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Energy Department backs plan to export natural gas

BY MATTHEW DALY Published: May 18, 2013

— The Energy Department on Friday conditionally approved a Texas company's proposal to export liquefied natural gas, only the second such project allowed to move forward amid a production boom that has led to glut of domestic natural gas.

The action would allow Freeport LNG Expansion L.P. to export up to 1.4 billion cubic feet of liquefied natural gas per day from its terminal near Freeport, south of Houston. The Energy Department said granting such a permit for shipments to countries that do not have free trade agreements with the U.S. was in the public interest.

Sen. Jim Inhofe, R-Tulsa, who has pushed for more LNG exports, said the approval was “a step in the right direction, but it's only a step.”

“Our nation's reserves of natural gas have expanded rapidly in recent years, but production activities have declined significantly because of insufficient demand,” he said. If the Energy Department fails to approve the remaining applications, “further production activities may be jeopardized, which could harm job creation in Oklahoma and across the country.”

Inhofe urged Energy Secretary Ernest Moniz to approve remaining applications, saying, “markets should be in charge of determining appropriate export levels, not the federal government.”

Freeport is the second export project to win Energy Department authorization, following the Sabine Pass LNG Terminal in Cameron Parish, La.

Energy companies are seeking federal permits for more than 20 export projects that could handle up to 29 billion cubic feet of LNG a day. Approval could lead to more hydraulic fracturing, a technique also known as fracking that has allowed companies to gain access to huge stores of natural gas but raised concerns about alleged groundwater contamination and other problems.

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