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May 19, 2013

Energy Dept. backs LNG export plan

WASHINGTON — 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, Texas. The DOE 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.

Freeport is the second export project to win Energy Department authorization.

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

A drilling boom has lowered natural gas prices while boosting production by one-third since 2005. Natural gas production reached an all-time high of 25.3 trillion cubic feet last year, according to the U.S. Energy Information Administration.

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