Project Finance Blog

DOE Expedites Approval Process for Certain Small-Scale Exports of LNG

August 01, 2018

Posted in Blog article Oil and gas Power

The Department of Energy (DOE) finalized a rule to expedite approvals for small-scale exports of liquefied natural gas (LNG) to countries with which the United States does not have a free-trade agreement (non-FTA countries). 

The DOE has jurisdiction over such exports under Section 3 of the Natural Gas Act and must determine whether the export of natural gas is consistent with the public interest, as well as comply with its obligation under the National Environmental Policy Act (NEPA). Compliance with NEPA often takes the form of preparation of an environmental assessment or environmental impact statement. These reports provide the DOE with an assessment of the potential environmental impacts associated with the grant of the authorization. Often the DOE cooperates in the preparation of these reports with another federal agency like the Federal Energy Regulatory Commission (FERC). FERC is responsible for permitting LNG facilities that are located onshore, or in state waters.

Under the prior rules, an application to export LNG to a non-FTA country triggered requirements including that the DOE publish a notice of application in the Federal Register seeking comments to the application. Unless there were emergency circumstances, there would be at least 30 days for comment. Under the new rules,  small-scale exports – those that up to and including 51.75 billion cubic feet of natural gas per year that are categorically excluded from requiring an environmental assessment or environmental impact statement under the NEPA will be approved upon receipt of a completed application. The DOE believes that this is consistent with the public interest. The DOE's existing regulations provide a list of categorical exclusions that the DOE has already determined do not require the preparation of an environmental assessment or environmental impact statement absent extraordinary circumstances that may affect the significance of the environmental impacts. For example, a categorical exclusion is available where the DOE's approval of an export authorization involves minor operational changes, but not new construction. 

The DOE changed the rule to expedite the approval process for the small-scale natural gas export market to non-FTA countries that don't have the demand to support larger scale imports from conventional LNG tankers. These countries are primarily in the Caribbean, Central, and South America. This change should help foster that growing LNG market segment. 


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