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[Federal Register: March 23, 2010 (Volume 75, Number 55)]
[Notices]               
[Page 13755-13757]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23mr10-56]                         

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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]
BILLING CODE 6450-01-P
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