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Providing coverage of Alaska and northern Canada's oil and gas industry
June 2014

Vol. 19, No. 23 Week of June 08, 2014

DOE wants LNG export approval change

Proposes no longer making conditional decisions on export licenses prior to completion of permitting and environmental process

Alan Bailey

Petroleum News

The Department of Energy has proposed a change to the way in which it processes applications for the export of liquefied natural gas, or LNG, from the United States. The agency wants to eliminate from its procedure the issuance of conditional license decisions, prior to the completion of the permitting and environmental analysis for the planned LNG export arrangements. Comments on the proposed change are required by July 21.

Approval for the export of LNG requires both a DOE license for the exports and a permit from either the Federal Energy Regulatory Commission or the Department of Transportation Marine Commission for the construction and operation of the required LNG terminal. And, with federal permitting involved, the permit process typically requires the preparation of an environmental impact statement, or EIS, under the terms of the National Environmental Policy Act.

Currently, prior to the completion of the permitting by the other federal agencies and prior to the completion of the EIS, DOE can, at its discretion, issue a conditional order, indicating whether the agency anticipates approving the LNG export. The idea is to give FERC an early indication that DOE would be likely to issue a license, before the expenditure of significant time and money on permitting and environmental analysis. And in this process DOE gives priority to applications that have initiated the required environmental analysis.

But it no longer appears that conditional DOE decisions are needed before FERC and LNG export applicants begin environmental reviews, DOE says. So, the agency says it can improve the efficiency of its procedures by omitting the conditional decision step. Instead, the agency will begin its licensing procedure after the environmental review has been completed, at which point the agency will be in a stronger position to evaluate the export proposal. Applications will be processed in the order with which the environmental work is completed, rather than in the order in which the work is started.

The procedures in question only apply to the export of LNG to non-free-trade countries - the export of LNG is usually granted automatically to countries that have a free-trade agreement with the United States.






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