DOE finalizes LNG export national interest review reforms

The US Department of Energy finalized reforms it proposed on May 29 to its process for determining whether planned LNG export projects are in the national interest (OGJ Online, May 29, 2014). The primary change replaced conditional approvals with a requirement for an LNG export project to complete federal environmental reviews first.

LNG export proposals are presumed to be in the national interest under the Natural Gas Act, except to customers in countries that do not have a free-trade agreement with the US. In those cases, DOE has conducted an informal review for more than 30 years, and has issued eight conditional authorizations for LNG exports to non-FTA countries in the last 3 years, according to an Aug. 15 Federal Register notice about the proposed reforms becoming final.

It emphasized that the new procedures won’t affect the validity of conditional authorizations DOE already has issued. “For those applications, DOE stated it would proceed as explained in the orders: by reconsidering the conditional authorization in light of the environmental review once that review is complete and taking appropriate final action,” it said.

DOE received 74 public comments about the proposed reforms, many from project sponsors and oil and gas trade associations. It also made changes in its Addendum to Environmental Review Documents Concerning Exports of Natural Gas from the US in response to several of these comments.

‘Serious reservations’

The Center for Liquefied Natural Gas, which previously urged EPA to scrap the proposed LNG export review reforms (OGJ Online, July 23, 2014), expressed serious reservations about the direction of DOE’s procedural landscape in response to the proposed reforms becoming final.

It said that, given recent rule changes, DOE could improve regulatory certainty by instituting a policy of prompt approval for final non-FTA export permits once the applicants have completed their National Environmental Policy Act reviews. “For projects that meet the requirements under NEPA, DOE should set a timeline as to when it issues the final decisions,” CLNG Pres. Bill Cooper suggested.

“When developers have already faced a lengthy waiting period for a conditional approval and completed the FERC process, continued regulatory uncertainty is not beneficial,” he continued. “Rather, the development of these projects and the economic benefits they will deliver to this country should be expedited.”

US Sen. Mary L. Landrieu (D-La.), who chairs the Energy and Natural Resources Committee, welcomed DOE’s action.

“Responsible exports of [LNG] will create thousands of high-paying jobs in the United States, protect our domestic manufacturing renaissance, and provide critical security to our allies abroad,” she said on Aug. 15. “I am pleased that [DOE] continues to reduce obstacles to approving new LNG export terminals, and I will continue to lead the effort in Congress to harness the potential of this game changing resource.”

Contact Nick Snow at nicks@pennwell.com.

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