(Deletes extraneous word "not" in last paragraph)
* Says output up elsewhere, also plenty of reserve capacity
* Pledges action in reviewing U.S. gas export applications
* US firms frustrated by delays in exporting gas
By Fredrik Dahl
VIENNA, June 30 The top U.S. energy official
said he believed the oil market could cope with any further
reduction of Iran's oil exports from the tightening of sanctions
on Tehran over its nuclear programme.
U.S. Energy Secretary Ernest Moniz also said on Sunday he
expected a "fair amount of action" by his department in 2013 in
evaluating applications by U.S. firms to export natural gas.
Companies hoping to ship gas abroad have been frustrated by
lengthy delays and rule changes as they await Department of
Energy approval of their applications.
"I'm planning to go through them as rapidly as I can," Moniz
said in an interview in Vienna.
As for Iran, U.S. lawmakers are embarking this summer on a
campaign to deal a deeper blow to its diminishing oil exports,
and analysts say the ultimate goal could be a near total
This could risk antagonizing China and India, the biggest
remaining buyers of Iranian crude, and could push oil prices
higher in a hit to the global economy.
Moniz said Iranian exports were not now a "dominant player
in the market", and was offset by increased production in the
United States and in Iraq as well as substantial reserve
capacity in some of the major OPEC producers such as Saudi
"So I would think that with further sanctions, the markets
could be quite resilient to that," said Moniz, who took office
last month. From a technical point of view, "we can certainly
manage a further reduction of Iranian exports", he added.
U.S. and European Union sanctions aimed at choking the flow
of oil money into Iran and forcing Tehran to negotiate curbing
its controversial nuclear programme slashed its crude exports
to 700,000 bpd in May, the lowest in decades, according to
industry sources and tanker-tracking data.
But crude prices are still lower than they were a year ago.
Iran says its nuclear programme is a peaceful bid to
generate electricity. But Washington and its allies suspect
Tehran is seeking the capability to make nuclear weapons.
Both parties in the U.S. Congress are pressing for tougher
sanctions, betting that a resurgence in U.S. oil output and
signs of ample global supply will prevent prices from rising.
Moniz said there was "quite a bit of potential for increased
production to offset any further reduction" of Iranian exports.
"ACTION" ON GAS EXPORT APPLICATIONS
Last week, U.S. President Barack Obama included a robust
endorsement of natural gas use around the world as he sought to
revive his stalled climate change agenda.
But how much the United States will supply remained unclear
as more than a dozen companies await approval to sell excess gas
to countries such as India and Japan, where it will fetch higher
prices than in the domestic market.
The Energy Department has so far approved two projects to
ship liquefied natural gas (LNG).
"I've committed to start that process expeditiously, and I
certainly expect to have substantial numbers of that (evaluation
of export license applications) this year," Moniz said.
The surge in shale gas production has helped make the United
States a leading natural gas producer and potentially a major
exporter. But some manufacturers and lawmakers have warned that
a rapid push to export LNG could lead to a rise in U.S. gas
prices and harm consumers and energy-intensive industries.
Moniz said applications would be handled on a case-by-case
basis and suggested he would not change the order in which his
department rules on applications - a policy made in midstream
that put some players at a disadvantage.
"My intent is to move forward with the queue as it is
spelled out," he said, making clear he did not agree with a
major LNG trade group, which said it was unlawful.
"Our lawyers feel it is certainly completely
If the Department of Energy waits about two months between
each export decision, as Acting Assistant Secretary for Fossil
Energy Christopher Smith has signalled, projects near the end of
queue might not get a DOE permit before late 2015.
Asked if this was a realistic timetable, Moniz said: "I
would say it's not unrealistic. But maybe we can do it faster."
(editing by Jane Baird)