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US LNG exports unlawful?

Hydrocarbon Engineering,

The American Public Gas Association has recently reported that Senator Markey has sent a letter to the US Department of Commerce Secretary, Penny Pritzker, arguing that exports of LNG may be unlawful and exposes the federal government to potential lawsuits.

Senator Markey’s claim regarding the legality of LNG export stems from the belief that the Energy Policy and Conservation Act of 1975 (EPCA) directed the Department of Commerce to issue regulations to prohibit the export of crude oil and natural gas. The claim also says that regulations banning the export of crude oil were promulgated, but no such regulation was ever issued for natural gas. This would therefore mean that since 1975, the government has failed to publish regulations in line with the Congressionally passed EPCA.

The failure to publish a regulation is important as it could expose the government to a lawsuit under the Administrative Procedures Act (APA), which is a remedy that may be used when agencies fail to implement provisions of law within a reasonable timeframe. The letter further notes that APA challenges have been successful against provisions that were delayed by 10 – 22 years, so a challenge to a 40 year oil provision of law would seem to have a good chance to be successful.

A successful suit?

If the suit were successful, the export of LNG would be prohibited for at least some amount of time. Such an action would inevitably prompt a response from Congress with the House quickly passing legislation to override the ban, and the outcome of the Senate appears uncertain.

The APGA has reportedly let its counsel know of the above development, consulted with America’s Energy Advantage, and will determine a course of action based in part on those conversations.

Adapted from press release by Claira Lloyd

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