An increased supply of liquefied natural gas (LNG) from the United States (US) will not be in the pipeline for Barbados, if the protest of an American lobby group succeeds.
On September 6, US company Crowley Advanced Energy officially applied to the US Department of Energy for approval to increase from 480 million cubic feet to 1.4 billion cubic feet the volume of LNG its subsidiary Carib Energy (USA) LLC can export, citing Barbados’ reliance on its supply.
Public Citizen, Inc., an advocacy organisation, has filed a motion to intervene in the proceedings and is protesting the proposed hike in LNG sales to Barbados, the Dominican Republic and to Antigua and Barbuda from January.
It is arguing that increasing the sale of LNG, which is re-exported from Puerto Rico, would harm that country’s natural gas supplies. The US Department of Energy is yet to issue its decision on the matter.
Barbados is increasingly reliant on imported LNG, which the Barbados National Oil Company Limited (BNOCL) converts to natural gas for domestic uses, BNOCL chief executive officer James Browne confirmed recently.
Crowley vice-president Matthew Jackson warned in his company’s submission to the US Department of Energy that “an interruption in Carib Energy’s LNG exports would leave the homes, businesses, and industries that rely on the BNOCL pipeline without gas supplies, causing a substantial disruption to the country’s economy”.
However, in an October 23 letter to the Office of Fossil Energy and Carbon Management US Department of Energy, Public Citizen, Inc. energy programme director Tyson Slocum, opposed the proposed LNG export expansion, saying:
“Puerto Rico is beset by acute shortages of natural gas essential for its domestic power and energy needs, as the island consumes almost 70 times more energy than it produces.
Crowley proposes a nearly 200 per cent increase in diverting LNG supplies from the EcoEléctrica LNG Terminal, despite EcoEléctrica serving as the island’s largest LNG import facility,” Slocum said in his correspondence.
“Shortages of natural gas in Puerto Rico force the island to increase its reliance on oil-fueled power. The Department of Energy is aware of Puerto Rico’s challenges with securing adequate LNG supplies for its domestic needs, as it was consulted last year on the Department of Homeland Security’s decision to grant a waiver from the Jones Act to allow critical supplies of LNG to reach the island.”
Slocum submitted that “Crowley’s request and supplement fail to establish that its proposed 200 per cent increase in LNG exports is consistent with the public interest”.
“The request and supplement fail to demonstrate whether Crowley’s proposal for a nearly 200 per cent increase in the redirection of LNG supplies from Puerto Rico will interfere with the island’s ability to procure adequate gas supplies for its domestic needs,” he asserted.
“Re-exporting LNG away from Puerto Rico could contribute to physical shortages on the island and cause price spikes for the island’s consumers. Crowley’s request and supplement only provide a generic discussion of total US natural gas supply and demand with omission of any data on how its proposal to remove LNG supplies will impact Puerto Rico.”
Paul F. Forshay, partner at Washington DC law firm Holland & Knight LLP, responded to Public Citizen, Inc. in an October 26 letter on behalf of Carib Energy.
He said the lobby group’s protest “mischaracterises Carib Energy’s pending application, wholly lacks merit and provides no credible basis for delaying, let alone denying, approval of the authorisation amendment requested by Carib Energy to its existing two-year blanket authorisation to re-export previously imported LNG from Puerto Rico”.
“If its amendment request were approved, Carib Energy would continue to re-export LNG previously imported into Puerto Rico via the EcoEléctrica LNG Terminal in approved. . . LNG containers transported on ocean-going vessels to Barbados and the Dominican Republic, and anticipates commencing exports to Antigua in January 2024,” Forshay said.
He told the US Department of Energy that Carib Energy “has shown that its requested increase in authorised re-export volumes . . . would play an integral role in meeting the gas supply needs of Barbados, the Dominican Republic and Antigua”.
“The crux of Public Citizen’s protest turns on its mistaken belief that Carib Energy’s amendment application proposes a major increase in re-exported volumes that would ‘divert’ gas supplies from Puerto Rico and ‘will interfere with the island’s ability to procure adequate gas supplies for its domestic needs’. Public Citizen’s contentions lack supporting evidence and cannot withstand even cursory scrutiny,” the attorney stated.
Forshay said while Public Citizen spoke of a 200 per cent increase in LNG exports to Barbados and the other countries “in reality, however, the incremental export volume increase requested by Carib represents a small fraction of the LNG volumes imported into Puerto Rico”.
“The 0.92 billion cubic feet increase requested by Carib Energy would constitute a monthly increase of approximately 38 333 over the 24-month period covered by Carib’s blanket authorisation. To date in 2023, LNG imports into Puerto Rico have averaged approximately six billion cubic feet through August.
“Thus, Carib’s increased monthly volumes constitute an amount equivalent to 0.6 per cent of the island’s monthly LNG imports, a minimal level of exports that poses no threat to Puerto Rico’s gas supplies,” Forshay added