Bracewell & Giuliani

Powered by the attorneys of Bracewell & Giuliani, Energy Legal Blog® is your resource for updates and analysis on national and global energy issues.
  1. Economic Development Obligations: Unintended Consequences

    Wednesday, November 12, 2014 10:14 am by

    The message from the South African Department of Energy at the Windaba Conference in Cape Town last week could not have been clearer. In his address during the opening session of the conference, Dr. Wolsley Barnard (Deputy Director General: Energy Programs and Project at the DOE) forced home the point that the South African authorities “…will be enforcing penalties…” for breaches of the mandatory economic development obligations under the South African Government’s Renewable Energy IPP Procurement Programme.

    Listening to Dr. Barnard’s address got me thinking. Three years on from its launch has the REIPPP Programme made a real difference to South Africa’s manufacturing and service sectors? The answer quite clearly has to be a yes. The development of the R300-million wind turbine tower factory at the Coega IDZ, the recent announcement by SunPower of the construction of a new 160MW solar panel manufacturing facility in Cape Town and the DOE’s job creation forecasts for construction and operational posts in the renewable energy sector make this apparent. But it did occur to me that there may be some unexpected side effects to the approach being taken by the DOE to this point. (more…)

  2. Environmental Regulations Impacting the Energy Industry – Summer 2014

    Friday, June 20, 2014 11:06 am by

  3. Environmental Implications of DOE’s Approval of Fourth LNG Export Project

    Friday, September 13, 2013 1:21 pm by

    On September 11, 2013, the United States Department of Energy (DOE) issued an order conditionally granting Dominion Cove Point LNG, LP (DCP) long-term, multi-contract authorization to export liquefied natural gas (LNG) by vessel from the Cove Point LNG Terminal in Calvert County, Maryland to non-Free Trade Agreement (non-FTA) countries (Cove Point Order). DCP is the fourth company to receive conditional authorization from the DOE to export LNG to non-FTA countries and the third company to receive such authorization in the past four months. (more…)

  4. Number Four – DOE Approves LNG Exports for Cove Point

    Thursday, September 12, 2013 8:23 am by and

    On September 11, 2013, the Department of Energy (“DOE”) issued an order authorizing Dominion Cove Point, LNG, LP (“Cove Point”) to export to non-Free Trade Agreement (“FTA”) countries up to 0.77 Bcf/day of domestically produced liquefied natural gas.  This is the fourth order authorizing non-FTA LNG exports, coming after similar orders for Sabine Pass, Freeport, and Lake Charles.  The Cove Point order brings the cumulative total of authorized LNG exports up to 6.37 Bcf/day, which is slightly greater than the “low” export case evaluated in the DOE-commissioned LNG Export Study that evaluated the economic impacts of exporting domestic LNG. 

    While DOE has suggested it would issue orders every six to eight weeks, the Cove Point order comes after just five weeks since the Lake Charles order (August 7, 2013).  It’s unclear if DOE is hastening its pace, but a reduced delay between orders is likely to please Senator Murkowski, who has asked DOE to expedite the approvals.  Still, even at the quicker pace it could take DOE over two years to process the remaining 20 pending applications, assuming DOE does not pause its review of the applications.  (more…)

  5. Mexico: U.S. Natural Gas Savior?

    Thursday, August 8, 2013 3:27 pm by

    Much has been made of the exponential growth in natural gas supply within the continental United States due to the horizontal drilling and fracking techniques employed in recent years. The resulting natural gas glut has reversed the conventional wisdom that America would be a net importer of natural gas for most of the 21st century with the expectation now being that America, despite being by far the world’s largest consumer of hydrocarbons, will be a significant exporter of natural gas overseas in the coming years and decades. This development has resulted in a flurry of proposed liquefied natural gas (“LNG”) terminals that hope to export natural gas in order to take advantage of the large spreads between prices in America and those in Europe and Asia. Those price spreads exist because a worldwide market for natural gas doesn’t exist, as opposed to oil where the relatively short-lived Brent-WTI price differential has evaporated in recent months.

    However, these export terminals cannot export gas to foreign countries lacking a free trade agreement with the U.S. without permits from the U.S. Department of Energy and the Federal Energy Regulatory Commission (“FERC”). The queue for approval is long with only three facilities (including most recently the Lake Charles LNG Project in Lake Charles, Louisiana) receiving approval from the Department of Energy and only one of those (the Sabine Pass project in Cameron Parish, Louisiana) receiving approval from FERC. Given the long construction lead times for these projects and political pressure from environmentalists and buyers of natural gas who want prices to remain low, it won’t be until 2016 when any significant volumes of LNG are exported from the continental United States. Rival producers such as Qatar, Australia and Indonesia are rapidly signing contracts with Japan, Korea and China to satisfy the long-term needs of those countries as America continues to delay the development of its LNG infrastructure. (more…)

  6. Checking Off the List: DOE Approves a Third Non-FTA LNG Export Authorization

    Wednesday, August 7, 2013 5:22 pm by and

    The Department of Energy (“DOE”) recently issued its third order authorizing the export of liquefied natural gas (“LNG”) to non-Free Trade Agreement (“FTA”) countries.  This latest order, for Lake Charles Exports, LLC (“Lake Charles”), will allow exports of up to 2 Bcf/day from the Lake Charles LNG terminal and bring the cumulative DOE-authorized non-FTA exports up to 5.6 Bcf/day. 

    Over the past several years, DOE has received approximately 19 applications to export LNG to non-FTA countries, and it has issued two export authorizations thus far.  The first was for Sabine Pass Liquefaction, LLC and the second was for Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC (together “Freeport”).  DOE is processing the remaining applications in accordance with a published list, with Dominion Cove Point LNG, LP being the next application in queue for review.  This next order is expected in six to eight weeks. (more…)

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