The U.S. needs to act quickly to take advantage of overseas demand for its glut of natural gas or lose market share to international competitors, Dominion Resources Inc. Chief Executive Officer Thomas Farrell said.
“The U.S. must act very soon -- or the door is going to close and our country will have missed a major economic opportunity,” Farrell said today during a luncheon speech at the U.S. Chamber of Commerce in Washington.
Dominion plans to build a facility to export liquefied natural gas from its Cove Point terminal in Maryland by 2017. The Richmond, Virginia-based company on April 1 filed an application with the U.S. Federal Energy Regulatory Commission for the project, estimated to cost as much as $3.8 billion.
The U.S. has a glut of natural gas created as producers use the drilling technique known as hydraulic fracturing, or fracking, to extract the fuel from shale. Dominion and San Diego-based Sempra Energy Co. are among companies seeking Energy Department approval to export gas to nations that don’t have a free-trade agreement with the U.S.
The U.S. faces competition from countries including Australia, Canada, Indonesia and Qatar for natural gas exports, Farrell said. “We are not the only nation in the world that has this resource available. It’s a buyers’ market out there. We need to keep it moving if we want to be able to take advantage of this resource.”
The “critical path for us” will be the FERC’s environmental review of the project, because Dominion expects the Energy Department’s approval soon, Farrell said in comments to reporters after his speech. Dominion believes the FERC’s review will be complete by this time next year, he said.
The FERC, which must authorize construction of such projects, a year ago approved Cheniere Energy Inc.’s plan for an export terminal at Sabine Pass in southwest Louisiana. It is the only gas-export project so far to win the regulator’s support.
The Energy Department will probably approve each of 19 remaining export projects under review, though not all are likely to be built, according to a study issued yesterday by Bloomberg Government and Bloomberg New Energy Finance.
Japan, the world’s third-largest economy, is the primary importer of natural gas, with about 36 percent of global consumption in 2012, the report said. Dominion plans to ship gas from the Cove Point facility to Japan and India, Farrell said.