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DCCUMENT FESUME
04257 - [B3494753]
The New National Liquefied Natural Gas Import Policy Requires
Further Improvements. EMD-78-1S; B-178205. December 12, 1977. 20
pp + 9 appendices (32 ppp.).
Raport to the Congress; by Elmer B. Staats, Comptroller General.
Issue Area: Energy: Role of Fossil Fuels in Meeting Future Needs
(1609).
Contact: Energy and Minerals Div.
Budget Function: Natural Resources, Environment, and Energy:
Energy (305).
Organization Concerned: Department of Fnergy; Energy Resource[;
Council; Department of State; Deprtrtnt of Energy: Economic
Regulatory Administration; Federal Energy Regulatory
Commission; Department of Commerce; FederO. EneZgy
Administ:cation; Federal Power Commission.
Congressional Relevance: House Committee on InLterstate and
Foreign Commerce; Senate Committee on Energy and Natural
Resources; Congress.
Over one-fourth ol our total energy consumption i.;.
supplied by natural gas. Ore approach to increasing the supply
of natural gas is tc develop supplemental gas sources such as
imported liquefied natural gas (LNG). According to Government
and industzy statistics, imported LNG has the greatest potential
to adi to our Nation's supplemental gas supplies by 1985. LNG is
natural gas converted to liquid form by lowering its temperature
to -259 degrees F. Despite the expense of special eqg.pment for
liquefaction and oceangoing trarsportation and storage, the
great reduction in volume can make LNG economically feasible to
transport and store for subsequent regasification and use
elsewhere. As part of President Carter's National Energy Plan, a
new LNG import policy was established. The limitation on LNG
imports imposed under the previous administration was replaced
by a more flexible pclicy providing for a case-by-case analysis
of each project. Findings/conclusions: The new policy provides
for: national distribution to avoid a region being seriously
affected by a supply interruption, development of contingency
plans in case such interruption occurs, and prohibition of dock
construction in densely populated areas. This policy has not
alleviated uncertainties associated with imported LNG. Import
policy should be related to the overall energy program, and a
cz.mprehensive energy proposal should =learly indicate how m;.h
imported LNG will be needed and methods of obtaining it. There
is a need .or adequate criteria defining what would constitute
overdependence on imported LNG. As LNG imports incyaase, the
United States increases its vulnerability to supply disruptions
and price hikes. The policy does not address the problems
associated with t.'e lengthy regulatory process and curtailment
of low-priority LWG users. Unclear, inaccurate, and misleading
statements add to the confusion regarding LNG's future role in](ViewImageLocal?handle=hein.gao/gaobaawhi0001&div=1&collection=&method=preview&ext=.png&size=3)