelines.\7\ Finally, as detailed below, Freeport LNG states that
their proposal to export LNG to those countries with the capacity to
import LNG via ocean-going carrier and with which trade is not
prohibited by U.S. law or policy is consistent with Section 3 of the
NGA and FE's policy.
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\5\ 15 U.S.C. 717b.
\6\ In Panhandle Producers and Royalty Owners Associations v.
ERA, 822 F.2d 1105, 1111 (D.D. Circ. 1987), the court found that
Section 3 of the NGA ``requires an affirmative showing of
inconsistency with the public interest to deny an application'' and
that a ``presumption favoring * * * authorization * * * is
completely consistent with, if not mandated by, the statutory
directive.''
\7\ See 49 FR 6684, February 22, 1984.
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Freeport LNG states that in DOE/FE Order No. 2644, which granted
Freeport LNG blanket authorization to export up to 24 Bcf (cumulative)
of previously imported foreign-sourced LNG, FE determined that there
presently is no domestic reliance on the volumes of imported LNG that
Freeport LNG would seek to export. Freeport LNG also states that most
recently, FE made the same finding in granting ConocoPhillips blanket
authority to export from the Freeport LNG Quintana Island terminal up
to 500 Bcf of previously imported LNG.\8\ FE stated that ``the record
shows there is sufficient supply of natural gas to satisfy domestic
demand from multiple other sources at competitive prices without
drawing on the LNG which ConocoPhillips seeks to export * * *.'' \9\
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\8\ ConocoPhillips, DOE/FE Order No. 2731, November 30, 2009.
\9\ Id. at p. 11.
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Freeport LNG is requesting further authorization, for itself and as
agent for third parties, to periodically export LNG imported under DOE/
FE Order No. 2457, as well as LNG of third parties, to any other
country not specifically identified in DOE/FE Order No. 2644 with the
capacity to import LNG via ocean-going vessel and with which trade is
not prohibited by U.S. law or policy, should market conditions in the
United States not support domestic sale of those supplies. Freeport LNG
states that Amendment of Freeport LNG's short term blanket
authorization as requested herein would provide Freeport LNG with the
necessary flexibility it requires to respond to changes in domestic and
global markets for natural gas and LNG. The additional flexibility
sought herein would further encourage Freeport LNG to obtain and store
spot market LNG cargoes. Natural gas derived from imported LNG will be
available to supply local markets when conditions support it, and will
thereby serve to moderate U.S. gas price volatility. As such, Freeport
LNG states the requested export authorization is consistent with the
public interest.
DOE/FE Evaluation
This export application will be reviewed pursuant to section 3 of
the NGA, as amended, and the authority contained in DOE Delegation
Order No. 00-002.00I (Nov. 10, 2009) and DOE Redelegation Order No. 00-
002.04D (Nov. 6, 2007). In reviewing this LNG export application
amendment, DOE will consider any changes that have occurred since the
original application in the following areas: domestic need for the gas,
as well as any other issues determined to be appropriate, including
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.
Freeport LNG asserts the proposed authorization is in the public
interest. Under section 3 of the NGA, as amended, an LNG export from
the United States to a foreign country must be authorized unless ``the
proposed exportation will not be consistent with the public interest.''
Section 3 thus creates a statutory presumption in favor of approval of
this application, and parties opposing the authorization bear the
burden of overcoming this presumption.
The National Environmental Policy Act (NEPA), 42 U.S.C. 4321 et
seq. requires DOE to give appropriate consideration to the
environmental effects of its proposed decisions.
Freeport LNG states that there would be no changes required to the
Freeport LNG facilities for the proposed exportation of LNG.
Consequently, granting this application will not be a Federal action
significantly affecting the human environment within the meaning of
NEPA.
[[Page 13757]]
Public Comment Procedures
In response to this notice, any person may file a protest, motion
to intervene or notice of intervention, as applicable, and written
comments. Any person wishing to become a party to the proceeding and to
have their written comments considered as a basis for any decision on
the application must file a motion to intervene or notice of
intervention, as applicable. The filing of a protest with respect to
the application will not serve to make the 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, motions to
intervene, notices of intervention, and written comments must meet the
requirements specified by the regulations in 10 CFR part 590. Protests,
motions to intervene, notices of intervention, requests for additional
procedures, and written comments should be filed with the Office of Oil
and Gas Global Security and Supply at the address listed above.
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 Freeport LNG is available for inspection
and copying in the Office of Oil and Gas Global Security and Supply
docket room, 3E-042, at the above address. 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 is also available
electronically by going to the following Web address: http://www.fe.doe.gov/programs/gasregulation/index.html.
Issued in Washington, DC, on March 17, 2010.
John A. Anderson,
Manager, Natural Gas Regulatory Activities, Office of Oil and Gas
Global Security and Supply, Office of Fossil Energy.
[FR Doc. 2010-6319 Filed 3-22-10; 8:45 am]
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