As of the end of October, the Department of Energy (DOE) had 18 applications pending for authority to export liquefied natural gas (LNG).

International demand is growing and expert studies say the LNG market will need 15 billion cubic feet per day (bcf/d) more in five years.

The question causing angst in the natural gas industry: Can DOE and the Federal Energy Regulatory Commission (FERC), which permit LNG exports and the LNG physical facilities, respectively, license exports in time for US producers to act before competitors grab that growing world demand?

Timing is crucial for US exporters, since LNG export facilities are already being built in places like Australia and Qatar. The current regulatory system, designed to protect the US against gas scarcity, can take two years or more for full approvals.

DOE and FERC have fully approved just one terminal for non-FTA exports, Cheniere Energy’s Sabine Pass, which is slated for operation in 2015.

Of the 18 pending applications, 15 want authority to export to nations without US Free Trade Agreements (FTAs). Export permits for FTA countries are virtually automatic, but most major LNG importers worldwide, like Japan and Taiwan, do not have FTAs with the US.

The applications, with Sabine Pass, total about 27.5 bcf/d, including 24 bcf/d of non-FTA authority. That’s over one-third of US daily consumption, and 85% of the current world trade in LNG.

DOE had fewer than half a dozen applications two years ago, but as the number rose, the department put the brakes on all approvals while it tried to figure out the potential effects of such massive exports on domestic supply and price. A macroeconomic assessment, due last spring, has just been released.

Meanwhile, applications have continued to accumulate.

The applicants are also in various stages of filing or pre-filing for FERC permits to build multi-billion-dollar liquefaction plants and terminal infrastructure, at sites from the Pacific Northwest to the Gulf of Mexico. Their approval timing depends heavily on the extent of site-specific environmental review FERC decides is required in each case.

Independent economists have said export markets simply won’t support anywhere near the volume of exports proposed, so many if not most of the terminals applying will never be built, no matter what DOE and FERC do. A Brookings Insitution study has recommended DOE simply permit all exports and let the market sort out the actual winners and losers.

US export opponents are using the permit process to argue that natural gas exports won’t be in the “public interest,” the standard under federal law.

US chemicals manufacturers benefiting from current low domestic natural gas prices don’t want US gas markets exposed to higher-priced world markets. They are pressing DOE to consider the shale gas discoveries a strategic national energy resource and keep most of it in the country.

The low price of domestic natural gas for feedstock and fuel is creating a newfound competitiveness for US manufacturers in international markets. Those manufacturers argue that their finished goods are higher value exports than LNG would be.

Trade experts warn that approach might contravene World Trade Organization (WTO) standards by effectively subsidizing some US exports. At the WTO, the US is among the nations now claiming that China is subsidizing some industries by restricting rare earths exports. China denies that claim.

But other major consumers, including the electric power industry, are also wary of natural gas price volatility. Many observers expect DOE to try to strike a balance and approve some level of exports, but not all those in the application queue.

US environmental groups opposing hydraulic fracturing are also using the permit processes at both DOE and FERC, and they oppose any exports. They’re arguing that environmental reviews must be expanded to consider the negative effects of increased drilling and other upstream activity that will come from LNG exports.

So far, that argument has lost, before regulators and a court. FERC has specifically rejected it as asking environmental reviewers to speculate about potential future upstream activity.

And there’s an additional worry for US exporters and their customers: US permits are never really final. Economist Kevin Book of ClearView Energy Partners notes several Executive Orders, dating back as far as 1953, give the Secretary of Energy broad authority to not allow – or halt – LNG exports in the name of national security.

Even the Sabine Pass permits are conditional, and analyst Teri Viswanath of BNP Paribas said that gives foreign buyers pause. “You’re asking people to make a multi-billion dollar bet on a conditional license,” she said. “Asian buyers want to know: Can we really depend on this?”