DOE Proposes Changes to LNG Export Decision Procedures

on June 04, 2014 at 10:00 AM

Steams rises from the Kawasaki natural g

DOE has proposed to suspend its practice of issuing conditional decisions on LNG export applications involving non-FTA countries before completing the review required under National Environmental Policy Act.

On May 29, 2014, the Department of Energy’s (DOE) Office of Fossil Energy published a Notice of Proposed Procedures for Liquefied Natural Gas (LNG) Export Decisions concerning applications to export LNG to non-Free Trade Agreement (non-FTA) countries.  DOE has proposed to act on non-FTA LNG export applications for final public interest determinations only after completing the environmental and regulatory review required under the National Environmental Policy Act (NEPA), suspending is current practice of issuing conditional commitments prior to final authorization decisions.

DOE expects the proposed change, elicited by evolving market dynamics, to streamline the regulatory process for applicants, ensuring that applications that have undergone NEPA review are not delayed by their position in the current order of precedence.  DOE’s current practice of issuing conditional authorizations for non-FTA LNG export intended to provide regulatory certainty before project sponsors and the Federal Energy Regulatory Commission spend significant resources for NEPA review.  DOE noted that developments, including increasing willingness of market participants to dedicate resources for review before receiving conditional authorizations, has set the order of DOE decision-making based on readiness for final action, thereby prioritizing resources on more commercially advanced projects.


Non-FTA LNG Export Applications as of September 2013 (americanprogress)

DOE also announced plans to initiate a study to assess the potential impact of U.S. LNG export levels of 12-20 billion cubic feet per day (Bcf/d).  The Energy Information Administration (EIA) will update its 2012 LNG Export Study which considered export cases of 6-12 Bcf/d.  DOE will also commission an external analysis of the economic impact of increased LNG export range and its potential effects on the U.S. natural gas market.  Both the analyses will be made available for public comment.

According to DOE, the new export decision procedure would not affect the continued validity of already issued conditional orders.  For those applications, DOE will reconsider the conditional authorization – after NEPA review completion – based on information gathered in the environmental review and take appropriate final action.  DOE will continue to act on conditional authorization requests during the period in which the proposed procedures are under consideration.

DOE has also released two reports: “Draft Addendum To Environmental Review Documents Concerning Exports of Natural Gas From The United States” to better understand the public and environmental impacts of increased LNG exports and “Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States” to advance its commitment to mitigate emissions.  The notice of proposed procedures and the two reports will be open for public comment until July 21.