The Queue for LNG Export Permits is Long
The queue at the Department of Energy for permits to export natural gas to the energy-starved manufacturing nations of Asia is long and not showing any signs of moving. Listed here are the 26 applications that have been put before the Department of Energy. Of them only two permits - Chenier's Sabine Pass facility in Louisiana and Freeport's facility in Texas - have been permitted. Meanwhile rival producers such as Qatar, Australia and Indonesia are rapidly signing long-term contracts with Japan, Korea and China. By the time the Department of Energy gets around to acting, there may not be much of a market left. Last week Exxon CEO Rex Tillerson complained that American companies are losing millions each day and may be shut out of the market entirely. "It's a very competitive marketplace. It's not like people are just going to stand at our door like panting dogs just waiting for us to give this to them," he said.
The problem seems to be twofold: 1) bureaucratic inertia and 2) subtle opposition from Democrats and environmental groups. Secretary of Energy Ernest Moniz has promised "prompt action" on the permitting but officials at DOE say they can only review the permits at a pace of one every two months, which means the companies at the back of the queue will be waiting until 2015 at least. Bureaucrats are known to take their time and specialize in delay. But the other problem is Congressional Democrats who take a mercantilist view and say we should not trade with other countries but keep all the resources for ourselves. At the end of the line, of course, are environmental groups such as the Sierra Club that don't want anybody to use the gas anywhere and want it left in the ground. They are sure to bring legal challenges to any permit approval (they have lots of lawyers and lots of money) so the DOE must dot every "i" and cross every "t" to prepare for court cases.
Meanwhile we'll just have to keep running our $1/2-trillion annual trade deficit and hope that other countries will take our paper dollars in return.