New Procedures and Analyses for LNG Export Authorizations: Opportunity for Public Comment

The U.S. Department of Energy (DOE) grants natural gas export authorizations to non-Free Trade Agreement (FTA) countries unless the proposed exports will “not be consistent with the public interest.”

DOE is changing its authorization procedures. DOE has also released two environmental analyses that it uses in its public interest determinations, and has announced that it is starting a new economic study that for use in its future public interest determinations.

Authorization Process

To date the authorization process has involved two steps by DOE: 1) conditional review and public interest determination in advance of the final environmental review by the Federal Energy Regulatory Commission (FERC), and 2) the final review and public interest determination following the environmental review.

The cost to apply for a DOE authorization is $20,000, while the FERC environmental review could cost up to $100 million. This cost structure encourages applications by companies that may not be serious about completing the entire review process.

Under the new one-step procedure, DOE will only review applications and make a final export determination after the environmental review is completed. This should give priority to the most commercially advanced projects.

As of June 1 DOE has given preliminary authorization to seven projects. One non-FTA export project has completed its FERC environmental assessment.

The proposed procedural changes as well as the two reports listed below are available for review and comment before July 21, 2014 here.

Environmental Impacts of LNG Exports

DOE has recently released two reports on environmental issues associated with natural gas exports:

• Environmental Impacts of Unconventional Natural Gas Development and Production. This report summarizes the current state of published descriptions of the potential environmental impacts of unconventional natural gas upstream operations within the Lower 48 United States.
• Life Cycle Greenhouse Gas Perspective on Exporting LNG from the United States. The Report compares life cycle GHG emissions from U.S. LNG exports to regional coal and other imported natural gas for electric power generation in Europe and Asia.

Final Note: Free Trade Agreement Countries

Natural gas export authorizations to FTA countries are automatically approved. The United States has Free Trade Agreements with 20 countries: Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru and Singapore.