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LNG export decision making procedure

Hydrocarbon Engineering,

The Natural Gas Act directs the Department of Energy (DOE) to grant LNG export authorizations to non-Free Trade Agreement (FTA) countries unless the Department finds that the proposed exports ‘will not be consistent with the public interest’.

Since receiving the first long-term application in 2010 to export LNG to non-FTA countries from the lower 48 states, the Department of Energy has been, and remains, committed to conducting a public interest determination process as required by the Natural Gas Act that is expeditious, judicious and fair

Proposed procedural change

Today, in order to reflect changing market dynamics, the DOE is proposing to review applications and make final public interest determinations only after completion of the review required by environmental laws and regulations that are included in the National Environmental Policy Act review (NEPA review), suspending its practice of issuing conditional commitments.

It is believed that, by removing the intermediate step of conditional decisions and setting the order of DOE decision-making based on readiness for final action, DOE will prioritise resources on the more commercially advanced projects.

The DOE holds that the proposed procedural change will improve the quality of information on which it makes its public interest determinations. By considering for approval those projects that are more likely to actually be constructed, DOE will be able to base its decision on a more accurate evaluation of the project’s impact on the public interest. The DOE will also be better positioned to judge the cumulative market impacts of its authorizations in its public interest review.

In an evolving market, this change offers an opportunity for streamlining the regulatory process for applicants, ensuring that applications that have completed NEPA review will not be delayed by their position in the current order of precedence.

The Department is issuing the Notice of proposed Procedures for LNG Export Decisions for a 45-day public review and comment period.

Economic impact study

In addition, the Department will initiate an updated economic study and is releasing two environmental reports that address the environmental footprint of unconventional natural gas production and the lifecycle greenhouse gas impacts of US LNG exports.

Using more recent data from sources like the Annual Energy Outlook 2014, the US Energy Information Administration (EIA) will update its 2012 LNG Export Study. Following the update, the DOE will again contract for an external analysis of the economic impact of the increased range of LNG exports and other effects that LNG exports might have on the US natural gas market.

Environmental reports

In order to better inform the Department and the public of the environmental impacts of increased LNG exports, the DOE elected to prepare two additional reports on environmental issue, beyond what is required for the NEPA.

The first report reviewed unconventional natural gas exploration and production activities. The second was conducted in line with the Administration’s commitment to the mitigation of greenhouse gas emissions, and is titled ‘Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States’.

Both reports are being made available for 45-days, after which the reports and comments received from the public will be considered by the Department in its public interest determinations related to applications to export LNG to non-FTA countries.

Adapted from a press release by Emma McAleavey. View more LNG news at

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