LNG Exports
Susan's current work is focused on LNG markets and the prospects for U.S. LNG exports. In addition to extensive coverage of this issue in her book, some of her publications related to U.S. LNG exports are listed below. Please also see below for a general discussion about the Department of Energy's (DOE) LNG export approval process and links to key DOE documents, including links to the most recent proposed change in procedure announced by the DOE on May 29, 2014.
Select Publications by Susan on U.S. LNG Exports
Susan L. Sakmar, Reply Brief Submitted to the U.S. Department of Energy (DOE) in Response to NERA Economic
Study (Feb. 24, 2013) posted as Comment # 168 at http://www.fossil.energy.gov/programs/gasregulation/authorizations/export_study/reply_comments/Susan_Sakmar02_25_13_Redacted.pdf
What’s Next for US LNG Exports – A Rulemaking?, Gastech News, Nov. 7, 2014,
http://www.gastechnews.com/lng/whats-next-for-us-lng-exports-a-rulemaking/
US LNG Exports: March Madness and the Road to the Final Four Projects, Natural Gas Europe, http://www.naturalgaseurope.com/us-lng-exports-final-four-projects. (this article includes in exclusive "March Madness Bracket" for the top 16 U.S. LNG Export projects).
America’s Natural Gas: From Shale Gas to LNG Exports, 3 Harv. Bus. L. Rev. Online 22 (2012), http://www.hblr.org/?p=2572.
Politics and US LNG Export Projects Heat Up, Natural Gas & Electricity Journal, 29:1-9, Wiley Periodicals, Oct. 2012, available at http://onlinelibrary.wiley.com/doi/10.1002/gas.21636/abstract
From Shale Gas to LNG Exports: What Should America Do With Its Natural Gas? Sanford Energy Club Journal, available at energyclub.stanford.edu/journal
Department of Energy (DOE) LNG Export Approvals to Date
As of August 28, 2014, the DOE has approved a total of 40.96 Bcf/d for LNG exports. This is over half of current U.S. natural gas production of approximately 70 Bcf/d. The 40.96 Bcf/d approved for export includes many FTA only applications, which must be automatically approved by the DOE.
The DOE must apply a "public interest" test for non-FTA export applications. A total of 10.52 Bcf/d has been approved for non-FTA exports of which 2.2 Bcf/d has received final approval from both DOE and FERC and is under construction (Cheniere's Sabine Pass Liquefaction terminal).
List of current LNG Export Applications of the Lower 48 States before the Department of Energy (as of August 28, 2014).
Summary of LNG Export Applications
For Listing of all LNG Export Applications before the Department of Energy, please click here.
August 15, 2014 Update: DOE Adopts Proposed Procedures for LNG Export Decisions
On August 15, 2014, the Department of Energy’s (DOE) Office of Fossil Energy announced its Procedures for Liquefied Natural Gas Export Decisions (Procedures). Pursuant to these Procedures, DOE will act on applications to export liquefied natural gas (LNG) from the lower-48 states to non-FTA countries only after the review required by the National Environmental Policy Act (NEPA) has been completed, suspending its practice of issuing conditional decisions prior to final authorization decisions.
These Procedures will not affect the continued validity of the conditional orders DOE has already issued. For those applications, DOE will proceed as explained in the conditional orders: when the NEPA review process for those projects is complete, DOE will reconsider the conditional authorization in light of the information gathered in the environmental review and take appropriate final action.
Federal Register Notice (August 15, 2014)
On May 29, 2014, DOE announced the proposed procedural changes. In response to this proposal, any person had the opportunity to file comments. The comment period closed on July 21, 2014. All comments have been posted to the “Comments” link below.
Comments
Federal Register Notice (May 29, 2014)
Special Note: The DOE announced it will conduct a new macroeconomic study on LNG exports. This study is still outstanding as of August 15, 2014.
DRAFT ADDENDUM TO ENVIRONMENTAL REVIEW DOCUMENTS CONCERNING EXPORTS OF NATURAL GAS FROM THE UNITED STATES
On August 15, 2014, the Department of Energy's Office of Fossil Energy published the final Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States (Addendum). The purpose of the Addendum is to provide additional information to the public regarding the potential environmental impacts of unconventional natural gas exploration and production activities. DOE has received many comments related to concerns about the potential impacts from increased development of unconventional natural gas resources in the United States, particularly production that involves hydraulic fracturing. While not required by the National Environmental Policy Act (NEPA), DOE has prepared this Addendum in an effort to be responsive to the public and provide the most current information available.
This Addendum is intended to provide information only on the impact areas most often associated with unconventional natural gas production. The Addendum is not the result of new analysis or research, but rather is based on DOE’s review of existing studies and analyses. A key resource in preparing the Addendum was the report Environmental Impacts of Unconventional Natural Gas Development and Production (May 29, 2014), prepared by the National Energy Technology Laboratory, a DOE Laboratory. A link to that report is also included below.
Final Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States (Report)
Federal Register Notice (August 15, 2014)
Environmental Impacts of Unconventional Natural Gas Development and Production (Background information)
On May 29, 2014, DOE announced the availability for public review and comment the Draft Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States (Draft Addendum). DOE made this Draft Addendum available for public review and comment. The comment period closed on July 21, 2014. DOE considered all comments prior to developing the final Addendum.
Federal Register Notice (May 29, 2014)
Draft Addendum (Report)
Comments
May 29, 2014 Update: DOE Notice of Proposed Change of Procedure
On May 29, 2014, the Department of Energy ("DOE" or "the Department") announced it is proposing a change to its procedures to reflect changing market conditions and ensure a more efficient process that will also enable the DOE to have more complete information when it makes public interest determinations for LNG exports to non-Free Trade Agreement (FTA) countries. In addition, the DOE will initiate an updated macroeconomic study and is releasing two environmental reports that explore the environmental impacts of unconventional natural gas production and lifecycle greenhouse gas impact of U.S. LNG exports.
Proposed Process Change
The Department proposes to 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 (NEPA), suspending its practice of issuing conditional commitments. The Department issued a Notice of Proposed Procedures for Liquefied Natural Gas Export Decisions for public comment. Comments were due July 21, 2014 and all submitted comments are publicly available for review. The Department will continue to act on the request for conditional authorization currently under review during the period when the procedures proposed in this Notice are under consideration.
Notice of Proposed Procedures for Liquefied Natural Gas Export Decisions
Economic Impact Study
DOE plans to undertake an economic study in order to gain a better understanding of how potential U.S. LNG exports between 12 and 20 billion cubic feet per day (Bcf/d) could affect the public interest. Using more recent data from sources like the Annual Energy Outlook 2014, the Energy Information Administration (EIA) will update its 2012 LNG Export Study, which only looked at export cases of 6 and 12 Bcf/d. Following the EIA update, DOE will again contract for an external analysis of the economic impact of this increased range of LNG exports and other effects that LNG exports might have on the U.S. natural gas market. While these studies are underway, the Department will continue to act on applications as stated above. To date, the Department has issued final authorization for export to non-FTA countries at a rate of 2.2 Bcf/d. If at any future time the cumulative export authorizations approach the high end of export cases examined, the Department will conduct additional studies as needed to understand the impact of higher export ranges. At all levels, the cumulative impacts will remain a key criterion in assessing the public interest.
Both the EIA study and the external analysis of economic impacts will be made available for public comment.
Request for an Update of EIA’s January 2012 Study of Liquefied Natural Gas Export Scenarios
Release of Environmental Documents
To better inform the Department and the public of the environmental impacts of increased LNG exports, the Department elected to prepare two additional reports of environmental issues beyond what is required for NEPA.
The Department released the Draft Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States. The Draft Addendum is available for public comment through July 21, 2014. Comment on the Draft Addendum will be considered in preparation of the Final Addendum. Once final, the Addendum, along with other environmental information, will be considered by the Department in its public interest determinations in connection with applications to export LNG to non-FTA countries.
Draft Addendum to Environmental Review Documents Concerning Exports of Natural Gas from the United States
The Department also released the Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States. Comments on the LCA GHG report are due July 21, 2014. The LCA GHG Report and public comments received in response thereto will be considered by the Department in its public interest determinations in connection with applications to export LNG to non-FTA countries.
Life Cycle Greenhouse Gas Perspective on Exporting LNG from the United States
About the DOE Export Approval Process (subject to change per the May 29, 2014 Notice of Proposed Change of Procedure):
As part of a broader effort to further inform decisions related to LNG exports, the DOE commissioned NERA Economic Consulting to conduct a third party study in order to gain a better understanding of how U.S. LNG exports could affect the public interest, with an emphasis on the energy and manufacturing sectors. The DOE released that study on December 5, 2012 and made it available for public review and comment. The DOE also posted the final NERA report into the pending export application dockets. The report and resulting comments will be taken into consideration as the Department makes its public interest determinations in each case.
U.S. Federal law generally requires approval of natural gas exports to countries that have a free trade agreement (FTA) with the United States. For countries that do not have a free trade agreement (so called non-FTA countries) with the U.S., the DOE is required to grant applications for export authorizations unless the Department finds that the proposed exports "will not be consistent with the public interest." Factors for consideration include economic, energy security, and environmental impacts.
The DOE has indicated it will begin to act on the applications on a case-by-case basis. The Energy Department expects to act first upon applications for which the applicants have commenced the pre-filing process at the Federal Energy Regulatory Commission (FERC) as of December 5, 2012, in the general order in which the Department received them.
ORDER OF PRECEDENCE FOR NON-FTA LNG EXPORT APPLICATIONS This document lists the order of precedence for processing non-FTA LNG export applications before the Department of Energy (last revised March 24, 2014) http://www.energy.gov/fe/downloads/order-precedence-non-fta-lng-export-applications
Following disposition of those applications that have pre-filed with FERC, the Energy Department expects to act upon the rest of the pending applications – and any others submitted - in the order received.
SUMMARY OF LNG EXPORT APPLICATIONS List of current LNG Export Applications before the Department of Energy (as of March 24, 2014). http://www.energy.gov/fe/downloads/summary-lng-export-applications
Summary of LNG Export Applications (as of April 2, 2013) (for historical context).
Other DOE documents related to U.S. LNG exports can be downloaded here:
Federal Register Notice of Availability of the LNG Export Study [209KB PDF]
EIA Analysis (Study - Part 1) [2.48MB PDF]
NERA Economic Consulting Analysis (Study - Part 2) [4MB PDF]
Initial Comments
Reply Comments
Procedural Order, January 28, 2013 [371KB PDF]
Susan L. Sakmar, Reply Brief Submitted to the U.S. Department of Energy (DOE) in Response to the NERA Economic
Study (LNG Study) (Feb. 24, 2013) posted as Comment # 168 at http://www.fossil.energy.gov/programs/gasregulation/authorizations/export_study/reply_comments/Susan_Sakmar02_25_13_Redacted.pdf
Select DOE Orders and Announcements on LNG Exports
ENERGY DEPARTMENT AUTHORIZES JORDAN COVE TO EXPORT LIQUEFIED NATURAL GAS Terminal in Coos Bay, Oregon Authorized to Export Liquefied Natural Gas to Non-Free Trade Agreement Countries http://www.energy.gov/articles/energy-department-authorizes-jordan-cove-export-liquefied-natural-gas
ORDER NO. 3413: JORDAN COVE LNG ORDER CONDITIONALLY GRANTING LONG-TERM MULTI-CONTRACT AUTHORIZATION TO EXPORT LIQUEFIED NATURAL GAS BY VESSEL FROM THE JORDAN COVE LNG TERMINAL IN COOS BAY, OREGON TO NON-FREE TRADE AGREEMENT NATIONS http://www.energy.gov/fe/downloads/order-no-3413-jordan-cove-lng
DOMINION COVE POINT LNG, LP – FE DKT. NO 11-128-LNG ORDER CONDITIONALLY GRANTING LONG-TERM MULTI-CONTRACT AUTHORIZATION TO EXPORT LIQUEFIED NATURAL GAS BY VESSEL FROM THE COVE POINT LNG TERMINAL TO NON-FREE TRADE AGREEMENT NATIONS http://www.energy.gov/downloads/dominion-cove-point-lng-lp-fe-dkt-no-11-128-lng
LNG Exports Update (August 7, 2013): DOE Approves Third US LNG Export Project to Non-FTA Countries
On Wednesday, August 7, 2013, the US Department of Energy (US DOE) announced it had approved the third US LNG export project by granting Lake Charles Exports LLC conditional authorization to ship up to 2 Bcf/d of LNG to countries with which the US does not have a free trade agreement, so-called “non-FTA” countries.
The approval follows just a couple of months after the DOE gave the green light to Freeport’s export project.
The Lake Charles approval was sooner than many had expected but not soon enough for some US policy makers and industry leaders that have been pushing the White House to pick up the pace on approvals, claiming that the “window of opportunity” for US LNG exports was closing. U.S. Sen. Lisa Murkowski, R-Alaska, has been a vocal supporter of energy exports as a way to boost a struggling US economy. Just a day before the Lake Charles approval, Sen. Murkowski, the ranking member of the Senate Energy and Natural Resources Committee, released a white paper outlining her support for exporting LNG to non-FTA countries. Sen. Murkowski’s home state of Alaska currently has the only existing US LNG export facility, the tiny Kenai LNG facility, which came on-line in 1969 to export LNG to Japan. After more than 40 years of exports, Kenai LNG is currently sitting idle while more gas supplies are sought. Somewhat ironically, it has also been suggested that Kenai LNG might need to be converted to an LNG import terminal if gas production in the Kenai area isn’t sufficient to meet local demand.
With the latest approval of Lake Charles, the DOE still has about 20 pending applications to export LNG to non-FTA countries and still has not set out a timeline for additional approvals. For now, DOE has indicated it will review each application on a case-by-case basis while giving preference to companies that are already moving through the pre-filing process at the Federal Energy Regulatory Commission (FERC). The next project in the queue awaiting DOE's approval is Dominion Resources Inc.'s Cove Point, Md., LNG import terminal.
Heeding calls by a group of industrial users of natural gas and manufactures represented by America’s Energy Advantage the DOE indicated that it will continue to take a “measured approach” in reviewing the other pending applications and will continue to assess the cumulative impacts of each succeeding request for export authorization on the public interest with due regard to the effect on domestic natural gas supply and demand fundamentals. In keeping with the performance of its statutory responsibilities, DOE has the authority to attach appropriate and necessary terms and conditions to authorizations. For example, both the Freeport and Lake Charles projects had applied for a 25-year export period but the DOE reduced this to a 20-year term beginning from the date of first exports in part because the LNG Export Study that DOE commissioned to determine the economic benefits of LNG exports contained projections over a 20-year period.
Going forward, the DOE will continue to proceed with caution in approving additional export projects for several valid reasons the DOE has articulated:
(1) the LNG Export Study, like any study based on assumptions and economic projections, is inherently limited in its predictive accuracy;
(2) applications to export significant quantities of domestically produced LNG are a new phenomena with uncertain impacts; and
(3) the market for natural gas has experienced rapid reversals in the past and is again changing rapidly due to economic, technological, and regulatory developments.
In short, the DOE has correctly recognized that “The market of the future very likely will not resemble the market of today.”
LNG Exports Update (May 17, 2013): DOE Approves 2nd LNG Export Project - Freeport LNG
According to a news release issued by Freeport LNG, the Energy Department (DOE) has conditionally authorized Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC (FLEX) to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States from the Freeport LNG Terminal on Quintana Island, Texas. Freeport previously received approval to export LNG from this facility to FTA countries on February 10, 2011. Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export at a rate of up to 1.4 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years. The Department granted the first authorization to export LNG to non-FTA countries in May 2011 for the Sabine Pass LNG Terminal in Cameron Parish, Louisiana at a rate of up to 2.2 Bcf/d.
The DOE's full conditional authorization can be found at http://energy.gov/sites/prod/files/2013/05/f0/ord3282.pdf
Select Publications by Susan on U.S. LNG Exports
Susan L. Sakmar, Reply Brief Submitted to the U.S. Department of Energy (DOE) in Response to NERA Economic
Study (Feb. 24, 2013) posted as Comment # 168 at http://www.fossil.energy.gov/programs/gasregulation/authorizations/export_study/reply_comments/Susan_Sakmar02_25_13_Redacted.pdf
What’s Next for US LNG Exports – A Rulemaking?, Gastech News, Nov. 7, 2014,
http://www.gastechnews.com/lng/whats-next-for-us-lng-exports-a-rulemaking/
US LNG Exports: March Madness and the Road to the Final Four Projects, Natural Gas Europe, http://www.naturalgaseurope.com/us-lng-exports-final-four-projects. (this article includes in exclusive "March Madness Bracket" for the top 16 U.S. LNG Export projects).
America’s Natural Gas: From Shale Gas to LNG Exports, 3 Harv. Bus. L. Rev. Online 22 (2012), http://www.hblr.org/?p=2572.
Politics and US LNG Export Projects Heat Up, Natural Gas & Electricity Journal, 29:1-9, Wiley Periodicals, Oct. 2012, available at http://onlinelibrary.wiley.com/doi/10.1002/gas.21636/abstract
From Shale Gas to LNG Exports: What Should America Do With Its Natural Gas? Sanford Energy Club Journal, available at energyclub.stanford.edu/journal
Department of Energy (DOE) LNG Export Approvals to Date
As of August 28, 2014, the DOE has approved a total of 40.96 Bcf/d for LNG exports. This is over half of current U.S. natural gas production of approximately 70 Bcf/d. The 40.96 Bcf/d approved for export includes many FTA only applications, which must be automatically approved by the DOE.
The DOE must apply a "public interest" test for non-FTA export applications. A total of 10.52 Bcf/d has been approved for non-FTA exports of which 2.2 Bcf/d has received final approval from both DOE and FERC and is under construction (Cheniere's Sabine Pass Liquefaction terminal).
List of current LNG Export Applications of the Lower 48 States before the Department of Energy (as of August 28, 2014).
Summary of LNG Export Applications
For Listing of all LNG Export Applications before the Department of Energy, please click here.
August 15, 2014 Update: DOE Adopts Proposed Procedures for LNG Export Decisions
On August 15, 2014, the Department of Energy’s (DOE) Office of Fossil Energy announced its Procedures for Liquefied Natural Gas Export Decisions (Procedures). Pursuant to these Procedures, DOE will act on applications to export liquefied natural gas (LNG) from the lower-48 states to non-FTA countries only after the review required by the National Environmental Policy Act (NEPA) has been completed, suspending its practice of issuing conditional decisions prior to final authorization decisions.
These Procedures will not affect the continued validity of the conditional orders DOE has already issued. For those applications, DOE will proceed as explained in the conditional orders: when the NEPA review process for those projects is complete, DOE will reconsider the conditional authorization in light of the information gathered in the environmental review and take appropriate final action.
Federal Register Notice (August 15, 2014)
On May 29, 2014, DOE announced the proposed procedural changes. In response to this proposal, any person had the opportunity to file comments. The comment period closed on July 21, 2014. All comments have been posted to the “Comments” link below.
Comments
Federal Register Notice (May 29, 2014)
Special Note: The DOE announced it will conduct a new macroeconomic study on LNG exports. This study is still outstanding as of August 15, 2014.
DRAFT ADDENDUM TO ENVIRONMENTAL REVIEW DOCUMENTS CONCERNING EXPORTS OF NATURAL GAS FROM THE UNITED STATES
On August 15, 2014, the Department of Energy's Office of Fossil Energy published the final Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States (Addendum). The purpose of the Addendum is to provide additional information to the public regarding the potential environmental impacts of unconventional natural gas exploration and production activities. DOE has received many comments related to concerns about the potential impacts from increased development of unconventional natural gas resources in the United States, particularly production that involves hydraulic fracturing. While not required by the National Environmental Policy Act (NEPA), DOE has prepared this Addendum in an effort to be responsive to the public and provide the most current information available.
This Addendum is intended to provide information only on the impact areas most often associated with unconventional natural gas production. The Addendum is not the result of new analysis or research, but rather is based on DOE’s review of existing studies and analyses. A key resource in preparing the Addendum was the report Environmental Impacts of Unconventional Natural Gas Development and Production (May 29, 2014), prepared by the National Energy Technology Laboratory, a DOE Laboratory. A link to that report is also included below.
Final Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States (Report)
Federal Register Notice (August 15, 2014)
Environmental Impacts of Unconventional Natural Gas Development and Production (Background information)
On May 29, 2014, DOE announced the availability for public review and comment the Draft Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States (Draft Addendum). DOE made this Draft Addendum available for public review and comment. The comment period closed on July 21, 2014. DOE considered all comments prior to developing the final Addendum.
Federal Register Notice (May 29, 2014)
Draft Addendum (Report)
Comments
May 29, 2014 Update: DOE Notice of Proposed Change of Procedure
On May 29, 2014, the Department of Energy ("DOE" or "the Department") announced it is proposing a change to its procedures to reflect changing market conditions and ensure a more efficient process that will also enable the DOE to have more complete information when it makes public interest determinations for LNG exports to non-Free Trade Agreement (FTA) countries. In addition, the DOE will initiate an updated macroeconomic study and is releasing two environmental reports that explore the environmental impacts of unconventional natural gas production and lifecycle greenhouse gas impact of U.S. LNG exports.
Proposed Process Change
The Department proposes to 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 (NEPA), suspending its practice of issuing conditional commitments. The Department issued a Notice of Proposed Procedures for Liquefied Natural Gas Export Decisions for public comment. Comments were due July 21, 2014 and all submitted comments are publicly available for review. The Department will continue to act on the request for conditional authorization currently under review during the period when the procedures proposed in this Notice are under consideration.
Notice of Proposed Procedures for Liquefied Natural Gas Export Decisions
Economic Impact Study
DOE plans to undertake an economic study in order to gain a better understanding of how potential U.S. LNG exports between 12 and 20 billion cubic feet per day (Bcf/d) could affect the public interest. Using more recent data from sources like the Annual Energy Outlook 2014, the Energy Information Administration (EIA) will update its 2012 LNG Export Study, which only looked at export cases of 6 and 12 Bcf/d. Following the EIA update, DOE will again contract for an external analysis of the economic impact of this increased range of LNG exports and other effects that LNG exports might have on the U.S. natural gas market. While these studies are underway, the Department will continue to act on applications as stated above. To date, the Department has issued final authorization for export to non-FTA countries at a rate of 2.2 Bcf/d. If at any future time the cumulative export authorizations approach the high end of export cases examined, the Department will conduct additional studies as needed to understand the impact of higher export ranges. At all levels, the cumulative impacts will remain a key criterion in assessing the public interest.
Both the EIA study and the external analysis of economic impacts will be made available for public comment.
Request for an Update of EIA’s January 2012 Study of Liquefied Natural Gas Export Scenarios
Release of Environmental Documents
To better inform the Department and the public of the environmental impacts of increased LNG exports, the Department elected to prepare two additional reports of environmental issues beyond what is required for NEPA.
The Department released the Draft Addendum To Environmental Review Documents Concerning Exports Of Natural Gas From The United States. The Draft Addendum is available for public comment through July 21, 2014. Comment on the Draft Addendum will be considered in preparation of the Final Addendum. Once final, the Addendum, along with other environmental information, will be considered by the Department in its public interest determinations in connection with applications to export LNG to non-FTA countries.
Draft Addendum to Environmental Review Documents Concerning Exports of Natural Gas from the United States
The Department also released the Life Cycle Greenhouse Gas Perspective on Exporting Liquefied Natural Gas from the United States. Comments on the LCA GHG report are due July 21, 2014. The LCA GHG Report and public comments received in response thereto will be considered by the Department in its public interest determinations in connection with applications to export LNG to non-FTA countries.
Life Cycle Greenhouse Gas Perspective on Exporting LNG from the United States
About the DOE Export Approval Process (subject to change per the May 29, 2014 Notice of Proposed Change of Procedure):
As part of a broader effort to further inform decisions related to LNG exports, the DOE commissioned NERA Economic Consulting to conduct a third party study in order to gain a better understanding of how U.S. LNG exports could affect the public interest, with an emphasis on the energy and manufacturing sectors. The DOE released that study on December 5, 2012 and made it available for public review and comment. The DOE also posted the final NERA report into the pending export application dockets. The report and resulting comments will be taken into consideration as the Department makes its public interest determinations in each case.
U.S. Federal law generally requires approval of natural gas exports to countries that have a free trade agreement (FTA) with the United States. For countries that do not have a free trade agreement (so called non-FTA countries) with the U.S., the DOE is required to grant applications for export authorizations unless the Department finds that the proposed exports "will not be consistent with the public interest." Factors for consideration include economic, energy security, and environmental impacts.
The DOE has indicated it will begin to act on the applications on a case-by-case basis. The Energy Department expects to act first upon applications for which the applicants have commenced the pre-filing process at the Federal Energy Regulatory Commission (FERC) as of December 5, 2012, in the general order in which the Department received them.
ORDER OF PRECEDENCE FOR NON-FTA LNG EXPORT APPLICATIONS This document lists the order of precedence for processing non-FTA LNG export applications before the Department of Energy (last revised March 24, 2014) http://www.energy.gov/fe/downloads/order-precedence-non-fta-lng-export-applications
Following disposition of those applications that have pre-filed with FERC, the Energy Department expects to act upon the rest of the pending applications – and any others submitted - in the order received.
SUMMARY OF LNG EXPORT APPLICATIONS List of current LNG Export Applications before the Department of Energy (as of March 24, 2014). http://www.energy.gov/fe/downloads/summary-lng-export-applications
Summary of LNG Export Applications (as of April 2, 2013) (for historical context).
Other DOE documents related to U.S. LNG exports can be downloaded here:
Federal Register Notice of Availability of the LNG Export Study [209KB PDF]
EIA Analysis (Study - Part 1) [2.48MB PDF]
NERA Economic Consulting Analysis (Study - Part 2) [4MB PDF]
Initial Comments
Reply Comments
Procedural Order, January 28, 2013 [371KB PDF]
Susan L. Sakmar, Reply Brief Submitted to the U.S. Department of Energy (DOE) in Response to the NERA Economic
Study (LNG Study) (Feb. 24, 2013) posted as Comment # 168 at http://www.fossil.energy.gov/programs/gasregulation/authorizations/export_study/reply_comments/Susan_Sakmar02_25_13_Redacted.pdf
Select DOE Orders and Announcements on LNG Exports
ENERGY DEPARTMENT AUTHORIZES JORDAN COVE TO EXPORT LIQUEFIED NATURAL GAS Terminal in Coos Bay, Oregon Authorized to Export Liquefied Natural Gas to Non-Free Trade Agreement Countries http://www.energy.gov/articles/energy-department-authorizes-jordan-cove-export-liquefied-natural-gas
ORDER NO. 3413: JORDAN COVE LNG ORDER CONDITIONALLY GRANTING LONG-TERM MULTI-CONTRACT AUTHORIZATION TO EXPORT LIQUEFIED NATURAL GAS BY VESSEL FROM THE JORDAN COVE LNG TERMINAL IN COOS BAY, OREGON TO NON-FREE TRADE AGREEMENT NATIONS http://www.energy.gov/fe/downloads/order-no-3413-jordan-cove-lng
DOMINION COVE POINT LNG, LP – FE DKT. NO 11-128-LNG ORDER CONDITIONALLY GRANTING LONG-TERM MULTI-CONTRACT AUTHORIZATION TO EXPORT LIQUEFIED NATURAL GAS BY VESSEL FROM THE COVE POINT LNG TERMINAL TO NON-FREE TRADE AGREEMENT NATIONS http://www.energy.gov/downloads/dominion-cove-point-lng-lp-fe-dkt-no-11-128-lng
LNG Exports Update (August 7, 2013): DOE Approves Third US LNG Export Project to Non-FTA Countries
On Wednesday, August 7, 2013, the US Department of Energy (US DOE) announced it had approved the third US LNG export project by granting Lake Charles Exports LLC conditional authorization to ship up to 2 Bcf/d of LNG to countries with which the US does not have a free trade agreement, so-called “non-FTA” countries.
The approval follows just a couple of months after the DOE gave the green light to Freeport’s export project.
The Lake Charles approval was sooner than many had expected but not soon enough for some US policy makers and industry leaders that have been pushing the White House to pick up the pace on approvals, claiming that the “window of opportunity” for US LNG exports was closing. U.S. Sen. Lisa Murkowski, R-Alaska, has been a vocal supporter of energy exports as a way to boost a struggling US economy. Just a day before the Lake Charles approval, Sen. Murkowski, the ranking member of the Senate Energy and Natural Resources Committee, released a white paper outlining her support for exporting LNG to non-FTA countries. Sen. Murkowski’s home state of Alaska currently has the only existing US LNG export facility, the tiny Kenai LNG facility, which came on-line in 1969 to export LNG to Japan. After more than 40 years of exports, Kenai LNG is currently sitting idle while more gas supplies are sought. Somewhat ironically, it has also been suggested that Kenai LNG might need to be converted to an LNG import terminal if gas production in the Kenai area isn’t sufficient to meet local demand.
With the latest approval of Lake Charles, the DOE still has about 20 pending applications to export LNG to non-FTA countries and still has not set out a timeline for additional approvals. For now, DOE has indicated it will review each application on a case-by-case basis while giving preference to companies that are already moving through the pre-filing process at the Federal Energy Regulatory Commission (FERC). The next project in the queue awaiting DOE's approval is Dominion Resources Inc.'s Cove Point, Md., LNG import terminal.
Heeding calls by a group of industrial users of natural gas and manufactures represented by America’s Energy Advantage the DOE indicated that it will continue to take a “measured approach” in reviewing the other pending applications and will continue to assess the cumulative impacts of each succeeding request for export authorization on the public interest with due regard to the effect on domestic natural gas supply and demand fundamentals. In keeping with the performance of its statutory responsibilities, DOE has the authority to attach appropriate and necessary terms and conditions to authorizations. For example, both the Freeport and Lake Charles projects had applied for a 25-year export period but the DOE reduced this to a 20-year term beginning from the date of first exports in part because the LNG Export Study that DOE commissioned to determine the economic benefits of LNG exports contained projections over a 20-year period.
Going forward, the DOE will continue to proceed with caution in approving additional export projects for several valid reasons the DOE has articulated:
(1) the LNG Export Study, like any study based on assumptions and economic projections, is inherently limited in its predictive accuracy;
(2) applications to export significant quantities of domestically produced LNG are a new phenomena with uncertain impacts; and
(3) the market for natural gas has experienced rapid reversals in the past and is again changing rapidly due to economic, technological, and regulatory developments.
In short, the DOE has correctly recognized that “The market of the future very likely will not resemble the market of today.”
LNG Exports Update (May 17, 2013): DOE Approves 2nd LNG Export Project - Freeport LNG
According to a news release issued by Freeport LNG, the Energy Department (DOE) has conditionally authorized Freeport LNG Expansion, L.P. and FLNG Liquefaction, LLC (FLEX) to export domestically produced liquefied natural gas (LNG) to countries that do not have a Free Trade Agreement (FTA) with the United States from the Freeport LNG Terminal on Quintana Island, Texas. Freeport previously received approval to export LNG from this facility to FTA countries on February 10, 2011. Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export at a rate of up to 1.4 billion cubic feet of natural gas a day (Bcf/d) for a period of 20 years. The Department granted the first authorization to export LNG to non-FTA countries in May 2011 for the Sabine Pass LNG Terminal in Cameron Parish, Louisiana at a rate of up to 2.2 Bcf/d.
The DOE's full conditional authorization can be found at http://energy.gov/sites/prod/files/2013/05/f0/ord3282.pdf